Activist investor Nelson Peltz.
David A. Grogan | CNBC
Disney and his investors will start hearing a lot from activist investor Nelson Peltz.
In the coming weeks, Peltz’s Trian Fund Management plans to post on X, formerly known as Twitter, and add content to its website RestoreTheMagic.com as a crescendo to the release of a dense white paper explaining its case for adding Peltz and former CFO of Disney. Jay Rasulo to Disney board. That paper will be out in a few weeks, Peltz said in an interview with CNBC after appearing on “Squawk on the Street” earlier Thursday.
In February, Trian plans to meet with attorneys Glass Lewis and ISS, after which it will begin lobbying shareholders through March and Disney’s scheduled annual shareholder meeting. Trian expects the rally to take place in April. Disney’s annual meeting last year was on April 3rd.
Trian filed a preliminary proxy statement Thursday that outlined some of the reasons Peltz believes Disney shareholders should elect him and Rasulo to the board as they push to boost its stock performance. These include Disney’s streaming margins at 15% to 20% through 2027. Disney’s streaming business is currently losing money and won’t take off until later this year, CEO Bob Iger said.
Trian wants Disney to be more transparent with its business. Disney plans to launch a direct-to-consumer ESPN service either later this year or in 2025 as the sports network’s traditional cable subscription model fades. Before it debuts, Trian wants specific short-term profitability goals to ensure it’s a viable business.
“What they really need is accountability,” Peltz said.
After reporting earnings on Feb. 7, Disney will release the final proxy materials, which include the date of the annual meeting.
Typically, both Trian and Disney will then present their arguments to proxy advisors Glass Lewis and ISS, followed by a shareholder solicitation and recommendations from the companies. This advice is critical because it can affect large investors and index funds. Neither side usually knows who wins until days or hours before the annual meeting, because these huge investors often vote late in the process.
The dynamic duo
Trian has targeted Disney’s board for being too closely associated with Iger, who has had his contract renewed five times to delay his retirement. Iger said he plans to leave Disney in 2026 and has been actively searching for a successor since returning to Disney in late 2022.
Peltz has served on several boards, including; Proctor & Gamble and Mondelez, who have appointed new managing directors. Peltz said his success in finding top executives is part of why he should join Disney’s board.
“I do a lot of executive searches,” Peltz said. “I’m like a bounty hunter.”
While Peltz outlined why he believes Disney’s stock performance can improve with him on the board, he’s still just one person. Even if Rasulo is elected, they will still be just two voices on a Disney board that Peltz criticized as being in Iger’s pocket.
But Peltz said boards sometimes just need to start with people who aren’t afraid to question longtime CEOs like Iger.
“We’re going to be Batman and Robin,” Peltz said. “Boards can turn quickly if they start hearing some good points.”
WATCH: CNBC’s full interview with Trian Partners founding partner Nelson Peltz
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