Peltz’s Push for Disney Board Seats Boosted by Perlmutter’s Shares
Former Marvel Entertainment executive Ike Perlmutter says he can ‘no longer watch the business underachieve its great potential’
Billionaire and former Marvel executive Isaac “Ike” Perlmutter offered moral and logistical support to his friend Nelson Peltz last year when the activist investor campaigned for big changes at Disney DIS -0.56%decrease; red down pointing triangle.
As Peltz prepares a fresh challenge to the company, Perlmutter is proving to be a key financial ally, too.
Perlmutter said he has entrusted his stake in Disney to Peltz’s Trian Fund Management as it prepares to press the company for multiple board seats. Trian’s holding in the company totals about 33 million shares, including stock that the investment firm controls under an arrangement that gives Peltz’s firm sole voting power over Perlmutter’s shares, according to people familiar with the matter.
Trian’s Disney stake, a holding that The Wall Street Journal previously reported is worth upward of $2.5 billion, includes shares held by Trian funds and outside investors. Perlmutter’s shares represent the majority of the stock that Trian currently controls.
Aided by Perlmutter’s shares, Peltz’s Trian now has nearly four times as many shares to vote than the investment firm had during the first campaign, which means more muscle to press Disney CEO Bob Iger for board seats or other changes. The specter of Peltz’s renewed campaign represents one of several challenges Iger faces as Disney shares trade at their lowest level in nearly a decade.
Disney declined to comment.
Perlmutter became one of Disney’s largest independent shareholders when he sold Marvel to the entertainment giant for $4 billion in 2009. Perlmutter told the Journal he plans to urge Disney’s board to accept one or more of Trian’s board nominees, including Peltz.
Peltz hasn’t officially launched a fresh proxy battle against Disney—the nominating window for Disney’s board of directors opens in December—but he could do so if the board resists adding him as a director. Peltz is expected to seek multiple board seats, up from one last year, the Journal reported.
Trian isn’t seeking to add Perlmutter, who was chairman of Marvel Entertainment until March, to Disney’s board, nor is the firm asking Disney to rehire him, the people said.
“While I was a Disney employee, I was not comfortable publicly stating my views on the company and its performance,” Perlmutter said in a statement. “As someone with a large economic interest in Disney’s success, I can no longer watch the business underachieve its great potential.”
Peltz and Perlmutter are neighbors in Palm Beach, Fla., and frequently dine together with their wives.
Perlmutter said he plans to urge Disney’s board to “immediately welcome one or more Trian board candidates” and believes Peltz and Trian could help Disney improve its operations and strategy and achieve better results for shareholders.
Perlmutter said he has purchased but hasn’t sold Disney stock since the 2009 Marvel acquisition.
Perlmutter aims to donate family wealth to further medical research and hospital care, and an increase in the value of his Disney holdings will allow him to do more of this, he said. He and his wife Laurie have been active donors to medical charities and healthcare institutions including New York University’s Langone Medical Center.
Disney’s board members, excluding Iger, collectively own under $15 million worth of stock in the company, according to FactSet. Iger owns around $15 million in shares and has sold much of the stock he has received over the past two decades.
During Peltz’s initial campaign, Trian accumulated around nine million Disney shares and nominated Peltz to the board in a proxy campaign. Peltz called in proxy materials for Disney to cut spending, including executive pay, and criticized directors who he said had backed unwise strategic decisions and botched succession planning at the company.
Perlmutter assisted with the campaign by calling Disney directors and brokering meetings between Peltz and then-CEO Bob Chapek. Peltz called off his earlier campaign in February after Iger, who returned to the CEO job in November to replace Chapek, announced $5.5 billion in budget cuts and a head count reduction of 7,000 positions.
Trian hoped that with time, Disney’s cuts and other restructuring moves as well as new initiatives would result in improved operating performance. So far, changes at the company haven’t boosted Disney’s share price, which has languished below $100 per share for much of the year. On Friday, it closed at $79.33.
Perlmutter and Iger have long had an acrimonious relationship. Perlmutter, who made his fortune doing turnarounds of bankrupt and distressed retailers, believes that profligacy can kill a company if left unchecked. He pestered studio executives at Disney for years to spend less on Marvel Studios superhero movies, even offering script notes about how to save money on props and reduce runtime.
In 2015, after a dispute over budgets and movie slates between Marvel Studios chief Kevin Feige and the studio’s creative committee, which was led by Perlmutter and his allies, Iger sided with Feige and removed Perlmutter from his position overseeing the studio.
Perlmutter was terminated from his job running Marvel’s comic-book publishing and licensing businesses in March, a move Disney said at the time was part of the cost-cutting efforts. Perlmutter told the Journal in an interview that he was fired.
“I have no doubt that my termination was based on fundamental differences in business between my thinking and Disney leadership, because I care about return on investment,” Perlmutter said at the time. Both Iger and Perlmutter have acknowledged in recent interviews that their relationship is strained.