Trian Sends Letter to Fellow Disney Shareholders Outlining the Need for Change
$DIS
Dear Fellow Walt Disney Company Shareholder:
Disney’s 2024 Annual Meeting will be held on April 3, and it is time for you to vote to help Restore the Magic at Disney.
For more than a century, Disney has captivated millions of people all over the world with unforgettable films and experiences. Like you, Trian loves Disney and wants to see the Company succeed. With its iconic franchises, global presence and scale, unparalleled customer loyalty and enviable commercial flywheel, Disney and its shareholders should prosper.
But despite its many advantages, Disney has lost its way. Disney fell from its #1 position at the box office,2 was late to enter the streaming business3 and doubled down on linear TV at the wrong time.4 As a result, financial performance has deteriorated, with earnings per share, free cash flow, operating income and many other key metrics lower than they were five years ago.5
Consequently, shareholders have suffered. Disney’s stock has underperformed its media peers and the broader market over most relevant periods: over the past one, two, three, four and five years.6
Change Is Needed
To help ensure a better future for this great company, we believe Disney needs new independent directors who have a shareholder mindset, deep and relevant experience and a sense of urgency.
We have nominated two such candidates: Nelson Peltz and Jay Rasulo, each of whom have invested their own money in Disney stock and are dedicated to helping Disney. Nelson was a public company CEO and has served on the boards of many public companies facing performance, governance and CEO succession challenges, just like Disney. Jay is the former Chief Financial Officer of Disney and ran the Company’s parks and resorts business before that.
Nelson and Jay pledge to work together with the other members of the Board and Disney’s leadership team to enhance corporate governance and accountability, accelerate media profitability, review Disney’s creative engine and clarify the Company’s strategic focus. We believe Nelson and Jay will be a catalyst for much needed positive change.
We are seeking to replace two long-serving Disney directors whose backgrounds and skills are not, in our view, relevant to Disney’s current challenges or likely to assist in its turnaround: Michael B.G. Froman and Maria Elena Lagomasino. Mr. Froman is President of the Council on Foreign Relations (where another Disney director is on the board) and Ms. Lagomasino helps organize the affairs of wealthy families. Whatever their strengths and skills in foreign affairs and wealth management, the cold truth is that neither of them has helped Disney retain its leadership position in the media landscape; neither of them has aligned executive pay with performance;7 and neither of them has facilitated an orderly CEO transition.8 Instead, under their watch, Disney has fallen – its fundamental financial performance is worse,9 and its stock has underperformed.10
Disney can do better. But it needs some fresh thinking.
We Have Helped Drive Change
At Trian, we have recommended and nominated directors at more than two dozen companies over the course of our history. Nelson Peltz has served on 11 public company boards himself and is one of the most experienced corporate directors in America. Time and again, Nelson and our other candidates have proven to be productive and collaborative directors; they have overseen major business transformations11 and successful leadership transitions12 and have helped drive growth13 and create value14 for all shareholders.
The simple fact is that Trian suggests candidates for boards in an effort to help, and our candidates focus their energy entirely on trying to create value for shareholders. Our fresh perspective and shareholder mindset, coupled with a genuine dedication to collegiality and collaboration, and long-term focus are a powerful combination. Great companies that have lost their way – like Disney – often thrive after new directors, nominated by Trian, are appointed.15
Just ask the companies themselves: executives at Mondelēz, Sysco and Wendy’s, for example, have praised our directors for working constructively in the boardroom.16 Even CEOs of companies that initially opposed the appointment of Mr. Peltz – Heinz, DuPont and Procter & Gamble – later commended him as constructive and collaborative.17
Accepting Change is Hard
Admittedly, our relationships with companies, and with other directors, do not always start with such positive feelings. Sometimes to deflect from performance issues, corporate boards attempt to sow uncertainty about Trian and our candidates, warning that we will be “disruptive” or that our candidates will “not add value.”18
Disney has taken this approach to an extreme. Disney’s Board has claimed that the election of Nelson and Jay threatens to “impede,”19 “disrupt”20 and “derail”21 the Company’s supposed progress. They have disingenuously touted “endorsements” from “experts”22 who are, in fact, just service providers or advisors to Disney that have been highly compensated by the Company. Disney has used inflammatory rhetoric, claiming that our candidates (one of whom is Disney’s own former CFO) are “oblivious”23 and that our ideas are “inane.”24
We have been here before.
We know that companies sometimes fear and resist change. But we also know that turnarounds are not easy and often require objective thinking and new ideas.
To Disney’s incumbent directors, we say this: we are not here to upset, interrupt or reverse Disney’s progress, or frustrate the Board or leadership team. We love Disney; we are a large investor and we come with the sole purpose of helping the Company get back to delighting consumers and delivering strong returns for shareholders. We look forward to the opportunity to do so together, with you, from inside the boardroom.
Vote for Change
Nelson Peltz and Jay Rasulo have dedicated themselves to helping build a better future for this iconic company. Like you, we want Disney to improve the guest experience at its parks and on its cruises; create unforgettable, industry-leading films and television content; and deliver sustainable growth and value for shareholders for generations to come.
We are confident that, given its many advantages, Disney can do better. But we need your help.
Together, we can elect two new independent directors who will bring focus, alignment and accountability to the Company’s boardroom. Together, we can Restore the Magic at Disney.
To ensure the election of Nelson Peltz and Jay Rasulo, it is essential that shareholders vote FOR Nelson Peltz and Jay Rasulo and WITHHOLD on Michael B.G. Froman, Maria Elena Lagomasino and all three Blackwells Nominees. Please use the enclosed BLUE proxy card.
P.S. If you voted already, it is not too late to switch your vote and support Trian’s Nominees, Nelson Peltz and Jay Rasulo. Your last vote is the one that counts.
For more information, please visit www.RestoreTheMagic.com.
Source:
https://www.sec.gov/Archives/edgar/data/1345471/000090266424002482/p24-1231dfan14a.htm