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Activist investor Nelson Peltz<\/a> published 133 pages<\/a> worth of ideas on how to improve Disney<\/a>, but it might take a little luck to convince shareholders at the company\u2019s annual meeting next month that he and an ally should be added to the board.<\/p>\n Peltz\u2019s Trian Fund Management LP is one of two activist investors seeking seats on Disney\u2019s board, but with a $3 billion stake under Trian\u2019s control and a louder voice, Peltz has been a thorn in Disney\u2019s side for months as he wages his latest<\/a> proxy battle against the company. The other activist hedge fund vying for board representation<\/a> at Disney is Blackwells Capital, which owns about $5 million in stock.\u00a0<\/p>\n In an extensive memo published Monday, Peltz\u2019s hedge fund took a shot at CEO Bob Iger and his board appointees and laid out a plan Trian has been calling\u00a0 \u201cRestore The Magic<\/a>,\u201d which included cutting down on sequels and reclaiming the lead on animated films.\u00a0<\/p>\n Disney did not immediately respond to Fortune<\/em>\u2019s request for comment.<\/p>\n Peltz accused Iger, who was feted by shareholders when he returned<\/a> to the top job in November 2022, of not being motivated to improve the company\u2019s share performance because he owned only about $20 million worth of Disney shares, compared to the billions in Disney stock Trian controls<\/a>. Disney pointed out in a rebuttal<\/a> to Peltz\u2019s previous attacks that he made $150 million selling about one-third of his Disney shares in early 2023.<\/p>\n Disney, for its part, has said Peltz does not have the proper experience<\/a> to serve on Disney\u2019s board because he has not worked in the media or technology industries. The company has recommended that investors reelect Disney\u2019s board nominees, which include new directors James Gorman, executive chairman of Morgan Stanely, and Jeremy Darroch, former CEO of UK media company Sky.\u00a0<\/p>\n The activist investor also accused Iger of appointing many of his friends and close contacts to the board. The board isn\u2019t fully focused on the company, the memo claims, because several members serve as CEOs or directors at other companies including chairman Mark Parker<\/a>, who also serves as executive chairman of Nike<\/a>.<\/p>\n As for the direction of the company, Peltz and Trian claimed that Disney needs to regain the lead that it has recently ceded to Universal<\/a> in animated films, the memo stated. Universal animated movies such as \u201cMinions: The Rise of Gru\u201d and \u201cThe Super Mario Bros. Movie\u201d broke records last year while Disney failed to compete, Peltz\u2019s memo claimed.<\/p>\n \u201cWhile Disney has blamed the pandemic for poor film quality and results, its competitors managed to release some of the most successful animated films of all-time within the last year,\u201d read the memo.<\/p>\n Instead of seeking out new intellectual property to build on, Disney has focused too much on sequels and spinoffs, which \u201csuggest a creative engine that is sputtering.\u201d\u00a0<\/p>\n \u201cSequels are less risky film ventures to produce, but do not drive long-term benefits in the same way that new IP can,\u201d the memo reads.<\/p>\n Trian and Peltz added that the board should lead a review of studio operations and culture to rectify what they see as a \u201cspend what you need\u201d mindset at Disney that often leads to budget overruns and a lack of financial discipline.<\/p>\n Still, despite Peltz\u2019s long list of proposals and insistence that he can right the ship at Disney, he faces an uphill battle to get on the board, especially given the company\u2019s most recent earnings last month.<\/p>\n The company beat analyst expectations<\/a> on earnings per share and said full-year earnings per share would exceed last year\u2019s results by 20%. It also announced a $3 billion stock buyback<\/a> and a 50% dividend increase to try to woo investors ahead of next month\u2019s shareholders meeting.<\/p>\n Iger and Disney\u2019s current board also have strong backers in the family members and heirs of company founders Walt and Roy Disney. Last week, the Disney descendants, including Iger critic Abigail Disney, published two separate letters <\/a>opposing the nominations by Peltz and the other activist firm, Blackwells.\u00a0\u00a0<\/p>\n \u201cDisney stories are filled with heroes and villains. We know who the villains are in this story, and we know they cannot be entrusted with protecting this company\u2019s rich legacy or guiding its bright future,\u201d one of the letters read.<\/p>\n<\/div>\n\nPeltz\u2019s big ideas<\/h2>\n
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