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Investor Peltz ends proxy battle with Disney amid planned layoffs
The Industry Feb 09, 2023
The original entrance gate to The Walt Disney Studios in Burbank. | Photo courtesy of Junkyardsparkle/Wikimedia Commons (CC0 1.0)
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One day after The Walt Disney Co. announced plans for 7,000 layoffs and $5.5 billion in cost cuts, billionaire investor Nelson Peltz said Thursday he was ending his proxy battle seeking to gain a seat on the entertainment giant’s board of directors.
Appearing on CNBC, Peltz said Wednesday’s cost-cutting announcement by Disney CEO Bob Iger means the company “plans to do everything we wanted them to do.” He said he wished Iger well, adding, “We will be watching. We will be rooting.”
Peltz’s Trian Fund Management investment company is a major Disney shareholder. He began pushing for a seat on the company’s board of directors, and after being rebuffed, he began lobbying other Disney shareholders to support a spot for him on the board.
But Peltz said Thursday that fight “is over.”
The Disney Board of Directors issued a statement Thursday morning in response to Peltz’s announcement, saying, “We respect and value the input of all our shareholders and appreciate the decision by Tiran Fund announced by Nelson Peltz this morning.”
“This is a moment of great opportunity for The Walt Disney Company, as we recommit to our historic 100-year legacy of unrivaled creativity and a future of sustained growth and profitability,” according to the board. “We are pleased that our Board and management can remain focused without the distraction of a proxy contest, and we have tremendous faith in Bob Iger’s leadership and the transformative vision for Disney’s future he set forth yesterday.”
Iger announced Wednesday that the Burbank-based company will slash 7,000 jobs as part of a $5.5 billion cost-cutting move.
“To help achieve this we will be reducing our workforce by approximately 7,000 jobs,” he said during an earnings call. “While this is necessary to address the challenges we are facing today, I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees worldwide and (am) mindful of the personal impact of these changes.”
No details were immediately released on where the layoffs would be made, or how quickly.
Iger also said the company’s organizational structure was being changed, with the company being divided into a trio of divisions — Disney Entertainment; ESPN; and Parks, Experiences and Products.
Iger said the restructuring will return “greater authority to our creative leaders” while also making them “accountable for how their content performs financially.”
“Our former structure severed that link and must be restored,” he said. “Moving forward, our creative teams will determine what content we’re making, how it is distributed and monetized and how it gets marketed.”
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