Activist investor billionaire Nelson Peltz declared his proxy fight with Disney over on Thursday morning after the entertainment giant revealed it would cut billions of dollars in costs along with 7,000 jobs.
Accompanying Peltz’s announcement was a statement from current CEO Bob Iger, 71, that he will step down in two years.
Thursday morning, Peltz, 80, told CNBC’s ‘Squawk on the Street’ that ‘Disney plans to do everything we wanted them to do,’ calling the ending of his activist battle a ‘great win.’
‘We wish the very best to Bob [Iger], this management team and the board. We will be watching. We will be rooting,’ said Peltz, who runs Trian Fund Management.
Iger’s news was also delivered via CNBC. He told the outlet his plan is ‘to stay here for two years, that’s what my contract says, that was my agreement with the board, and that is my preference.’
Nelson Peltz (left) with daughter Nicola Peltz (right). Peltz ended his proxy bid against Disney on Thursday after the company agreed to billions of dollars in cost cutting measures
Last month, Trian launched a proxy fight with Disney, pushing for Peltz to gain a seat on the company’s board of directors.
At the time, the firm said it owned about 9.4million shares valued at about $900million, which it accumulated several months prior.
Peltz had previously taken a critical stance against Disney’s $71billion acquisition of Fox in 2019, as well as its failed succession planning that resulted in the ousting of Bob Chapek and second reign of Iger.
During the remainder of Iger’s tenure, he will be responsible for crafting a more solid succession plan than the one which left Chapek in place only to oversee a period of turbulence for the company.
‘We thought we made the right decision when we chose Bob [Chapek] in 2020. The board decided in November he wasn’t the right person for the job and made a change,’ Iger said, declining to comment further.
He did add that a major focus of the company at the moment is profitability for the company’s streaming division – one aspect of what Peltz’s campaign was based upon.
The 7,000 aforementioned job cuts are designed to save the company as much as $5.5 billion.
‘We’re still losing money on streaming,’ Iger said Thursday. ‘We need to turn that around.’ He is hoping for profitability by 2024.
The company’s recent streaming service price hike likely led to the loss of about 2.4 million Disney+ customers.
Iger also said the company will focus on leaning into fan-favorite franchises that have been massive commercial successes, like Frozen and Toy Story, for which sequels are in the pipeline.
Iger returned to the helm of Disney in November after a brief departure
Trian Fund Management founder Nelson Peltz said Thursday he is done with his fight to gain a seat on Disney’s board of directors
Chapek (left) was ousted after nearly a year of running Disney into crisis after crisis
Investors have largely been pleased to see Iger return to the House of Mouse following a short-lived retirement from his role as CEO. Company stock is up more than 20% since his November return.
Iger was critical of Peltz’s play on Thursday, saying that the investor worth roughly $1.4billion ‘has not articulated either a vision, or even ideas, that are of particular value to us.’
Peltz waged a ‘Restore the Magic’ campaign for a seat on the board after claiming that the company has wasted funds in the last several years battling a super woke reputation that is unappealing to families, in the process costing shareholders $120billion.
‘For a company with so many advantages – unparalleled consumer loyalty and access, valuable intellectual property, renowned brands, an enviable library of content and a talented and engaged workforce – it is disappointing and simply unacceptable that shareholders have suffered so much,’ Peltz said via letter to Disney shareholders last week.
Peltz has explained that is generally turned off by virtue-signaling and culture-shaping efforts from companies and that he’s more interested in operations and cash.
Disney notably took part in a scuffle with pop GOP figure Governor Ron DeSantis of Florida when it backed those opposing the governor’s ‘Parental Rights in Education’ law, which was dubbed the ‘don’t say gay’ bill by critics.
The result of the disturbance was DeSantis dramatically reducing the company’s self-governing abilities in Reedy Creek, where Disney has, for half a century, maintained a series of special benefits.
Earlier this week DeSantis bragged of his win against the massive entertainment conglomerate, saying there’s a ‘new sheriff in town’ at the formerly self-governed Reedy Creek.
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