The Walt Disney Co. shareholders voted to back CEO Bob Iger and its current directors by a substantial margin, the company said during its annual meeting Wednesday.

Shareholders rejected nominees backed by Nelson Peltz’s Trian Fund Management and Blackwells Capital.

Final vote totals will be released by the company in the coming days.

Re-elected as directors were: Mary T. Barra, Safra A. Catz, Amy L. Chang, D. Jeremy Darroch, Carolyn N. Everson, Michael B.G. Froman, James P. Gorman, Robert A. Iger, Maria Elena Lagomasino, Calvin R. McDonald, Mark G. Parker and Derica W. Rice.

Management proposals about executive pay and accounting were passed, while shareholder proposals were defeated.

“I want to thank our shareholders for their trust and confidence in our Board and management,“ Iger said. “With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers.”

Added Disney chairman of the board Mark Parker: “We are immensely grateful to our shareholders for their investment in Disney and their belief in its future, particularly during this period of great change in the broader entertainment industry. We are fortunate to have a highly qualified Board of Directors who possess a profound commitment to the enduring strength of this company and an enormous amount of experience and expertise, including succession planning. I’m thankful for Bob and his exceptional management team, as well as Disney’s employees and Cast Members around the world, for continuing to deliver for consumers and shareholders throughout this distracting proxy battle.” 

Before the vote, Nelson Peltz spoke at the meeting, noting that Trian and its affiliates have more than $3.5 billion invested in Disney.

“We invest in great companies that for one reason or another have stumbled. We seek to collaborate with management to make them better,” Peltz said. “We want Disney to get back to creating great content, delighting consumers and creating value for shareholders.”

Peltz acknowledged that Disney and Iger had taken steps to reduce streaming losses, rationalize its content production and started several initiatives at ESPN.

Long-term, Peltz noted that Disney stock is still down from its high at about $200 a share and pointed out that since Trian started its campaign, the stock has increased 50% and has been the best performer among the Dow-listed stocks year to date.

 Iger addressed some of the company’s issues during a question and answer session at the meeting.

Iger insisted that he has “never been more confident” that streaming would  become “a key earnings growth driver for the company.” He said he expects to add subscribers and that streaming would achieve double-digit operating margins.

With Disney Plus, Hulu and the streaming version of ESPN coming in 2025, “Disney has a chance to become the ultimate streaming destination for consumers,” He said.

At the parks, Iger said that the company has numerous projects in development, and that details would be shared when there’s something tangible to discuss.

Asked about Disney’s involvement in politics and social advocacy, Iger said “our job is to entertain.” He added that by telling great stories, Disney is a source of joy, hope and optimism . . . I always believe we have a responsibility to do good in the world, not to advance any agenda.”

Iger said that he was bullish on women’s sports after Caitlin Clark helped draw record ratings for a women’s basketball game. “ESPN is pleased to be a part of that,” he said.

And asked if Disney Plus would be streaming more Taylor Swift concerts, Iger said “we’re thrilled we were able to reach an agreement with Taylor and her team to put the film of her most recent concert on Disney Plus. We’d like nothing more than to continue our great relationship with her.”

The fight for board seats has been called one of the most expensive proxy fights in corporate history.

Peltz, an activist investor, originally criticized Disney for its stock price, which had lost $70 billion in value between February and December of last year. Peltz joined up with Isaac Perlmutter, who was fired by Disney and owns 25 million Disney shares. (Disney has knocked Perlmutter for having a “personal agenda” against Iger.)

Trian has also complained about Disney’s streaming losses, the performance of its movie slate and its plans to spend $60 billion on its parks.

Peltz campaigned to get a seat on Disney’s board for himself and for Jay Rasulo, a former Disney CFO.

When Iger returned to Disney as CEO in November 2022, replacing Bob Chapek, he moved quickly with a plan to cut costs by $7.5 billion that included reducing the company’s headcount by about 5,000.

To make shareholders happy, Disney has also started paying a dividend on its stock.

In addition to Trian, another investment company, Blackwells Capital, put forward candidates for Disney’s board. Blackwells has been generally supportive of Iger, but nonetheless nominated former Warner Bros. and NBCUniversal executive Jessica Schell, Tribeca Film Festival co-founders Craig Hatkoff and TaskRabbit founder Leah Solivan as directors.

Last month, Iger called the proxy battle a distraction to the company as it tried to navigate a new media landscape.

“We’re at this hard every day, and when you go from fixing [the company], which was significant and heavy lifting, to really creating meaningful growth for our shareholders, the only way to achieve that is by focus and this campaign is in a way to distract us, to take our eye off all those balls,” Iger said, speaking at the Morgan Stanley Technology Media and Telecom Conference.

“Focus is necessary to generate what we need to generate for the shareholders,“ he said. “It’s that simple. And I am working really hard to not let this distract me because when I get distracted, everybody who works for me is distracted, and that’s not a good thing.”

Nelson Peltz and his Trian Fund have publicly claimed to support Bob Iger's ascension to the Disney board of directors. The logic: Such a move would, in their stated opinion, facilitate a transition away from Iger as CEO of the company.

On Monday, Pelz and Trian -- which control $3.5 billion of Disney stock -- reiterated that position: “Trian supports Mr. Iger as a candidate for the Board and as CEO," the activist shareholder said in a new statement. 

Disney shareholders are set to vote on board seats on April 3. Peltz and Trian are trying to claim two seats on the board

Despite its proclamation of support for Iger, however, Peltz and the hedge fund withheld their votes for Iger's board candidacy.

The reasons aren't precisely clear. 

According to Trian’s press release, its most important grievance against the current board was the failure of “its most important job — CEO succession."

Peltz and Trian say their beef is with the Disney board, not Iger. 

“In this election contest, Disney has emphasized that Mr. Iger is admired and respected (including, for example, by service providers and advisors), which we do not doubt,” Trian's statement reads. “Trian supports Mr. Iger as a candidate for the board and as CEO. That Disney spends so much time and ink defending Mr. Iger — while saying almost nothing about the two director candidates whose reelection Trian is challenging — is both troubling and telling. This campaign is not about Mr. Iger, nor is it a referendum on his leadership. And in all events, Disney is, and must be, more than just one person, especially one whose contract expires in less than two short years.”

Certainly, it's been a busy last few days for Peltz, who questioned the leadership of Iger and Marvel chief Kevin Feige in an interview with the Financial Times, claimed that he does not want to replace the CEO. Peltz also criticized Disney and Marvel for their alleged "woke" film strategy.

Earlier this month, Disney fired back at Peltz's running criticism, with an investor presentation titled “Correcting Trian’s Fact With Fiction,” and which prominently included a picture of Pinocchio with a growing nose.

Trian owns just about 1.5% of Disney’s outstanding shares, when combined with the ownership of ally Ike Perlmutter, the former Marvel Entertainment Chairman  who has taken Peltz's side in his proxy fight against the Disney board.

Disney has nominated a slate of 12 for its board of directors, including Iger. 

With the Walt Disney Co. facing a proxy fight on two fronts against activist hedge funds trying to seed the company’s board of directors with their own candidates, Business Insider reported that an unknown investor is offering to buy votes at the company’s April shareholder meeting at a rate of $100,000 per 500,000 votes under a controversial “Shareholder Vote Exchange.”

Five hundred thousand votes works out to roughly $55 million in shareholder equity, and, yes it is perfectly legal.

Morning Brew pointed out that the buyer could be Blackwells Capital or Nelson Peltz’s Trian Fund Management, both of which are fighting for more control of the Magical Kingdom, or it could be a group backing CEO Bob Iger’s vision to restore Disney to its former glory.

The publication also noted that as of Wednesday there over 20,000 Disney shareholder votes had been offered for sale and that the company has a large percentage of smaller shareholders who may be less involved or even aware of the high-end drama going on.

The company was battered by a disastrous series of missteps from Iger’s predecessor (and one-time successor) Bob Chapek, who was unceremoniously ousted from the CEO’s office after just 18 months on job.

Earlier this week, Nelson Peltz’s Trian Fund Management released a 130-page manifesto trashing Bob Iger’s current strategy and outlining what they would do differently if their candidates are elected.

Iger responded that he and his senior managers were trying to stay focused on making the complex company more profitable amid such distractions.

Activist investor Nelson Peltz has made good on his latest proxy-war threat against Disney. 

On Thursday, the 81-year-old former frozen-food company magnate, who controls around $3 billion worth of Disney shares through his Trian Fund Management, along with his alliance with ousted Marvel Entertainment chair Ike Perlmutter, asked Disney shareholders for his nomination to the company's board of directors. 

Peltz also asked for the nomination of former Disney CFO Jay Rasulo.

In a proxy filing headlined "Restore the Magic," Trian seeks to "align management pay with performance," specifically noting CEO Bob Iger's $31.6 million annual compensation package. 

Trian also promises to help Disney "finally complete a successful CEO succession" ... again noting Iger. Additionally, Peltz' firm asked Disney shareholders to reject three nomination bids made by another activist firm, Blackwell.

Peltz made a similar nomination request a year ago, but he dropped it after newly reinstalled CEO Iger announced his intentions to dismantle displaced chief executive Bob Chapek's reorganization plan, as well as conduct layoffs and streamline operations. 

With Disney stock down over 17% since that time, Peltz told CNBC's Squawk Box Thursday he was intent on making another "run" at the company. 

"I made a run at them last year," he said. "They promised they were going to improve things. I took them at their word. Things got worse. The stock went down."

Asked why he's targeting Disney amid streaming disruption to the broader media-entertainment sector, Peltz noted the company's 6% margins vs. 20% margins for competitors Netflix and Warner Bros. Discovery. 

"Bob [Iger] said in ’15 and ’16 that streaming was a big issue. It was coming. Then what happened? They did nothing," Peltz told Squawk Box. "And look what happened to ESPN, the crown jewel of Disney, it continued to lose subscribers, lose value, and now they’re negotiating deals for ESPN out of total weakness. They could have made deals for ESPN back in ’15, ’16, ’17,, ’18, when they saw this streaming thing coming. They said it directly."

The Walt Disney Co. said it made a deal with ValueAct Capital Management as it fights off a proxy fight led by activist investor Trian Fund Management and former Disney executive Isaac Perlmutter.

ValueAct, a San Francisco-based investment fund, had been reportedly building a stake in Disney of undisclosed size. Trian and Perlmutter, the former chair of Marvel Entertainment, own 44 million Disney shares. 

ValueAct has agreed to support Disney CEO Bob Iger and the Disney board’s recommended slate of directors at the company’s 2024 meeting.

Disney also signed a confidentiality agreement with ValueAct, enabling ValueAct to receive information about Disney, have meeting with directors and executives and consult on strategic matters.

ValueAct previously invested in Spotify, The New York Times, 21st Century Fox, Nintendo, Microsoft, Adobe and Salesforce.

Disney’s stock price has plunged as cord cutting has eaten into the linear TV businesses and the cost of competing in streaming has created barrels of red ink.

Under pressure from shareholders, Disney has cut $7.5 million in costs and reduced headcount by about 5,000. 

Trian, seeking two seats on Disney’s board, complained the company’s shares have lost $70 billion in value since February, further cost-cutting is needed and the board needs executives with more media experience.

Disney has alleged that Perlmutter, whose employment at Marvel Entertainment was terminated by Disney earlier this year, has a “longstanding personal agenda” against Iger.

Another hedge fund, Blackwells Capital, plans to nominate three directors for Disney’s board.

“ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in, and its co-CEO, Mason Morfit, has been very constructive in the conversations we’ve had over the past year,“ Iger said. “We welcome their input as long-term shareholders.”

Last year, Iger indicated that Disney’s linear businesses, including ABC, its entertainment cable networks and its TV stations, might not be core assets, setting up the possibility of a sale. Iger later walked that back, indicating that those assets might still have value to the company.

Disney is also in the process of creating a standalone, direct-to-consumer version of ESPN and combining Disney Plus and Hulu into a streaming business that can compete with Netflix.

“Disney is the world’s leading entertainment company. It has the best intellectual property, sports brand and parks & experiences assets in the industry,” said Morfit, who is chief investment officer for ValueAct as well as co-CEO. “As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward. We could not be more excited to partner with Bob and the board to help create long-term sustainable shareholder value.”

Blackwells said its board nominees are: Jessica Schell, a former Warner Bros. Discovery and NBCUniversal executive; Craig Hatkoff, a real estate investor and co-founder of the Tribeca Film Festival, and Leah Solivan, a venture capitalist and technology investor who founded TaskRabbit and sold it to Ikea.

“Blackwells’s highly qualified candidates have the necessary backgrounds and expertise to support Mr. Iger’s efforts constructively and complement the board,” Blackwells said. “The Trian nominees, and the reductive nature of its campaign do not provide shareholders those benefits.”

Blackwells also criticized Trian for flip-flopping, self-interest and personal quarrels that have no place in a boardroom. 

“We call on Mr. Peltz to end his peacocking so that Disney can focus on its bright future, and not be dragged backward in time," Blackwells chief investment officer Jason Aintabi said. 

"Disney’s current leadership is invaluable to its shareholders, and our three exceptional candidates are being nominated along with a business proposal specifying that any incumbent director outvoted by Blackwells’ nominees be immediately added back to the Board following the 2024 Annual Meeting,” Aintabi said. "This campaign provides shareholders a necessary alternative to what would otherwise be a solipsistic sideshow.”

Disney said its board governance and nominating committees will review the proposed Blackwells nominees and provide a recommendation to the board as part of its governance process.

“Disney has an experienced, diverse, and highly qualified Board that is focused on the long-term performance of the company, strategic growth initiatives including the ongoing transformation of its businesses, the succession planning process and increasing shareholder value,” the company said in a statement.

The Walt Disney Co. said Nelson Peltz’s Trian Fund Management has formally provided notice of its intent to nominate two people to be Disney directors at the media company’s 2024 shareholder meeting.

Trian, working with former Disney executive Isaac Perlmutter, controls 44 million Disney shares, including Perlmutter’s 25 million shares.

Disney has alleged that Perlmutter, whose employment as chair of Marvel Entertainment was terminated by Disney earlier this year, has a “longstanding personal agenda” against Disney CEO Bob Iger.

Trian has complained that Disney’s shares have lost $70 billion in value since February, that further cost-cutting is needed and that Disney’s board needs more executives with media experience.

Under pressure from shareholders, Disney has cut $7.5 million in costs and reduced headcount by about 5,000. Disney stock is up about 6% today so far.

The company also has said it would resume paying shareholders a dividend.

Disney said the governance and nominating committee of its board will evaluate the proposed Trian nominees and provide a recommendation to the board as part of its governance process.

“Disney has an experienced, diverse, and highly qualified Board that is focused on the long-term performance of the company, strategic growth initiatives including the ongoing transformation of its businesses, the succession planning process and increasing shareholder value,” the company said.

The Walt Disney Co. defended its record as activist investor Nelson Peltz of Trian Fund Management is teaming up with former Disney executive Isaac Perlmutter to mount a potential proxy fight.

Trian said it owns $3 billion worth of Disney stock and talked on Thursday with Disney CEO Bob Iger. Trian said Disney’s board was willing to meet, but turned down a request to put Peltz, Trian’s founder and CEO, on the board.

“Since we gave Disney the opportunity to prove it could ‘right the ship’ last February, up to our re-engagement weeks ago, shareholders lost about $70 billion of value,” Trian said. “Trian intends to take our case for change directly to shareholders.”

Disney stock closed up less than a point  Thursday. After the close of trading, Disney's board said it would pay stockholders a cash dividend of 30 cents a share.

In a statement, Disney said that Perlmutter, who was fired as chairman of Disney’s Marvel Entertainment unit as part of Disney’s cost-cutting program, owns 25 million of the 44 million Disney shares Peltz claims to control.

“This dynamic is relevant to assessing Mr. Peltz and any other nominees he may put forth as directors, as Mr. Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against Disney’s CEO, Robert A. Iger, which may be different than that of all other shareholders,” Disney said.

Disney also said that it has cut $7.5 billion in costs since Iger returned to the company and now plans to go from “a period of fixing to a new era of building.”

The cost-cutting plan convinced Peltz to back off from plans to mount a proxy battle last year. 

The company added that “with one of the strongest balance sheets in the media sector, Disney expects free cash flow to approach pre-COVID levels in fiscal 2024, and the Board and management are steadfast in our commitment to ensuring The Walt Disney Company’s long-term success for the benefit of all our shareholders.”

On Wednesday, Disney announced that it added James Gorman, CEO of Morgan Stanley and Jeremy Darroch, former group chief executive of Sky, to its board.

“Their appointments reflect Disney’s commitment to a strong board focused on the long-term performance of the company, strategic growth initiatives, the succession planning process, and increasing shareholder value,” the company said.

Disney said its board will recommend that shareholders vote for its slate of directors at the company’s upcoming meeting.

Mark Parker, chairman of Disney''s board, said the dividend was a sign things were improving at Disney.

“This has been a year of important progress for The Walt Disney Company, defined by a strategic restructuring and a renewed focus on long-term growth,” Parker said.   “As Disney moves forward with its key strategic objectives, we are pleased to declare a dividend for our shareholders while we continue to invest in the company’s future and prioritize meaningful value creation.”

An activist investor, Trian Fund Management, has accumulated a $900 million stake in Comcast and is in conversations with the cable company’s management about how to boost its stock price according to reports.

Trian, founded by Nelson Peltz, Ed Garden and Peter May, disclosed owning 7.2 million Comcast shares at the end of the second quarter and has increased its holding to about 20 million shares, according to the Wall Street Journal. 

“We have recently begun what we believe are constructive discussions with Comcast’s management team and look forward to continuing those discussions,” Trian said in a statement, according to the paper.

A Comcast spokesman declined to comment.

Trian, which managed $8.8 billion for investors, is likely to encourage Comcast to sell some of its assets and otherwise operate more efficiently. Trian had urged a breakup of Time Warner in 2016.

Some Comcast units, particularly its recently acquired Sky business, theme parks and movie studios, have been hurt by the COVID-19 pandemic. Other parts of the company, such as its broadband business, have fared well. 

Comcast stock jumped nearly $1 a share in last minute trading before closing at $44.68, down 1.28% on Monday. 

“We believe that Trian's focus on long-term shareholder value at large, growing franchise businesses makes it a potent new voice at Comcast,” said Peter Supino, analyst at Sanford C. Bernstein in a research note Monday.

Supino noted that he’d published an open letter to Comcast CEO Brian Roberts in June arguing that “Comcast's stock is demonstrably under-valued and that the pendulum of investor confidence now under-appreciates Comcast's strategic intelligence and commitment to long-term value creation.” 

There are several ways for Comcast shareholder to benefit, Supino said, and the scenario that offers the greatest long-term upside potential is spinning out its NBCUniversal and Sky units, Supino said.

Time Warner Inc. — under scrutiny from a trio of activist investors — has moved in a direction that could make it easier for minority investors to affect change.

In the long run, though, it might just be the company’s size and the volatility of the content business that keeps it together.

Time Warner has quietly amended its corporate bylaws, allowing holders of at least 3% of its stock for at least three years to nominate two members to its board of directors.

Also, per documents filed with the Securities and Exchange Commission on Feb. 3, as many as 20 investors could band together to meet the 3% requirement and elect new directors.

Investors who meet those criteria even can have their board slate included in Time Warner’s proxy statement, saving them the hassle and cost of having to contact other shareholders directly.

Other companies have adopted so-called “proxy access” rules. Time Warner had been asked by some shareholders to do so in the past, but the rules failed to win sufficient votes.

ACTIVISTS CIRCLING

That the company decided to bypass another vote on the matter and go directly to implementation is a bit curious, given reports that activist investors Carl Icahn, Corvex Management chief Keith Meister (an Icahn protégé) and Trian Fund Management head Nathan Peltz are all circling the company.

People familiar with the company said the move is not a reaction to those reports. “The timing is unfortunate,” one person familiar with Time Warner’s thinking said.

But is it? According to several analysts, breaking up or selling Time Warner wouldn’t just be di_ cult — it also wouldn’t make much sense.

Driving most of the breakup speculation has been the 24% decline in Time Warner’s stock price in 2015.

So far this year, the stock is up about 10.5%, mostly on deal speculation. But the entire sector has been in a tailspin, as media companies across the sector are pressured by sluggish TV ratings, declining ad rates and falling subscriber rolls due to cord-cutting.

Time Warner is unique in that it successfully pushed back against 21st Century Fox’s unsolicited $85-per-share offer in 2014 by growing the stock.

Through bold moves like the launch of its standalone HBO online service HBO Now and significant changes at Turner, Time Warner pushed its stock price above the Fox offer, ending that year at $85.42 per share.

The stock continued to grow in the early part of 2015, but slid again in August after The Walt Disney Co. lost about 3 million subscribers. The Disney losses touched off cord-cutting fears for some investors and sent the sector as a whole into a downward spiral.

TOO BIG TO BUY?

With the latest declines, investors are looking for another bold move and the easiest one to make is a breakup.

Wells Fargo media analyst Marci Ryvicker did a sum-of-the-parts valuation of Time Warner that showed potential take-out values for the company ranging from $71.63 to $105.16 per share, but she couched that data with a heavy dose of skepticism. Ryvicker couldn’t see any company in the programming space that was large enough to swallow Time Warner whole. 21st Century Fox, which tried and failed in 2014 to take over the company, is trading at $26.49 per share — about 1.5 times lower than Time Warner at $71.70.

While premium channel HBO and the Turner Broadcasting System cable networks are obviously valuable assets, Ryvicker didn’t see them as having any more value as separate or spun-off entities.

“A sum of the parts is always just math, and to be frank, our math doesn’t matter,” Ryvicker wrote in her January report.

Credit Suisse media analyst Omar Sheikh took it a step further last week, releasing a detailed report mapping out three potential strategies for Time Warner: spinning off HBO, Turner and the Warner Bros. movie studio as three separate entities; spinning off just HBO; and spinning off just Turner.

One of the biggest barriers to any of the spin scenarios is that they would trigger between $10 billion to $11 billion in redemption penalties to certain bondholders, according to Sheikh. Add in the loss of synergies and scale economies inherent in separating the business, and Sheikh estimated that the value range of a Time Warner breakup is just $79 to $89 per share.

Bottom line: Time Warner is worth more together than apart, according to Sheikh.

According to the analyst, Time Warner in its current form could grow cash flow by 25% and net income by one-third over the next three years. And initiatives to slow down content licensing to third-party subscription video-on-demand services like Netflix could help expand multiples. Taking those factors into account, Time Warner could increase its valuation to $90 per share in 12 to 18 months, Sheikh estimated.

BETTER TOGETHER

According to Sheikh, vertical synergies benefits to Turner and HBO from buying content from Warner Bros. would mostly be lost in a Turner spinoff, as the studio wouldn’t have as much incentive to sell its content to the networks and could lose the benefit of having an anchor buyer for its TV and movie output.

A spinoff would also erode horizontal synergies — mainly higher affiliate fees — because Time Warner’s networks would no longer be bundled. And content costs could also rise for Turner and HBO, which would no longer have the economies of scale of being part of a larger parent.

Sheikh said he also believes that separating Turner from HBO eliminates any potential benefit from the premium network’s relationship with Apple for HBO Now.

“These benefits are highly likely to grow over time, in our view, particularly if the cost of developing content is pushed higher by competition from new digital competitors like Netflix and Amazon,” Sheikh wrote.

That could be significant, given the growth the analyst expects from HBO Now. The over-the-top service could have 14 million subscribers by 2020, with 4 million of them churning off the MVPD service, according to Sheikh.

SIDEBAR: For What It’s Worth

Credit Suisse media analyst Omar Sheikh doesn’t believe much is happening via speculation around a possible breakup of Time Warner Inc. Here are three potential scenarios he foresees:

Scenario                        Market Value                Market Value Per Share

Three-Way Breakup . . . . . . .$66.7B-$74.4B . . . . . . . . . . . . . $79-$88

HBO Spinoff . . . . . . . . . . . . . .$67.3B-$75B . . . . . . . . . . . . . .$80-$89

Turner Spinoff . . . . . . . . . . . . $66.7B-74.5B . . . . . . . . . . . . . . $79-$88

SOURCE: Credit Suisse estimates