Disney pushed back on a report today by leading proxy advisory firm ISS recommending shareholders vote activist investor Nelson Peltz to the board, and withhold votes for company board nominee Maria Elena Lagomasino.
“We strongly believe that ISS reached the wrong conclusion in its recent report when it comes to adding Nelson Peltz to the board,” said Mark Parker, chairman of the board, in a statement.
“In contrast to Glass Lewis, ISS fails to acknowledge the breadth of perspective and expertise Ms. Lagomasino adds to the Board. The strong recent performance and results overseen by the Disney Board demonstrate our focus on long-term shareholder value creation and succession planning and our commitment to good governance practices.” Glass Lewis is another influential proxy advisory firm that came out in last week in favor of all Disney nominees.
Disney said its 12 Board nominees “are best qualified to provide diligent oversight of management and create sustainable shareholder value. Nelson Peltz does not bring additive skills to the board, nor does he have a meaningful plan to deliver superior shareholder value in an evolving and increasingly complex global landscape, in stark contrast to the director Trian seeks to replace – Maria Elena Lagomasino.”
Disney also noted that Trian’s “silent partner, former Disney employee Ike Perlmutter, owns almost 79% of Trian’s Disney shares” and that the ISS itself report called Perlmutter’s involvement “an unfortunate distraction.”
“This dynamic is relevant to assessing the Trian Group’s nominees, as Mr. Perlmutter has a fraught history and longstanding personal agenda against Disney’s CEO, Robert A. Iger, which would likely inhibit Nelson Peltz from working constructively with Disney’s Board, threatening the company’s continued turnaround.”
ISS, however, decided that Peltz would still be useful on the board despite the connection, citing in particular what it called critically flawed succession planning at Disney.
Disney also defended Lagomasino “as a seasoned financial leader with an extensive capital markets career that has been centered on fiduciary responsibility, honing an investor perspective, and deep expertise in corporate governance,” noting her role a a founder of the Institute for the Fiduciary Standard, a think tank that promoted the vital importance of the fiduciary standard in investment and financial advice.
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