An unexpected character has joined the unfolding business drama at Walt Disney Co. The company resurrects the character of Professor Ludwig Von Drake, Donald Duck’s knowledgeable uncle, popping him onto social media to encourage investors to side with Disney’s list of board directors at its upcoming annual meeting scheduled for April 3. This move is intended to sideline five nominees, including billionaire activist investor Nelson Peltz, who were put forward by shareholder groups looking to provoke changes within the entertainment colossus.
Von Drake, in an informational video, urges shareholders to vote only for Disney’s 12 nominees using the white proxy card and specifically advises against voting for the nominees from the Trian Group or Blackwell. The significance of this year’s voting process is stressed, regardless of the number of shares an individual may possess.
The commitment Disney is showing to push back against Peltz reveals the gravity with which they regard his challenge. Nelson Peltz, holding the CEO title at Trian Management LP, has a history of investing heavily to achieve his goals, demonstrated by the record $60 million he spent to gain a place on the board of Procter & Gamble seven years ago. As Columbia law professor Dorothy Lund suggests, his fight with Disney could end up costing even more.
Not content to simply work for institutional investor votes, Disney is making a play for retail votes as well, campaigning through votedisney.com and through content that features the character first introduced in Disney cartoons as far back as 1961. Lund suggested the cartoon gimmicks are designed to capture the attention of small individual shareholders who may not typically cast votes, encouraging them to see the importance of the situation.
If Peltz comes out on top, he plans to initiate changes at every level in each Disney business line, ranging from theme parks to studio operations. Peltz argues that Disney’s profit margin trails behind major media brands like Netflix and Warner Bros., largely due to continual struggles to turn a profit from its films and streaming services. Peltz confidently told Bloomberg Law he believes Disney is overconfident about victory and not managing their operation as effectively as needed. Disney, however, refused to comment about its campaign.
As the vote draws closer, the tactics employed by both sides continue to escalate, resembling more a political campaign than a boardroom discussion. This is not only a fight for control but also a significant test for the SEC’s universal proxy card rule implemented in 2021. As Columbia Law’s Lund observes, the extensive spending in these campaigns may be a measure of the rule’s impact on the voting process.
Disney, no less confident than its cartoon creation Von Drake, remains steadfast in the face of opposition. The outcome lies in the hands of the voters and only time will reveal who takes a bigger bite of this contested apple.