The Takeaways from Disney’s Proxy Battle with Nelson Peltz

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New voting rules made for sharper attacks, while a bold defense kept the activist investor at bay. But pressure remains on the company’s chief, Bob Iger.

Bob Iger, C.E.O. of Disney, gestures with his right hand while speaking at the DealBook Summit last year. The background is blue.
Bob Iger, C.E.O. of Disney, has prevailed in the company’s contentious proxy battle with an activist investor.Haiyun Jiang for The New York Times

It’s over. Disney fended off the activist investor Nelson Peltz for the second time in two years, as its shareholders rejected his effort to win two seats on its board.

The House of Mouse claimed a “substantial” margin of victory, after a bitterly fought contest with Peltz and his major backer, the former Marvel chair Ike Perlmutter. Based on preliminary results from Wednesday’s annual investor meeting, Disney’s board candidates won the backing of 75 percent of individual shareholders, an outsize investor base.

But like any good Disney tale, the board fight provided a series of lessons for the future — for companies and activists alike.

A robust defense matters. Executives, led by the Disney C.E.O. Bob Iger, mapped out a series of bold initiatives last autumn, in part to blunt Peltz’s calls for change, according to The Wall Street Journal. That included cost-cutting efforts, an investment in the video game giant Epic Games and a shake-up in the struggling movie division.

It helps that Disney’s stock has risen 20 percent in the past year, diminishing Peltz’s argument that the company needed help. (His biggest wins have come at companies like Procter & Gamble where share prices languished.) That almost certainly mattered a great deal to big investors like BlackRock and Vanguard, which sided with Disney.

New proxy voting rules changed the fight’s dynamics. For years, companies’ shareholders were asked to choose between two slates of board candidates proposed either by the companies or by activist investors. But a new S.E.C. rule allows shareholders to more easily vote for a mix of nominees from both sides.

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