Updated Mar 21, 2024 - Business

Proxy adviser ISS supports Peltz for Disney board

Illustration of two hands grabbing for a Mickey Mouse ears hat surrounded by abstract shapes.

Illustration: Gabriella Turrisi/Axios

Institutional Shareholder Services recommended Nelson Peltz for Disney's board, providing a boost for hedge fund Trian Partners in its proxy fight against the Hollywood giant.

Why it matters: The influential firm holds heavy sway over institutional shareholders, whose Disney board director votes will be tallied on April 3.

Yes, but: ISS recommended that shareholders not vote for Trian's other nominee, former Disney executive Jay Rasulo.

  • The proxy adviser also advised shareholders to not vote for three directors nominated by hedge fund Blackwells Capital, which also launched a proxy fight against the company.

What they're saying: "Dissident nominee Peltz, as a significant shareholder, could be additive to the succession process, providing assurance to other investors that the board is properly engaged this time around. He could also help evaluate future capital allocation decisions," ISS wrote in its report on Thursday.

  • ISS recommended that Disney shareholders withhold their vote against current Disney board member Maria Elena Lagomasino.
  • "Multi-year concerns surrounding Lagomasino's role as a compensation committee member strengthen the case that Peltz's addition, on balance, would appear a net positive," ISS wrote.

Peltz also garnered support from more than a dozen current and former public company directors on Thursday.

  • "Some of us, like you, were skeptical about Nelson and were initially opposed to the notion of having him on our boards," the letter said. "However, after having worked with Nelson, we know that our concerns were misplaced."
  • Meanwhile, Laurene Powell Jobs became the latest public support backer of Bob Iger, following a list of third parties endorsing the CEO.

The other side: "We strongly believe that ISS reached the wrong conclusion in its recent report when it comes to adding Nelson Peltz to the board," Disney board chairman Mark Parker said in a statement.

  • Parker added: "ISS fails to acknowledge the breadth of perspective and expertise Ms. Lagomasino adds to the board."

Catch up quick: Fellow proxy adviser Glass Lewis, which has a much smaller client base compared to ISS, recommended all of Disney's directors on Monday.

What's next: The split recommendation could prompt Trian and Disney to work out some kind of agreement before the April 3 vote. Or, the two sides proceed to the annual meeting, leaving the makeup of the board in the hands of shareholders.

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