Trian presses Disney to replace board member Michael Froman with Nelson Peltz

Key Points
  • Activist investor Trian sent another letter to Disney, pushing for the removal of a board member in favor of instituting Nelson Peltz, as the proxy battle between the two heats up.
  • Trian is pushing for votes to put Peltz on the board and remove Michael Froman, according to a Thursday filing.
  • Trian holds 9.4 million shares of Disney and went public with its activist campaign in early January.

In this article

Nelson Peltz
David A. Grogan | CNBC

The proxy battle between Disney and activist investment firm Trian Management LP is heating up ahead of the company's annual shareholder meeting.

Earlier in January Trian went public with its fight for a seat on the board, taking issue with Disney's $71 billion acquisition of Fox in 2019, board missteps in the succession planning process and losses for shareholders.

The two traded barbs on Thursday after Trian said in a filing that Disney shareholders should vote to remove Michael Froman from the board and replace him with Nelson Peltz.

"Trian Group believes Mr. Froman has no experience as a public company director outside of Disney," the firm said in a statement Thursday. "In contrast, Nelson Peltz has served on numerous public company boards over the last several years."

Disney's board responded later Thursday saying Froman's "deep background in global trade and international business" leads them to believe he is better qualified than Peltz to help drive shareholder value.

Trian is arguing that Disney shareholders have lost out in value over the years due to "weak corporate governance." The firm said Disney lost more than $120 billion of its market value in 2022, earnings per share has declined 50% since 2018 and pointed to Disney eliminating its dividend in 2020.

Trian said it holds about 9.4 million shares valued at approximately $1 billion, which it accumulated months ago.

Disney's board on Thursday urged shareholders not to endorse Peltz. The board said that replacing Froman with Peltz would be a mistake, saying Peltz would "threaten the strategic management of Disney during a period of important change in the media landscape."

Last month, Disney shot back at Trian, defending CEO Bob Iger's past acquisitions. The company also said Peltz didn't have an understanding of Disney's business and lacked the skills to drive shareholder value while presenting no strategy. Disney said its board was where it needed to be.

"Peltz has no track record in large cap media or tech, no solutions to offer for the evolving media landscape," Disney said in an investor presentation released Tuesday.

In a move to preempt and oppose Trian in January, Disney said Mark Parker, the executive chairman of Nike, would become the new chairman of the board.

Froman, the vice chairman and president of strategic growth at Mastercard, has served as a director on the board since 2018. He also served as U.S. Trade Representative under then-President Barack Obama.

Few members of Disney's board have media experience outside of the Mouse House.