In a pivotal move, the California Public Employees Retirement System (CalPERS) announced on Friday its support for the election of Trian Fund Management’s nominees, Nelson Peltz and Jay Rasulo, to the Walt Disney Company’s board.
This decision is part of a highly scrutinized and costly corporate control dispute. CalPERS, a significant U.S. pension fund with 6.65 million Disney shares as of December’s end, expressed its stance to Reuters, emphasizing the anticipated benefits of new perspectives on Disney’s board.
“CalPERS believes Walt Disney Co will benefit from fresh eyes on its board of directors and voted its company shares in favor of candidates Nelson Peltz and Jay Rasulo,” the fund communicated.
Positioned among Disney’s top 30 investors, CalPERS underscored its voting principles which advocate for independent boards, executive pay oversight, and enhanced transparency.
The addition of Peltz and Rasulo, deemed qualified for fostering necessary governance changes, is seen as beneficial for Disney.
The upcoming annual meeting will be a critical juncture where shareholders determine the composition of Disney’s 12-member board.
This assembly is essential as CEO Bob Iger spearheads efforts to revitalize the $224 billion-valued company, emphasizing cost reduction and creative rejuvenation.
Amidst this backdrop, the company is endeavoring to persuade shareholders of the board’s adequacy, citing recent share price improvements and strategic initiatives under Iger’s leadership.
Conversely, Trian and Blackwells Capital, another hedge fund vying for three board seats, have criticized Disney’s current board for alleged strategic missteps, including succession planning for Iger and technology utilization.
They also propose considering the segregation of the company’s real estate assets.
Amid these developments, proxy advisory firms have voiced their recommendations.
Institutional Shareholder Services (ISS) supports Peltz’s election, while Egan-Jones endorses both Peltz and Rasulo, highlighting Rasulo’s previous role as Disney’s CFO and his overlooked candidacy for the CEO position.
Glass Lewis, however, recommends backing all of Disney’s director nominees, showcasing the diversity of perspectives within the investment community regarding the company’s future direction and governance.