As Disney (DIS) enters the final stretch of its proxy battle, with the shareholder vote deadline looming on Wednesday, the company currently holds a lead in the votes against activist investor Nelson Peltz. Michael Levin, founder of The Activist Investor and Disney shareholder, joins Yahoo Finance Live to share his views on the ongoing battle.
Levin notes that the proxy battle "is an assessment" of Disney's actions over the past few years and the company's progression under CEO Bob Iger, acknowledging that there are "many players" beyond investors vying for board seats. He highlights that Nelson Peltz and other shareholders are trying to ensure that they can "get value out of [Disney]."
Levin reveals that he has "long thought the Disney board was quite insular," describing it as an exceptional board for Disney shareholders. However, he notes that the dynamics have shifted over the past 2 to 4 years, with the Board allowing Iger to have his way: "It hasn't worked out." Still, Levin acknowledges that Nelson Peltz is "a very experienced director" and someone who would hold Iger accountable, stating that Peltz "is the type of director shareholders can generally rely on."
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Editor's note: This article was written by Angel Smith
Video Transcript
JARED BLIKRE: Disney's proxy battle is entering its final stretch. The fate of Disney's board will finally be determined after activist investor Nelson Peltz's month-long battle for a boardroom shakeup. Walt Disney is currently pulling ahead in its proxy fight against Peltz with more than half of the votes counted, the "Wall Street Journal" reports.
Peltz is seeking board seats for himself and former Disney CFO Jay Rasulo. And for more on what we can expect from Wednesday's shareholder vote, we're joined by Michael Levin, founder of The Activist Investor and Disney shareholder. Thank you for joining us here today. Give us your big picture assessment.
It looks like this is a huge, epic battle. Disney, household name, tons of retail participation, something like 40% retail ownership of the stock and now we have this very public battle. Draw the lines for us and tell us what's going on.
MICHAEL LEVIN: Well, this is a-- thanks for having me. This is, in some sense, an assessment of what's happened at Disney over the past many years, in the past two or three years. And it's a bit of a review of what CEO Bob Iger has done in the past two or three years and there's a lot to it.
There's many, many players here. It's not just Trian Partners founder Nelson Peltz, a distinguished activist investor who's done this many times before. He's working with a aggrieved, disgruntled former Disney executive, Ike Perlmutter. Perlmutter sold Marvel Comics to Disney. So the two of them have been coordinating on this.
There's a third investor that has been involved, a shareholder called Blackwells Partners, that has-- Blackwells Capital that has also nominated some directors. So it's one of the more complicated, messier situations that activist investors have seen. But to your point, it really is a reflection of shareholder sentiment about Disney.
Share price hasn't done well lately. There are questions about its overall strategy and how it's going to compete in its various markets. And in some respects, Trian and Nelson were just shareholders like me trying to make sure that they were able to get value out of this.
There's some more specific points that Trian, and Blackwells, and so forth have brought up really related to how the company is governed, and how the board of directors has related to Iger. And so some of this particular-- some of the specifics that Peltz has brought up all pertain to how well the board supervises manages, leads Iger, or on the other hand, how much Iger basically leads the board and, sort of, tells them what to do.
BRAD SMITH: Michael, correct me if I'm wrong, you've been a Disney shareholder for 30 years now.
MICHAEL LEVIN: Correct.
BRAD SMITH: From what you've seen play out with this company over decades at this juncture, what way do you want this vote to go and to best position Disney for its next inflection point?
MICHAEL LEVIN: Well, I'm, as you could probably heard, I do this kind of thing too, activist investing. I have a website, theactivistinvestor.com and so forth. So you could see where I'm coming from here.
I have long thought that the Disney board was quite insular and really refused to push back on anything Bob Iger wanted to accomplish. For a long time, that was really good for Disney shareholders. There were many deals, and executive recruiting, and so forth that he did that just really worked out well.
Past two, three, four years, it hasn't been quite the case. The board has, in our view, kind of let Iger do, kind of, what he want and it hasn't worked out. So I would-- and for all of his bluster, Nelson Peltz is a very experienced director. He's been on some really high-profile boards and been able to hold executives accountable. The overall perception, I suppose, among a lot of shareholders is that whatever Iger wants in the boardroom happens and that those directors don't really push back on him.
Well, Nelson Peltz is not the, kind of, person to not push back. He doesn't need this board seat for his resume, like some other potential directors or even some Disney directors. He just wants to make sure that we get a proper succession plan in place, that the decisions that the company makes about where it wants to invest money, allocate capital are all thoroughly vetted and well conceived. So you know, he's someone that-- he's the type of director that shareholders can generally rely on to at least make sure that there's not just quiet acceptance of what a CEO wants to do. But instead, there's a thorough and potentially contentious discussion in the boardroom--
BRAD SMITH: Sure.
MICHAEL LEVIN: --about the direction that the company wants to go.
