Activist investor
Nelson Peltz
escalated his criticism of the Walt
Disney Co.
DIS 3.49%
’s board and advocated for the removal of director
Michael B.G. Froman,
blaming him for backing governance and compensation decisions that Mr. Peltz says have harmed the company.
Mr. Peltz’s Trian Fund Management LP said Thursday in a letter that Disney’s board was responsible for the company’s recent share-price declines, falling income and other examples of “destruction of value,” because it had failed to plan properly for CEO succession and align the incentives of management and the board with those of shareholders.
“We cannot sit idly by,” Trian said in the letter, part of its proxy battle that seeks to add Mr. Peltz, an 80-year-old corporate-raider-turned-activist-investor, to Disney’s board. Trian pushed shareholders to demand “an ownership mentality in the boardroom,” or risk further stock-price declines.
Robert Iger’s Biggest Moves That Reshaped Disney: From Star Wars to Streaming
Disney said Thursday that it didn’t support Mr. Peltz or his son, Matthew, named as an alternate nominee for Mr. Peltz, joining its board. “Neither Mr. Peltz nor his son offer skills or experience additive to the Disney board that replace the decadeslong experience of Mr. Froman,” Disney said. Mr. Froman didn’t respond to a request for comment.
In an updated version of Trian’s proxy statement filed in recent days, the hedge fund said that Mr. Peltz should replace Mr. Froman, a credit-card executive who has served on Disney’s board since September 2018.
Trian said in its proxy statement that he is responsible for “weak corporate governance” at Disney as a member of the company’s governance and nominating committee. Mr. Peltz would be in a better position than Mr. Froman to “align executive compensation with shareholder interests,” according to the hedge fund’s proxy statement.
Disney shares closed Thursday at $113.21, down more than 40% from record highs reached in early 2021.
Mr. Peltz has focused his campaign on a few key issues, especially what he describes as Disney’s “over the top” executive compensation packages. In proxy materials filed with the Securities and Exchange Commission, Trian has argued that Disney’s stock-market performance hasn’t justified the handsome compensation executives have received.
Michael B.G. Froman, whom Trian is pushing to oust, has served on Disney’s board since 2018.
Photo:
Wei Leng Tay/Bloomberg News
Historically, media executives have had some of the richest pay packages in America, and Disney Chief Executive Robert Iger has long been one of the highest-paid in the industry.
Since 2007, Mr. Iger has realized $1.1 billion in total compensation, according to a new analysis of Disney’s proxy materials prepared for The Wall Street Journal by compensation-data firm Equilar Inc.
About $473 million, or about 43% of that total—which includes salary, benefits, bonuses, the value of stock awards when they vest, or Mr. Iger gets full control of them, and other compensation—came during the fiscal years 2017 to 2021. During that period, Disney’s total return was 88.5%, Equilar said.
Reed Hastings, who co-founded Netflix in 1997, has received $2.3 billion in total realized compensation since 2006.
Photo:
Michael M. Santiago/Getty Images
Warner Bros. Discovery CEO David Zaslav realized $310 million.
Photo:
Kevin Dietsch/Getty Images
The realized-pay figures reflect the market value of the stock at vesting—when Mr. Iger received full control of the underlying shares—as well as the proceeds of exercising stock options. Mr. Iger also held unvested restricted stock and vested-but-unexercised options valued at $21.7 million at Thursday’s closing share price, based on an analysis from ISS Corporate Solutions, a Rockville, Md.-based ESG data and analytics provider.
Among peers now running major publicly traded media and entertainment companies, only
Netflix
Executive Chairman
Reed Hastings,
who was co-CEO until last month, has been paid more than Mr. Iger over the past decade and a half.
Mr. Hastings, who co-founded Netflix in 1997, has received $2.3 billion in total realized compensation since 2006, nearly $1.8 billion of it in the five years through 2021, the most recent data available and a period when Netflix delivered total shareholder returns of 519%, Equilar’s analysis found.
A Disney spokesperson pointed out that under Mr. Iger’s tenure as CEO, the company produced a cumulative total shareholder return of 554%.
Disney competitors, including Discovery Inc. and Viacom Inc., the companies now known as
Warner Bros. Discovery Inc.
and
Paramount Global Inc.,
generated shareholder returns of -5.7% and -20.4% respectively over the same period. Meanwhile, Warner Bros. Discovery CEO
David Zaslav
realized $310 million, while Paramount’s
Bob Bakish
realized $72 million.
Mr. Iger led Disney for 15 years starting in 2005, a period when Disney’s market value grew roughly fivefold, to around $240 billion, mainly because of a series of acquisitions Mr. Iger directed. He handed over the CEO chair in 2020 to
Bob Chapek,
although Mr. Iger remained for a little over a year as executive chairman of the company. In November, the board dismissed Mr. Chapek and restored Mr. Iger to the top job after key executives lost confidence in Mr. Chapek’s leadership.
Mr. Iger’s compensation from 2017 through fiscal 2021 represented about 1.5% of the $31.2 billion in cumulative net income that Disney generated during that period, Equilar’s analysis shows.
Mr. Hastings was paid the equivalent of 15.4% of the $11.5 billion in net income that Netflix produced over the same period. Mr. Zaslav’s compensation amounted to 7.6% of the $4.1 billion in net income generated by Discovery Inc., Warner Bros. Discovery’s predecessor company, which Mr. Zaslav led before last year’s merger.
In proxy materials filed with regulators last month, Disney urged shareholders to vote against Mr. Peltz’s slate of directors. Disney said Mr. Peltz and other representatives of Trian, after months of meetings with Disney executives and board members, hadn’t “actually presented a single strategic idea for Disney.”
The company also said that Mr. Peltz was unsuited for the board because he didn’t have experience in the media or technology sector or “any other industry that is driven by creative talent or creating unique customer experiences.” The board said that Mr. Iger’s record at Disney had proved that he could help turn around the company’s fortunes without Mr. Peltz on the board.
Write to Robbie Whelan at robbie.whelan@wsj.com and Theo Francis at theo.francis@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Activist investor
Nelson Peltz
escalated his criticism of the Walt
Disney Co.
DIS 3.49%
’s board and advocated for the removal of director
Michael B.G. Froman,
blaming him for backing governance and compensation decisions that Mr. Peltz says have harmed the company.
Mr. Peltz’s Trian Fund Management LP said Thursday in a letter that Disney’s board was responsible for the company’s recent share-price declines, falling income and other examples of “destruction of value,” because it had failed to plan properly for CEO succession and align the incentives of management and the board with those of shareholders.
“We cannot sit idly by,” Trian said in the letter, part of its proxy battle that seeks to add Mr. Peltz, an 80-year-old corporate-raider-turned-activist-investor, to Disney’s board. Trian pushed shareholders to demand “an ownership mentality in the boardroom,” or risk further stock-price declines.
Robert Iger’s Biggest Moves That Reshaped Disney: From Star Wars to Streaming
Disney said Thursday that it didn’t support Mr. Peltz or his son, Matthew, named as an alternate nominee for Mr. Peltz, joining its board. “Neither Mr. Peltz nor his son offer skills or experience additive to the Disney board that replace the decadeslong experience of Mr. Froman,” Disney said. Mr. Froman didn’t respond to a request for comment.
In an updated version of Trian’s proxy statement filed in recent days, the hedge fund said that Mr. Peltz should replace Mr. Froman, a credit-card executive who has served on Disney’s board since September 2018.
Trian said in its proxy statement that he is responsible for “weak corporate governance” at Disney as a member of the company’s governance and nominating committee. Mr. Peltz would be in a better position than Mr. Froman to “align executive compensation with shareholder interests,” according to the hedge fund’s proxy statement.
Disney shares closed Thursday at $113.21, down more than 40% from record highs reached in early 2021.
Mr. Peltz has focused his campaign on a few key issues, especially what he describes as Disney’s “over the top” executive compensation packages. In proxy materials filed with the Securities and Exchange Commission, Trian has argued that Disney’s stock-market performance hasn’t justified the handsome compensation executives have received.
Michael B.G. Froman, whom Trian is pushing to oust, has served on Disney’s board since 2018.
Photo:
Wei Leng Tay/Bloomberg News
Historically, media executives have had some of the richest pay packages in America, and Disney Chief Executive Robert Iger has long been one of the highest-paid in the industry.
Since 2007, Mr. Iger has realized $1.1 billion in total compensation, according to a new analysis of Disney’s proxy materials prepared for The Wall Street Journal by compensation-data firm Equilar Inc.
About $473 million, or about 43% of that total—which includes salary, benefits, bonuses, the value of stock awards when they vest, or Mr. Iger gets full control of them, and other compensation—came during the fiscal years 2017 to 2021. During that period, Disney’s total return was 88.5%, Equilar said.
Reed Hastings, who co-founded Netflix in 1997, has received $2.3 billion in total realized compensation since 2006.
Photo:
Michael M. Santiago/Getty Images
Warner Bros. Discovery CEO David Zaslav realized $310 million.
Photo:
Kevin Dietsch/Getty Images
The realized-pay figures reflect the market value of the stock at vesting—when Mr. Iger received full control of the underlying shares—as well as the proceeds of exercising stock options. Mr. Iger also held unvested restricted stock and vested-but-unexercised options valued at $21.7 million at Thursday’s closing share price, based on an analysis from ISS Corporate Solutions, a Rockville, Md.-based ESG data and analytics provider.
Among peers now running major publicly traded media and entertainment companies, only
Netflix
Executive Chairman
Reed Hastings,
who was co-CEO until last month, has been paid more than Mr. Iger over the past decade and a half.
Mr. Hastings, who co-founded Netflix in 1997, has received $2.3 billion in total realized compensation since 2006, nearly $1.8 billion of it in the five years through 2021, the most recent data available and a period when Netflix delivered total shareholder returns of 519%, Equilar’s analysis found.
A Disney spokesperson pointed out that under Mr. Iger’s tenure as CEO, the company produced a cumulative total shareholder return of 554%.
Disney competitors, including Discovery Inc. and Viacom Inc., the companies now known as
Warner Bros. Discovery Inc.
and
Paramount Global Inc.,
generated shareholder returns of -5.7% and -20.4% respectively over the same period. Meanwhile, Warner Bros. Discovery CEO
David Zaslav
realized $310 million, while Paramount’s
Bob Bakish
realized $72 million.
Mr. Iger led Disney for 15 years starting in 2005, a period when Disney’s market value grew roughly fivefold, to around $240 billion, mainly because of a series of acquisitions Mr. Iger directed. He handed over the CEO chair in 2020 to
Bob Chapek,
although Mr. Iger remained for a little over a year as executive chairman of the company. In November, the board dismissed Mr. Chapek and restored Mr. Iger to the top job after key executives lost confidence in Mr. Chapek’s leadership.
Mr. Iger’s compensation from 2017 through fiscal 2021 represented about 1.5% of the $31.2 billion in cumulative net income that Disney generated during that period, Equilar’s analysis shows.
Mr. Hastings was paid the equivalent of 15.4% of the $11.5 billion in net income that Netflix produced over the same period. Mr. Zaslav’s compensation amounted to 7.6% of the $4.1 billion in net income generated by Discovery Inc., Warner Bros. Discovery’s predecessor company, which Mr. Zaslav led before last year’s merger.
In proxy materials filed with regulators last month, Disney urged shareholders to vote against Mr. Peltz’s slate of directors. Disney said Mr. Peltz and other representatives of Trian, after months of meetings with Disney executives and board members, hadn’t “actually presented a single strategic idea for Disney.”
The company also said that Mr. Peltz was unsuited for the board because he didn’t have experience in the media or technology sector or “any other industry that is driven by creative talent or creating unique customer experiences.” The board said that Mr. Iger’s record at Disney had proved that he could help turn around the company’s fortunes without Mr. Peltz on the board.
Write to Robbie Whelan at robbie.whelan@wsj.com and Theo Francis at theo.francis@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8