Thwarted Meetings, a Sailing Trip Excuse and an Angry Investor: Why Activist Nelson Peltz Threatens to Disrupt Bob Iger’s Disney Comeback

The Disney CEO girds for hard questions on its Feb. 8 earnings call as a battle over a board seat intensifies

nelson peltz bob iger disney
Romain Maurice/Getty Images for Carbone Beach | Dia Dipasupil/Getty Images

Bob Iger is gearing up to take the earnings stage on Feb. 8 for his first quarterly report and public Wall Street conference call since his surprise return to the Disney CEO post that he exited in February 2020. But running what is likely to be a less-than-stellar quarterly financial presentation for the company is far from the most surreal experience Iger has faced in recent months, thanks to Nelson Peltz.

Trian Fund Management founder Peltz is a billionaire activist investor who hosted a fundraiser for President Donald Trump in February 2020. He’s known to be unhappy with Disney’s response to Florida’s “Don’t Say Gay” bill and at present he’s in the midst of a lawsuit against the wedding planner for his daughter Nicola Peltz and her now-husband, Brooklyn Beckham. For most of last fall, Peltz was also busy trying to engage with Disney brass, asking for meetings and phone calls.    

At first, he received an appropriate response for a publicly traded entity, according to a source close to Peltz, but then the Disney brain trust began erecting walls. Then-CEO Bob Chapek passed Peltz off to Christine McCarthy, Disney’s powerful chief financial officer, who passed the activist shareholder off to senior executive VP and general counsel Horacio Gutierrez. Just as Peltz was becoming increasingly frustrated, and as Disney’s stock price plummeted, Chapek was ousted on Nov. 20, and suddenly Iger was back as CEO. But for Peltz, the perceived runaround continued. As Thanksgiving approached, Peltz tried to get a meeting with new leadership ahead of the deadline to nominate a new member for Disney’s board of directors at the company’s annual shareholders meeting. He was told to wait until after Thanksgiving. When he tried to schedule something in late December with Iger, he was told that the CEO would be sailing and wouldn’t be available until January.   

“When you’ve lost $120 billion in market cap for the year, and you’re back new on the job, it’s not a great look,” the source says.   

(A Disney rep pointed to the Feb. 6 proxy filing that details the company’s communication with Peltz about setting a meeting after the holiday.)

Feeling ignored, Peltz informed Iger in a Dec. 20 phone call that if Disney did not acquiesce to his demand for a board seat, he intended to mount a proxy fight that would challenge Iger’s legacy. A meeting was suddenly forthcoming. So, in early January, the Palm Beach-based Peltz made the cross-country trek to Burbank after finally scoring a meeting with Iger and the Disney board. But the meeting proved to be less than satisfying for the 82-year-old investor, whose Trian has a nearly $1 billion stake in Disney.

Peltz is a man accustomed to getting his way. On Jan. 10, he arrived at Disney headquarters for his allotted 45 minutes to find Iger, McCarthy and Gutierrez in the room but no board members — the 12 men and women instead appeared via Zoom. Peltz presented his deck, which he provided to the board two days in advance of the meeting to give members time to digest it. As he went through all of his slides, he awaited feedback. But none was forthcoming. The board remained silent, and the sole question came from a member of the leadership team who asked about Peltz’s calculation of a so-called overpayment on the Fox acquisition.   

“There was this sense of defer and delay and not really an openness to engaging,” the source adds.   

All this drama culminates as Disney prepares to deliver its first look at its financial performance earnings since Iger returned and for an inevitable battle with Peltz over the disputed board seat. (The investor’s son, Matthew Peltz, is running as an alternate that his father might swap in.) The proxy fight will come to a head at Disney’s annual shareholders meeting, which is typically held in March but this year has been scheduled for April 3 as a virtual meeting. The Peltz saga presents a huge headache as Iger tries to map out a broad restructuring for the company.

“It’s his opportunity, that, of course, he’s going to take, to set his agenda and his priorities,” says Jessica Reif Ehrlich, BofA Securities analyst, noting that with Iger only signing on for a two-year stint as CEO before naming another successor, he’s got to hit the ground running right out of the gate.

“If you look at Bob Iger’s history, and I’m really going way back, he’s very decisive and he’s very quick,” Reif Ehrlich says. “When he took over for Michael Eisner (in 2005), he took four actions really quickly, and nobody expected it because he was the No. 2 and kept to himself: He made peace with Stanley Gold and Roy Disney, who were a thorn in Michael Eisner’s side. He made peace with Steve Jobs, which was another contentious relationship with Michael, and that eventually led to Disney buying Pixar, which saved their animation, as the whole division had been floundering. He moved ‘Monday Night Football’ from ABC, where it had been for 30 years, to ESPN so they had a dual revenue stream. And then the last thing he did was move strategic planning from corporate back to the divisions, which, as an outsider, doesn’t seem like a big deal, but it dramatically and quickly increased morale in the company.”    

Iger took his first steps to reorganizing Chapek’s installed Disney team just after returning in November, removing Kareem Daniel as chairman of Disney Media and Entertainment Distribution, with the promise that more changes would be made in the coming months. “Without question, elements of DMED will remain, but I fundamentally believe that storytelling is what fuels this company, and it belongs at the center of how we organize our businesses,” Iger wrote in a memo to staff at the time.   

With that in mind, Reif Ehrlich says “priority No. 1” for Iger is establishing that he has gotten “creative control back to the creative executives.” But the “how” is key here.   

“Does he de-layer management? What is the structure? What is the cost cutting? What does he say about Disney+? Does he reset the subs goal? What can he do to drive profitability? There’s a lot of things he can address,” Reif Ehrlich says. “Then on Parks, which seem to be incredibly strong for both Disney and Universal, they raised prices very quickly [following pandemic closures]. So Bob already took some action in getting rid of the parking fees at Disney hotels and expanding the hours for annual passholders. Just things that were causing friction with consumers, he’s already moved and taken some action.”

Shareholders want to know “what they say about the dividends,” Reif Ehrlich adds. “Do they start it even small, just to reinstate a dividend, which I think is their intention at some point, I just don’t know when. That would go a long way as well. There’s a lot of stuff to address, but it wasn’t all Bob Chapek – some of it was just COVID.”  

But when it comes to how the Peltz drama will be addressed on the call by Disney leadership, Reif Ehrlich doesn’t want to even venture a guess. The challenge from the outside comes as Disney is touting to shareholders the recent transition in the chairman slot, from the long-serving Susan Arnold to former Nike CEO Mark Parker. That leaves the board downsized from 12 to 11 members. Peltz’s campaign has targeted Disney board member Michael Froman, encouraging shareholders to vote him out at the April 3 annual meeting when members stand for election or re-election.

Wall Streeters seem largely bemused by Peltz’s war of words with Disney, suggesting that longtime Disney-watchers don’t expect his campaign to have much impact in the long run. “It’s gotten kind of nasty and personal and I’d rather just avoid it,” Reif Ehrlich says. But she did offer that she believes “Bob has a lot of support.” 

Chris Albrecht, the former HBO and Starz CEO who is no stranger to corporate boardroom battles, calls the situation “disruptive.” Albrecht says he endured something akin to the Peltz drama several times during his executive career, including when Carl Icahn tried to buy enough Lions Gate stock to seize control of the studio when Albrecht was leading Starz.    

“It can be very consuming depending on how long it goes on,” says Albrecht. “And it’s also unpredictable. When you’re running a company, you’re trying to create some things that are predictable amid a business that’s unpredictable. So, when you have a situation with a very sophisticated outside investor coming in and trying to impact the course that the company is taking, it’s a distraction and hard to control where it leads. The job of a CEO is to try to run the company in a way that produces stability and growth, and when you have any situation where you have an activist investor or an unwanted takeover offer, it just mobilizes the company in a way that it’s not really prepared to be mobilized.”   

Peltz declined Variety‘s request for an interview ahead of Wednesday’s earnings call.

Given that the Peltz saber-rattling now spans two Disney regimes, there’s a sense in Burbank that the investor is prepared for a long fight. In fact, some insiders believe Peltz is a stand-in for his friend and Palm Beach neighbor Ike Perlmutter, the Marvel Entertainment chairman who has a fractured relationship with Iger. A source familiar with Perlmutter’s thinking says the bad blood stems from Iger dismantling Perlmutter’s power base back in 2015, when the latter stopped overseeing Marvel Studios. (Like Peltz, Perlmutter also was a major Trump backer but now appears to be betting on Florida Gov. Ron DeSantis for the 2024 presidential election.) As the Peltz power grab heats up, some on the opposing side are quick to note Peltz’s moves that he’d likely rather forget, like the time he tried to buy New York magazine with Jeffrey Epstein along with fellow investors Mort Zuckerman, Donny Deutsch and Harvey Weinstein.   

Amid Iger’s attempts to stave off an intense PR battle, just as Peltz has sat down for an in-depth interview with New York Times’ journalists James Stewart and Ben Mullin (scheduled to run sometime after the 4:30 p.m. ET Wednesday earnings call), the CEO is said to have enlisted one of his most trusted confidantes in former communications executive Zenia Mucha. Sources say Mucha has been informally consulting for Iger. (A Disney spokesperson denies that Mucha is offering input.)

As for why Peltz is specifically targeting the board seat currently held by Froman, insiders say it’s because Peltz believes Froman sits on Disney’s compensation committee. And Peltz has railed against the company’s “bloated” compensation that “is just not aligned well enough with shareholder interests,” according to one source. The Peltz camp points to the Disney board’s decision to renew the contract of Chapek in March but terminate him eight months later, a move that came with an eight-figure severance bill. (Disney notes that Froman does not sit on its compensation committee. He has served on the audit and nominations and governance committees, which are not responsible for compensation.)

“The fact that the board signed Chapek to another really lucrative contract in March and then let him go in November, that’s costing something like $40 million for someone who’s just sitting on a beach now,” the source adds.

Updated Feb. 9 at 10:10 AM ET to reflect that Disney denies that Zenia Mucha is informally consulting.

(Pictured: Nelson Peltz, Bob Iger)