Proxy advisory firm Institutional Shareholder Services (ISS) endorsed activist investor Nelson Peltz’s bid for election to Walt Disney’s board, intensifying the drama ahead of the shareholder vote on April 3.
ISS’s recommendation follows Disney’s own endorsements, including support for its director nominees by another proxy advisor, Glass Lewis.
ISS highlighted Disney’s significant stock underperformance compared to the S&P 500 and suggested that Peltz, from Trian Partners, could offer a valuable shareholders’ perspective. While ISS acknowledged Disney CEO Bob Iger’s suitability for the current role, it questioned the board’s ability to select his successor, with Iger planning to remain until 2026.
However, ISS only endorsed Peltz and not Trian’s other nominee, former Disney CFO Jay Rasulo. It also advised shareholders to withhold votes for Blackwells Capital’s nominees and Disney’s candidate Maria Elena Lagomasino.
Glass Lewis, in its recommendation, supported Disney’s plan, with backing from shareholders like director George Lucas and JPMorgan Chase CEO Jamie Dimon, whose bank advises Disney in the proxy fight.
Disney disagreed with ISS, arguing that Peltz lacks additive skills and a substantial plan for value creation. It expressed concerns about Peltz’s ties to former Disney executive Isaac Perlmutter, who owns a majority of shares supporting Trian’s bid.
Trian highlighted parts of ISS’s report, emphasizing its comments on Disney’s CEO succession process and performance. Notably, ISS suggested that Peltz could enhance the succession process and evaluate future capital allocation decisions.
The recommendations of proxy advisors hold significant weight with institutional shareholders, with a high proportion of ISS-supported nominees historically being elected.