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Nike exec Mark Parker will lead the board while investor Nelson Peltz’ fund expressed concern that Disney leaders “failed to effectively communicate the financial rationale behind the strategic pivot.”
By Alex Weprin
Media & Business Writer
The Walt Disney Co. is shaking up its board of directors, tapping Nike executive chairman Mark Parker to be chairman, effective as of its next annual meeting.
Susan Arnold, who has been chair since Bob Iger retired from the company at the end of 2021 (and who asked him to return last year), will step down from the board at that time. The company says her departure is consistent with Disney’s 15-year board term limit.
“Mark Parker’s vision, incredible depth of experience and wise counsel have been invaluable to Disney, and I look forward to continuing working with him in his new role, along with our other directors, as we chart the future course for this amazing company,” said Bob Iger, Disney’s CEO, in a statement. “On behalf of my fellow Board members and the entire Disney management team, I also want to thank Susan for her superb leadership as Chairman and for her tireless work over the past 15 years as an exemplary steward of the Disney brand.”
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Parker will also chair a new committee on the Disney board: a “succession planning” committee dedicated to advising the board on the status of CEO planning.
However, the company also disclosed that it is facing a proxy fight from activist investor Nelson Peltz and his fund Trian Partners. Trian has nominated Peltz to serve on the board. In a presentation published on Jan. 11, the investment firm described many of Disney’s challenges as “self-inflicted” and advocated for the entertainment giant to restore its dividend by fiscal year 2025, seek more “efficiencies and additional profits” and expressed concern that Disney management’s direct-to-consumer streaming push with Disney+ “failed to effectively communicate the financial rationale behind the strategic pivot.”
Peltz’ fund went on to elaborate its concerns with Disney+, adding: “We are surprised that Disney’s best-in-class IP, franchises, and scale have not led to in-line, if not superior, unit economics compared with Netflix, which generally lacks high quality, franchise IP.” It also claimed that Netflix is more cost effective in its production and programming costs compared to Disney.
The activist investor’s Trian also specified that it is not looking to oust Iger or spin off assets like ESPN but that the fund is for “ensuring successful CEO succession within 2 years,” meaning that it is looking for Iger to leave that role at that time.
The Disney board disclosed in a statement earlier in the day that it “remains open to constructive engagement and ideas that help drive shareholder value. While senior leadership of The Walt Disney Company and its Board of Directors have engaged with Mr. Peltz numerous times over the last few months, the Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee, and instead vote FOR all the Company’s nominees.”
In its letter asking shareholders for support, the Disney board also went into some detail about Iger’s mission during his current tenure.
“Mr. Iger’s mandate is to use his two-year term and depth of experience in the industry to adapt the business model for the shifting media landscape, rebalancing investment with revenue opportunity while bringing a renewed focus on the creative talent that has made The Walt Disney Company the envy of the industry,” the company said. “Mr. Iger has already taken decisive steps to realign content creation and distribution, and reposition Disney’s streaming platforms and linear broadcast and cable networks for enhanced profitability for the Company.”
The board shake-up comes amid a tumultuous year for Disney, which ousted Bob Iger’s successor (and now predecessor) Bob Chapek last November. According to The Hollywood Reporter‘s Kim Masters, Parker played a critical role in that decision, eventually convincing Arnold that it was the right move.
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