In Blow To Disney, Leading Proxy Advisory Firm Backs Nelson Peltz For Company’s Board

ISS, the most influential proxy advisory service, has recommended shareholders vote to put Trian’s Nelson Peltz on Disney’s board, saying the activist investor, “with his considerable experience on other boards and fiduciary duties owed to a large shareholding group, appears best positioned to bring a shareholder perspective to the board.”

ISS advises shareholders how to vote at annual meetings. Disney’s is coming up April 3. It did not recommend a vote for Trian’s other nominee, former Disney executive Jay Rasulo.

Its report today differs from that of Glass Lewis, another advisory firm that last week recommended shareholders support only Disney board nominees.

To get Peltz on the board, ISS recommends shareholders withhold votes for current director Maria Elena Lagomasino, one of the two directors Peltz was also targeting.

“Dissident nominee Peltz, as a significant shareholder, could be additive to the succession process, providing assurance to other investors that the board is properly engaged this time around. He could also help evaluate future capital allocation decisions. Moreover, multi-year concerns surrounding Lagomasino’s role as a compensation committee member strengthen the case that Peltz’s addition, on balance, would appear a net positive,” ISS said.

The ISS decision seems largely driven by poor succession planning.

“The events leading up to the CEO transition in 2020 and the strategic missteps taken over the past several years appear to indicate that the board is not functioning in the most optimal way. With that in mind, a shareholder representative who is well versed in the imperative to hold management to account would be well positioned to provide the catalyst that this board apparently needs to improve its effectiveness.”

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