In Disney Proxy Battle, A Second Proxy Advisory Firm Backs Activist Investor Nelson Peltz

Proxy advisory company Egan-Jones on Wednesday became the second independent firm to support activist Nelson Peltz‘s effort to secure seats on the Disney board.

The endorsement follows that of ISS earlier this month, which was a notable win for Peltz’s Trian Fund Management. The activist firm is seeking director slots for Peltz and ex-Disney CFO Jay Rasulo when Disney shareholders cast board votes at the company’s annual meeting next Wednesday.

Unlike ISS, Egan-Jones supports both Peltz and Rasulo. The firm is recommending that shareholders withhold support for Maria Elena Lagomasino and Michael B.G. Froman, who are members of Disney’s slate of board nominees.

“We see very little downside and a lot of upsides in putting the Trian nominees on the board,” Egan-Jones said in an announcement. The firm cited an “apparent lack” of a long-term succession plan and a board that “appears cut off and unwilling to engage with investors and the broader market.”

Egan-Jones said the company’s business model is “built for the last decade, but not forward looking and flexible enough to ensure success in the next.” The current board, it added, is characterized by “a desire to protect the status quo for as long as possible and at all costs.”

Trian began agitating last year after Disney shares sank to a multi-year low, though they have since rebounded. Along with succession, Trian has criticized Disney’s film strategy. The opposition movement is the most significant faced by Disney since 2004, when Michael Eisner was stripped of his chairman title. That action soon led to his exit from the company and ushered in the start of Iger’s initial 14-year run as CEO. After turmoil at the company under his hand-picked successor, Bob Chapek, Iger returned as CEO in November 2022.

Disney has repeatedly hit back at Peltz, saying he lacks media business experience. The 81-year-old investor has had a track record of leading a number of successful proxy battles, including a recent one at consumer products giant Procter & Gamble.