Will Shareholders Vote Bob Chapek Out?
A rumor has circulated on social media in recent days.
Well, I shouldn’t say rumor as much as surging appeal to Disney shareholders.
Some critics of Bob Chapek have recognized an opportunity. In March, Bob Chapek’s position on the Board of Directors comes up for debate.
Technically, shareholders possess the ability to vote Chapek off the Board of Directors. Will they take advantage and negate some of his power?
Let’s discuss this theory.
What’s the Deal?
I don’t need to tell you that some agitators reeaaaaally dislike Bob Chapek.
Much of the criticism stems from the usual sources like the New York Post and other outlets that feed off Disney.
Many of these Rupert Murdoch publications maintain a ceaseless onslaught of Disney attacks. They do this because such stories succeed as click-baiting would-be readers.
The latest example came on February 7th, when the New York Post used a Reddit thread to craft an argument against Disney’s current CEO.
The Post cites this subreddit while claiming that Chapek’s days could be numbered on Disney’s Board of Directors.
The Redditor describes a theory wherein Disney shareholders could express their displeasure with Chapek.
On March 9th, people who own shares of Disney will vote on the measures listed here.
To the Redditor’s credit, this individual acknowledges something vital to the entire conversation. It’s this quote:
“It may seem insignificant, and will likely not be successful in removing him directly….”
In other words, this move represents little more than a demonstration of dissatisfaction with Chapek.
However, the Redditor adds the following:
“…but recall that Michael Eisner lost 43% of the vote in 2004 after Roy E. Disney lead [sic] a campaign to oust him and he was removed shortly thereafter. We can do this again.”
Can they? Well, that depends on a lot. So let’s start with the basics.
About Disney’s Shareholders Meetings
The Walt Disney Company went public on November 12th, 1957. So, shareholders around the world have technically owned Disney since then.
As part of Disney’s corporate responsibilities, it must honor several requirements for American public entities.
One of those involves the naming of a Board of Directors. Another is an annual shareholder meeting.
That’s the event I referenced coming up in two weeks. During this meeting, shareholders will participate virtually rather than in person.
You can actually follow along at this website. The discussion begins at 10 a.m. PST/1 p.m. EST and should take a couple of hours.
As part of this meeting, shareholders will evaluate eight proposals, some of which carry more intrigue than others.
Some represent mere formalities, like Disney’s independent accounting firm of choice for 2022.
Disney actually puts the finger on the scale on all eight proposals. You’ll notice that all of them include Disney’s suggested vote.
Executives want you to vote for the first three and against the next five.
Disney would really hate for you to vote in favor of Proposals 4 and 5, one of which would force it to disclose backdoor political negotiations.
Meanwhile, the other one would lead to more meetings than desired, thereby wasting the company’s resources and adding to its aggravation.
I previously evaluated Proposal 7, which Disney probably should do but won’t.
This idea, while well-intended, would add a layer of transparency Disney doesn’t want.
Then, there’s Proposal 1, the ostensible formality…
What’s Proposal 1?
Page 72 lists the details of Proposal 1: “Election of the eleven nominees named in the proxy statement as Directors, each for a term of one year.”
If you scroll down to page 72 – hint: do a search for Proposal 1 to get there quickly – you’ll notice 11 names and faces.
These are the would-be Disney Board of Directors for the upcoming year.
Now, you may think that the controversial debate would center on Susan Arnold. After all, she was recently named Chairperson of the Board.
Some may question her viability in the position or at least want to know more about the person who ostensibly heads the Disney empire now.
Instead, the conversation centers on the picture and name directly beneath her, Disney CEO Bob Chapek.
Some critics perceive Chapek as the root of all evil at Disney. This shareholder meeting represents their only chance this year to note their dissent.
During the meeting, shareholders will vote on each potential board member. Various Chapek haters plan to use this opportunity as a referendum on Chapek.
Their goal is to vote against his election in large enough volumes to prevent Chapek from remaining on the board.
Will Chapek Get Voted Out?
Barring something shocking – and I’m talking Red Wedding shocking – no. This strategy will not work.
Remember that the person who petitioned for it has said as much.
The best historical example was Michael Eisner’s vote in 2004. At the time, Roy Disney had turned on Eisner and championed Comcast (!) as a buyer.
In that alternate dimension/hellscape, Comcast would have owned the Happiest Place on Earth for the past 15 years.
Having watched their performance with Universal Studios in the interim, I shudder to think about how poorly this would have gone.
Universal Studios has succeeded despite Comcast rather than because of its corporate overlord.
I say this as a reminder that Disney fans have had it really good for a very long time.
On some level, even Chapek’s harshest critics understand that he’s protected the company from disaster during a pandemic. Unfortunately, Comcast left Universal Studios twisting in the wind instead.
Anyway, Eisner’s vote went 43 percent against him vs. 57 percent in favor of him. So, he still won, and that was even after some major shareholders turned on him.
Chapek isn’t in that position. At all. His recent shareholder meeting bordered on one prolonged flex. Also, the stock is up quite a bit in February.
At worst, a small percentage of shareholders will vote against him, only to get overwhelmed by the whales.
I would be surprised if more than a couple of Disney’s top 25 shareholders voted against Chapek. They’re thrilled with his recent performance.
As such, this is much ado about nothing and another headline explicitly designed to attack Disney’s CEO.
However, that’s only my opinion. If, say, 35 percent of voters don’t support Chapek on the board, he’ll have some work to do on the PR front…which he already does.
Feature Image: Matt Stroshane/Courtesy Disney Parks