With Nelson Peltz Looming, Disney Adopts New Director Nomination Rules
As The Walt Disney Company prepares for another proxy battle with activist investor Nelson Peltz, the company adopted new bylaws covering nominations of directors by outside parties.
The move is a clear response to Peltz’s ploy to gain two Disney board of directors seats.
New Disclosure Requirements
The new amendments “enhance the procedural mechanics and disclosure requirements relating to business proposals submitted and director nominations made by stockholders.”
The new disclosure requirements include “certain additional background information, disclosures and representations regarding any proposing stockholders, any proposed director nominees and business and any other persons related to a stockholder’s solicitation of proxies.”
Additionally, “any notice of director nomination be accompanied by all written questionnaires required of the company’s directors completed and signed by any proposed director nominees.”
Disney’s new bylaws also addressed the recently adopted amendments to Rule 14a-19 under the Securities Exchange Act of 1934.
The new SEC rule went into effect for shareholder meetings involving contested director elections held after August 31, 2022, and requires that the universal proxy card “must include all director nominees presented by management and shareholders for election at the upcoming shareholder meeting.”
The rules also require shareholders to present their own director candidates to solicit holders of at least 67% of the voting power of shares entitled to vote in the election.
Disney’s new bylaws additionally state that “any person directly or indirectly soliciting proxies using its own proxy card use a proxy card color other than white.”
Disney Reinstates The Dividend
In conjunction with the new rules and bylaws, Disney announced that it was reinstating the dividend for the first time in over three years.
Shareholders at the close of business on December 11, 2023, will get a $0.30 per share dividend payment on January 10, 2024.
“This has been a year of important progress for The Walt Disney Company, defined by a strategic restructuring and a renewed focus on long-term growth. As Disney moves forward with its key strategic objectives, we are pleased to declare a dividend for our shareholders while we continue to invest in the company’s future and prioritize meaningful value creation,” Disney chairman Mark Parker.
With Peltz bolstered by over $2 billion of Ike Perlmutter’s Disney shares, it is clear that the company is not taking any chances.
As both sides prepare for another showdown, Disney seems more fortified and ready than ever.