Reflections on Disney's Historic Proxy Battle
PLUS After Earnings with Braze CEO Bill Magnuson highlights 'the craft' of digital engagement strategies
Disney’s recent proxy battle, a pivotal event in the history of corporate governance, saw a dramatic face-off between the company and activist investor Nelson Peltz. With digital and traditional strategies heavily influencing perceptions and decisions, both sides poured significant resources into their campaigns—Peltz's Trian Partners spending about $25 million, and Disney countering with up to $40 million. This expenditure rivaled corporate marketing campaigns like Wendy’s two year, $55 million initiative to boost breakfast sales by $1.9B (Peltz is Wendy’s Chairman), highlighting the immense stakes involved. Bob Iger and Disney triumphed in the proxy fight, securing around 75% of the retail shareholder votes in support of the current board, underscoring the critical influence of retail investors. Meanwhile, Peltz's investment in Disney has surged by approximately $300 million since initiating his activist campaign in January 2024. This success could motivate other activists to launch similar campaigns regardless of their likelihood of winning the vote count, forcing companies to deploy effective engagement and communication strategies to unite their shareholders and potentially enhance stock value.
Disney launched a $40M omni-channel campaign to drive voter turnout
Created votedisney.com to host and distribute their message
Released animated videos to educate shareholders on proxy voting
Used paid media to capture and drive digital traffic
Trian Partners spent $25M on similar tactics
Created www.restorethemagic.com to host and distribute their message. The site included long-form interviews with Peltz and fellow Trian board candidate and former Disney CFO Jay Rasulo.
Created engaging infographics to reinforce messaging around the company’s poor stock performance
Sent a letter to shareholders with an illustration and the message “Spaghetti on the wall will not feed shareholders starved of returns.”
For Disney, Small Shareholders Loom Large in Boardroom Fight (NY Times 4/1/24)
Retail Investors Could Tip the Scales: With individuals holding up to 40% of Disney shares, their collective choice could be decisive in the high-stakes proxy fight against Nelson Peltz, showcasing the unprecedented influence retail investors have in modern corporate battles.
Emotional Connection Influences Decisions: Gavin Doyle's journey from using allowance money to buy Disney shares to becoming a small yet passionate investor underscores the deep emotional ties and brand loyalty that could sway shareholder votes, emphasizing the unique relationship between Disney and its retail investors.
Disney's Broad Appeal Mobilizes Shareholders: The company's extensive campaign to engage small shareholders, employing beloved characters and direct appeals, highlights Disney's strategy to leverage its cultural impact and brand recognition in rallying support against activist challenges.
The Role of Personal Stories in Shareholder Engagement: Doyle's anecdote illustrates the power of personal investment stories in connecting with retail investors, suggesting that beyond financial considerations, emotional and nostalgic connections to Disney play a crucial role in the proxy battle.
There’s an Actual, Legal Website Where Disney Shareholders Are Auctioning Off Their Proxy Votes (Indie Wire 3/7/24)
Legal Auction for Disney Votes: A website allows auctioning Disney proxy votes, with a current high bid of $100,000 for 500,000 votes.
Uncertain Outcome: Despite over 22,000 votes listed, reaching the 500,000 target before Disney's annual meeting appears unlikely.
Mystery Bidder: The bidder's identity remains unknown, adding intrigue to the proxy battle.
Strategic Move: This auction strategy showcases a cost-efficient way to gain voting rights, emphasizing the tactical aspects of corporate proxy battles.
Have Disney Representatives Been Leaking Early Voter Information to Sway Institutions? (Bill Ackman via X)
Leaks and Election Integrity: Activist investor Bill Ackman raised questions about the integrity of Disney's proxy battle with Nelson Peltz due to leaked early voting results, potentially swaying the election's outcome.
Impact on Shareholder Decisions: The leaks may influence institutional shareholders, fearing repercussions from Disney's management, to align with the incumbent board, showcasing the strategic manipulation of shareholder sentiment.
Call for Regulatory Oversight: The situation highlights the need for SEC investigation and action against practices that compromise shareholder governance, emphasizing the importance of transparency and fairness in corporate elections.
Support for Nelson Peltz: Amidst these tactics, the case for Nelson Peltz's inclusion on the Disney board is strengthened, advocating for his potential to contribute positively to the company's governance and appealing to shareholders to reconsider their votes.
Nelson Peltz’s Disney Consolation Prize: A $300 Million Gain (WSJ)
Trian Partners Gains from Disney Stake: Nelson Peltz's investment firm, Trian Partners, has realized a profit of around $300 million from its Disney investment. Despite losing the proxy battle, the firm's strategic moves, including an early sell-off and leveraging Ike Perlmutter's shares, contributed to this financial outcome.
Investment Details and Profits: Trian's initial investment in Disney amounted to approximately $800 million in 2022, buying shares at around $88 each. Through strategic selling and an agreement with Ike Perlmutter, Trian managed a significant gain.
Strategic Proxy Battle and Stake Management: Despite the proxy battle loss, Trian's financial strategies, including a partnership with Perlmutter granting voting rights and a portion of share gain, bolstered its returns.
Comparison with Market Performance: The profit marks a 40% return on Trian's investment, aligning with the S&P 500's performance over the same period, showcasing Trian's strategic investment acumen amidst challenges.
Last week on After Earnings - Braze: AI Marketing Advisors & The Craft of Customer Engagement with CEO Bill Magnuson
In the wake of Disney's proxy battle, the conversation with Braze CEO Bill Magnuson on After Earnings could not be more relevant, highlighting Braze's pivotal role in engaging customers with cutting-edge personalization and targeting technology. From a Stakeholder Labs perspective, Magnuson articulates a clear roadmap on the future direction of Investor Relations due to the evolving need for omni-channel awareness and engagement campaigns among a global shareholder base. With the amount of money and resources Disney committed to winning their proxy battle, is it unreasonable to assume that shareholders could be receiving personalized text messages from corporate board candidates to sway voter sentiment? Stakeholder Labs technology is supporting that future by integrating verified shareholder data into robust CRM and customer engagement platforms like Braze.
Braze's Comprehensive Engagement Platform: Serving as a pivotal tool for B2C brands, Braze offers deep insights into customer behaviors across digital interfaces, enabling targeted, personalized communication.
AI and Machine Learning at Braze's Core: For over a decade, Braze has harnessed artificial intelligence and machine learning, recently integrating generative AI to inspire creative marketing strategies and adapt to global communication needs.
Founder's Forward-Looking Approach: CEO Bill Magnuson emphasizes strategic long-term investments and the use of cutting-edge technology to foster meaningful customer connections, ensuring sustained business growth.
Global Reach and Versatile Application: Braze not only supports a wide array of B2C verticals but also manages interactions with over 6 billion monthly active users, showcasing its capability to execute diverse marketing strategies on a global scale.