Disney’s 2024 Annual Meeting will be held on
April 3, 2024
Board Urges Shareholders to Vote the WHITE Card
FOR only Disney’s 12 Nominees
Board Believes Trian Group and Blackwells
Nominees Would Hinder Disney’s Transformation Efforts
The Walt Disney Company (NYSE:DIS) today sent a letter to
shareholders outlining the strength of the Board of Directors and
its oversight of Disney’s strategy and management team as the
Company navigates a new era of building that will drive meaningful
growth and shareholder value creation well into the future.
Disney’s Board of Directors urges shareholders to protect
their investment and the future of the Company by voting the WHITE
proxy card for only Disney’s 12 nominees and not the Trian Group or
Blackwells nominees. The 2024 Annual Meeting of Shareholders
will be held on April 3, 2024, and all shareholders of record as of
the close of business on February 5, 2024 are entitled to vote at
the meeting.
Disney has the right strategy to drive profitable growth and
value creation for shareholders and has made substantial progress
against our objectives to make our business more efficient and
effective, including a sharpened focus on our greatest brand and
franchise assets, a continued commitment to cutting costs and a
reinstatement of the dividend. The Company, its management and the
Board remain focused on this building plan, which will position our
streaming businesses for sustained growth and profitability,
reinvigorate the Company’s film studios, fortify ESPN for the
future and turbocharge growth in Disney’s Experiences business.
Further, Disney believes all 12 of its nominees are best
qualified to create sustainable shareholder value. The Disney Board
of Directors is comprised of engaged, diverse and dynamic leaders
whose skills, perspectives and insights are essential in driving
profitable growth and delivering on Disney’s strategic priorities
as the Company navigates ongoing, industry-wide challenges.
The Disney Board of Directors does not endorse the Trian
Group nominees, Nelson Peltz and Jay Rasulo, or the Blackwells
nominees, Craig Hatkoff, Jessica Schell and Leah Solivan, and
believes that they do not possess the appropriate range of talent,
skill, perspective and/or expertise to effectively support the
Board’s ongoing efforts to drive profitable growth and shareholder
value creation in the face of continuing, industry-wide
challenges.
The Company’s proxy statement has been filed with the SEC and is
being mailed to shareholders. Shareholders with questions about how
to vote their shares using the WHITE proxy card may call the
Company’s proxy solicitor toll-free at 1 (877) 456-3463 (from the
U.S. and Canada) or at +1 (412) 232-3651 (from other
countries).
The full text of the shareholder letter follows.
February 1, 2024
Dear Fellow Shareholders,
Thank you for your investment in The Walt Disney Company and
your commitment to its enduring legacy as the leading name in
global entertainment. Disney has an unparalleled portfolio of
valuable businesses, brands and assets, and a best-in-class
management team who, in close coordination with your Board, have
made substantial progress executing on the strategic transformation
of the Company. As a result, Disney has overcome one of the most
challenging periods in its history and a new era of building is
well underway to drive meaningful growth and shareholder value
creation long into the future.
That is why your vote using the WHITE proxy card FOR the
election of ONLY your Board’s 12 nominees at this year’s upcoming
Annual Meeting is particularly critical. As detailed in
Disney’s proxy statement, two hedge funds, Trian Fund Management,
L.P. and Blackwells Capital, are each seeking to replace a portion
of your Board with their own separate nominees, all of whom your
Board believes do not possess the appropriate range of talent,
skill, perspective and/or expertise to effectively support the
Board’s ongoing efforts to drive profitable growth and shareholder
value creation in the face of continuing industry-wide challenges.
Your Board believes that the attempts by the Trian Group and
Blackwells are likely to derail Disney’s progress as election of
any of their less qualified nominees would hinder the
transformation efforts underway.
ELECT THE BOARD BEST QUALIFIED TO CREATE
SUSTAINABLE SHAREHOLDER VALUE
Just one year after initiating a strategic overhaul of the
Company to restore creativity to the heart of its businesses and
establish a more efficient, cost-effective and streamlined approach
to operations, the Board and management team of The Walt Disney
Company are now intensely focused on building for the future. This
building plan, which is already showing strong results as described
below, is designed to position our streaming businesses for
sustained growth and profitability, reinvigorate the Company’s film
studios, fortify ESPN for the future and turbocharge growth in
Disney’s Experiences business over the long term.
Delivering on Disney’s significant growth potential will require
leadership that has a deep understanding of the Company’s current
strengths and assets and entertainment industry expertise –
particularly in navigating the myriad disruptive forces that are
unique to the media industry today. The Disney Board and management
team fully meets these requirements, being comprised of engaged,
diverse and dynamic leaders, whose skillsets are closely aligned
with the key drivers of our business, including media and
entertainment, direct-to-consumer expertise, strategic
transformation, technology and innovation and 360-degree brand
activation.
With its powerful brands, truly unique portfolio of
high-performing businesses, Bob Iger at the helm alongside a
seasoned group of world-class executives and a Board committed to
creating sustainable value for all shareholders, we believe that
Disney has tremendous underlying strength. We have accomplished a
remarkable amount of work in a brief amount of time, moving from a
period of fixing to a period of building.
I. Vote on the WHITE Proxy Card TODAY in Support of ONLY
Disney Director Nominees, Not Trian’s or Blackwells’
It is important that you use the WHITE proxy card to vote
for the election of only your Board’s 12 nominees: Mary T. Barra,
Safra A. Catz, Amy L. Chang, D. Jeremy Darroch, Carolyn N. Everson,
Michael B.G. Froman, James P. Gorman, Robert A. Iger, Maria Elena
Lagomasino, Calvin R. McDonald, Mark G. Parker and Derica W.
Rice.
Your Board does not endorse either of the Trian Group’s nominees
(Nelson Peltz and Jay Rasulo) or any of Blackwells’ nominees (Craig
Hatkoff, Jessica Schell and Leah Solivan). We believe that the
election of any of these individuals would impede leadership’s
ongoing execution of Disney’s strategic realignment and the Board’s
efforts to create value for shareholders for the reasons set forth
below.
In contrast to your current directors who have skills and
experiences directly relevant to, and closely aligned with, the key
drivers of our business and our strategic priorities:
- Mr. Peltz brings no media experience and has presented no
strategic ideas for Disney, while Mr. Rasulo’s perspective is stale
given he left Disney in 2015 and has not held any executive
positions in the industry since.
- Mr. Hatkoff and Ms. Solivan do not have any relevant large,
public media and entertainment company experience or skills that
would assist the Board in continuing to oversee the successful
execution of our strategic transformation.
- Ms. Schell would not be an independent director and does not
have any experience serving as a director of a public company.
II. Disney’s Board is Optimally Constituted to Oversee
Strategy, Growth, Succession Planning and Long-Term Shareholder
Value Creation
Disney’s directors possess significant expertise in implementing
strategic priorities while creating superior, sustainable
shareholder value at some of the most iconic American companies,
and have the skillsets, experiences and professional backgrounds
representing a diversity of perspectives and characteristics that
are particularly relevant to the Company’s business and strategic
objectives.
We remain steadfastly invested in Disney’s long-term success and
are committed to strong oversight for the Company and its
shareholders, as well as Board refreshment and aligning Board
skills and experiences with our strategic priorities to continue
driving the Company’s strategic transformation for the benefit of
all of our shareholders. To that end, the Board recently named two
new directors – James Gorman and Jeremy Darroch – both widely
respected leaders who will bring fresh perspectives and expertise
that complements the talents and experience of the Disney Board as
we continue to focus on delivering for shareholders and consumers
alike.
The Board remains committed to and actively engaged in the
high-priority work of succession planning. In particular, we are
confident that new Board member Mr. Gorman’s highly successful
tenure leading Morgan Stanley through its own business
transformation and his stewardship of a very successful multi-year
CEO succession process will be hugely additive to the Board’s
efforts in this area. To that end, he was appointed to the Board’s
Succession Planning Committee, which remains committed to CEO
succession planning and achieving a successful long-term outcome
for Disney and its shareholders.
III. Disney Has the Right Strategy to Drive Profitable Growth
and Value Creation for Shareholders
Led by a strong Board and management team, Disney is on the
right strategic path. The Company has emerged from one of the most
challenging periods in its history and is now fully in the midst of
a new era of building for future growth and profitability.
We have aggressively executed our key strategic priorities to
make Disney’s businesses more efficient and effective,
reinvigorated our foundational creative engines and sharpened our
focus on our greatest brand and franchise assets. We’ve done this
while cutting costs – ~$7.5 billion in cost reductions targeted by
the end of FY24 – and are continuing to seek additional
efficiencies without compromising our commitment to quality, growth
and value creation.
Given our strong balance sheet and commitment to cost cutting,
we returned to paying our shareholders a cash dividend of $0.30 per
share in respect of the second half of FY23 on January 10, 2024.
This is a strong starting point, from which we see ample
opportunity to continue to increase shareholder returns in the
future as earnings and cash flow grow.
Disney’s Building
Priorities
We are intently focused on achieving significant and sustained
growth and profitability in our Streaming business. Disney
built a leading Direct to Consumer (“DTC”) platform in only four
years and we are continuing to improve our DTC offerings with high
quality content, best-in-class proprietary advertising tools and a
more unified experience that are intended to result in more
subscriptions, higher engagement and lower churn. During our Q423
earnings call, we reiterated our expectation of achieving
profitability in streaming by the end of FY24 and are working to
deliver attractive profit margins in the future.
For the past 100 years, our Film Studios have produced
some of the most iconic stories and characters, generating value
across the entire company. We are intensely focused on
strengthening the creative output of our film studios to bring joy
to the next generation of audiences with our creative
excellence.
We are committed to telling great stories, leaning into our core
brands and franchises and reducing overall output to enable us to
concentrate on fewer projects and maintain the highest levels of
quality. To that end, we are targeting a $4.5 billion reduction of
annual entertainment cash content spend to focus on a more
selective, high-quality slate. As we restore creativity to the
heart of our business, we are also continuing our efforts around
the creation of fresh and compelling original IP.
With ESPN, we have the world’s leading sports media brand
and plan to transform it into the preeminent digital sports
platform. We are confident in the value of sports, demonstrated by
ESPN’s immense popularity and its growth in both revenue and
operating income over the past two fiscal years amidst a backdrop
of notable linear industry declines. As we prepare ESPN for a
streaming future, there are enormous opportunities to reach fans in
compelling new ways and fully integrate key features into our
primary digital ESPN offering.
Additionally, we are optimistic about the prospect of strategic
relationships for ESPN to assist with content, marketing and
distribution.
Disney is also prioritizing strategic investments to turbocharge
growth in our Experiences business, and is planning to
invest ~$60 billion in capital over the next 10 years to enhance
and expand domestic and international parks, as well as cruise line
capacity. We know the attractive return prospects of these
investments for shareholders and are confident in the growth
potential of these investments given our wealth of IP, innovative
technology, buildable land and unmatched creativity.
Overall, our progress and building strategy have been recognized
by investor ValueAct Capital, which supports the Board’s
recommended nominees. “Disney is the world’s leading entertainment
company. It has the best intellectual property, sports brand and
parks & experiences assets in the industry. As legacy
technologies transition to digital platforms, we believe Disney can
lead the media industry forward,” said Mason Morfit, Co-CEO of
ValueAct.
IV. Disney is On the Right Path to Deliver Results for its
Shareholders
After 100 years, we know Disney continues to have an enduring
positive impact on generations of people around the world. We also
know that this Company has tremendous resilience and fortitude in
times of great change and uncertainty. The Company’s Board and
management team are laser-focused on building upon this legacy,
driving growth and leveraging our iconic intellectual property,
unparalleled franchises and best-in-class portfolio of assets to
deliver value for shareholders.
Disney’s Board remains committed to oversight of management as
it executes against its strategic vision to drive increased
shareholder value and celebrate the creativity and storytelling
that have been at the heart of Disney’s iconic legacy.
Your Board recommends that you vote on the WHITE
proxy card FOR all 12 of Disney’s nominees. We urge you not
to vote using any blue proxy card from the Trian Group or green
proxy card from Blackwells. Please disregard and discard those
cards.
Thank you again for your continued support of The Walt Disney
Company.
Sincerely, The Walt Disney Company Board of Directors
Your vote is extremely
important no matter how many shares you own.
Whether or not you expect to attend the Annual Meeting, please
promptly use your WHITEproxy card to vote FOR ONLY your Board’s 12 nominees. (If you
received this letter by email,you may simply click the WHITE “VOTE
NOW” button in the email.) If you have any questions about
how to vote your shares, please call the firm assisting us with the
solicitation of proxies:
INNISFREE M&A
INCORPORATED Shareholders may call: 1 (877)
456-3463 (toll-free from the U.S. and Canada) or +1 (412)
232-3651 (from other countries) Remember, please do
not use any blue Trian or green
Blackwells proxy card. If you inadvertently vote using a blue or
green proxy card, you may cancel that vote simply by voting again
TODAY using the Company’s
WHITE proxy card. Only your
latest-dated vote will count!
Forward-Looking Statements
Certain statements in this communication may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
regarding the Company’s expectations; beliefs; plans; strategies;
business or financial prospects or outlook; future shareholder
value; expected growth and value creation; profitability;
investments; cost reductions and efficiencies; content offerings;
priorities or performance; and other statements that are not
historical in nature. These statements are made on the basis of the
Company’s views and assumptions regarding future events and
business performance and plans as of the time the statements are
made. The Company does not undertake any obligation to update these
statements unless required by applicable laws or regulations, and
you should not place undue reliance on forward-looking
statements.
Actual results may differ materially from those expressed or
implied. Such differences may result from actions taken by the
Company, including restructuring or strategic initiatives or other
business decisions, as well as from developments beyond the
Company’s control, including: the occurrence of subsequent events;
further deterioration in domestic or global economic conditions or
failure of conditions to improve as anticipated, including
heightened inflation, capital market volatility, interest rate and
currency rate fluctuations and economic slowdown or recession;
deterioration in or pressures from competitive conditions,
including competition to create or acquire content; consumer
preferences and acceptance of our content and offerings, pricing
model and price increases, and corresponding subscriber additions
and churn, and the market for advertising and sales on our
direct-to-consumer services and linear networks; health concerns
and their impact on our businesses; international, political or
military developments; regulatory or legal developments;
technological developments; labor markets and activities, including
work stoppages; adverse weather conditions or natural disasters;
and availability of content. Such developments may further affect
entertainment, travel and leisure businesses generally and may,
among other things, affect (or further affect, as applicable): our
operations, business plans or profitability, including
direct-to-consumer profitability; our expected benefits of the
composition of the Board; demand for our products and services; the
performance of the Company’s content; our ability to create or
obtain desirable content at or under the value we assign the
content; the advertising market for programming; income tax
expense; and performance of some or all Company businesses either
directly or through their impact on those who distribute our
products.
Additional factors are set forth in the Company’s Annual Report
on Form 10-K for the year ended September 30, 2023, including under
the captions “Risk Factors”, “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and “Business”,
and subsequent filings with the Securities and Exchange Commission
(the “SEC”), including, among others, quarterly reports on Form
10-Q.
Additional Information and Where to
Find It
Disney has filed with the SEC a definitive proxy statement on
Schedule 14A, containing a form of WHITE proxy card, with respect
to its solicitation of proxies for Disney’s 2024 Annual Meeting of
Shareholders. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
FILED BY DISNEY AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT ANY SOLICITATION. Investors and
security holders may obtain copies of these documents and other
documents filed with the SEC by Disney free of charge through the
website maintained by the SEC at www.sec.gov. Copies of the
documents filed by Disney are also available free of charge by
accessing Disney’s website at www.disney.com/investors.
Participants
Disney, its directors and executive officers and other members
of management and employees will be participants in the
solicitation of proxies with respect to a solicitation by Disney.
Information about Disney’s executive officers and directors is
available in Disney’s definitive proxy statement for its 2024
Annual Meeting, which was filed with the SEC on February 1, 2024.
To the extent holdings by our directors and executive officers of
Disney securities reported in the proxy statement for the 2024
Annual Meeting have changed, such changes have been or will be
reflected on Statements of Change in Ownership on Forms 3, 4 or 5
filed with the SEC. These documents are or will be available free
of charge at the SEC’s website at www.sec.gov.
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version on businesswire.com: https://www.businesswire.com/news/home/20240201401622/en/
Media Contacts:
David Jefferson The Walt Disney Company Corporate Communications
(818) 560-4832 david.j.jefferson@disney.com
Mike Long The Walt Disney Company Corporate Communications (818)
560-4588 mike.p.long@disney.com
Steve Lipin Gladstone Place (212) 230-5930
slipin@gladstoneplace.com
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