The drama that's been happening in the boardroom has been worthy of one of WaltDisney's (NYSE: DIS) big action movie blockbusters. Late last year, activist investor Nelson Peltz of Trian Partners initiated a proxy fight, seeking a place on Disney's board. In a recent presentation, Peltz cited Disney's recent box office failures, lack of profitability in its streaming segment, and the "botched" succession planning that resulted in the ouster of former CEO Bob Chapek.
Shareholders had their say on the matter at Disney's 2024 annual meeting on Wednesday, rebuffing the activist investor and officially backing the entire slate of Disney-backed directors. Disney's legal and compliance chief Horacio Gutierrez made the announcement Wednesday, saying that Bob Iger and the entertainment company had prevailed by a "substantial margin." This marked the second such defeat in as many years for Peltz, who had tried unsuccessfully last year to join Disney's board.
Image source: Disney.
We have a winner
The ultimate beneficiaries of this drama were Disney shareholders. Since Peltz announced his proxy fight roughly six months ago, Disney stock has gained nearly 54% (as of market close on Tuesday), marking its highest level in nearly two years.
A quick look at Disney's recent results suggests there are reasons to be bullish. In the company's fiscal 2024 first quarter (ended Dec. 30, 2023), Disney announced it was on track to achieve its goal of $7.5 billion in cost savings by the end of fiscal 2024, which is expected to boost profits by at least 20% year over year. Perhaps more importantly, the company revealed it expects to achieve profitability for its streaming business this year, making it a "key earnings growth driver" for Disney.
Finally, Disney's shareholders will benefit from the company's capital return policies. The company recently boosted its semi-annual per-share dividend payout to $0.45, an increase of 50%. Disney also announced a new share repurchase plan, targeting $3 billion in buybacks this fiscal year.
So, in the epic battle in the boardroom, Disney's shareholders were the ultimate winners.
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Danny Vena has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.
