Disney, Facing Activist Investor Pressure, Adds 2 Board Members

The Walt Disney Company, bracing for a second proxy battle with the activist investor Nelson Peltz, reinforced its board on Wednesday.

James P. Gorman, Morgan Stanley’s chief executive, and Jeremy Darroch, who formerly ran Sky, a British television company, will join Disney’s board early next year, according to a securities filing. “Their appointments reflect Disney’s commitment to a strong board focused on the long-term performance of the company, strategic growth initiatives, the succession planning process and increasing shareholder value,” Disney said in a statement.

The board’s chairman, Mark G. Parker, who is the executive chairman of Nike, said in a statement that Mr. Gorman was “integral to Morgan Stanley’s well-managed succession process over the past year.”

Francis A. deSouza, a technology executive who has served on the Disney board since 2018, will not stand for re-election at Disney’s annual meeting in the spring, leaving the company with 12 directors.

While a search started in April, according to Disney’s filing, the board reinforcements were announced as multiple activist investors circle the company. Most notably, they include Mr. Peltz, who has been jockeying for multiple seats on Disney’s board and is aligned with Ike Perlmutter, a disgruntled former employee who is one of Disney’s largest independent shareholders. Mr. Perlmutter, who sold Marvel Entertainment to Disney in 2009, was pushed out of the company in March.

Representatives for Mr. Peltz and Mr. Perlmutter did not respond to queries.

“We have to obviously contend with them in some form,” Robert A. Iger, Disney’s chief executive, said about activist investors earlier on Wednesday at the DealBook Summit. “I’m certain that the board will hear them out in terms of what their plans are, what their ideas are.”

Mr. Iger added: “I have a lot to do. I’m not going to get distracted by any of that.”

Last year, Mr. Perlmutter agitated — from his perch inside Disney — for Mr. Peltz to join the board. When he was rebuffed, Mr. Peltz started a proxy battle to put himself on the board, saying he would cut costs, revamp Disney’s streaming business and clean up the company’s messy succession planning. Mr. Peltz withdrew in February when Disney put in place a restructuring plan and cut $5.5 billion in costs. The cost-cutting ended up closer to $7.5 billion.

The pair re-emerged last month. They have been planning a new fight for board seats — the nominating window opens on Tuesday and runs until Jan. 4 — and have cited Disney’s languishing stock price as a reason. Disney shares closed on Wednesday at $92.50, an increase of about 13 percent from early last month but down about 48 percent from a March 2021 high.

Mr. Peltz has also faulted Disney for mishandling succession. After his contract was extended multiple times, Mr. Iger turned the company over to Bob Chapek in 2020. Two chaotic years later, Disney fired Mr. Chapek and reinstated Mr. Iger as chief executive. His current contract expires at the end of 2026, and he has said he will leave the company for good then.

Disney has said “robust” succession planning is underway, with a search extending outside the company.

Another activist investor, ValueAct Capital, has also amassed a large stake in Disney and sees the shares as undervalued. ValueAct, a fund in San Francisco that has taken stakes in companies like Microsoft, Spotify and The New York Times, is known for working with its targets and is not expected to fight for a board seat.

Lauren Hirsch contributed reporting from New York.

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