Disney’s Stock: For A Decade, It’s
Been a Losing Proposition
Disney’s Stock: For A Decade, It’s Been a Losing Proposition
During the ten years leading up to October 6, 2023 (the trading day prior to Trian resurfacing), there were 2,519 trading days. If a Disney shareholder bought stock on 93% of those days, their shares would be worth less than they paid.
Trian intends to work with Management and the Board to help drive Disney’s outperformance with tangible targets, goals, and true accountability:
Disney’s Current Path
Trian’s Goals & Initial Perspectives
Corporate Governance
Preserve as much of the status quo as possible by playing defense – evidenced by limited changes to compensation and succession processes
Adopt best-in-class governance; finally complete a successful CEO succession; and align management pay with performance
Streaming Profitability
“Double-digit margins” – no commitment to a specific target or timetable for achieving the target
Target and achieve Netflix-like margins of 15-20% by FY 2027
Future of ESPN
“Building ESPN into the preeminent digital sports platform” – lacking a tangible business plan or defined cost to shareholders
Commit to a reasonable, defined payback period and return profile on ESPN Flagship DTC and communicate it in detail prior to launch
Studio Creativity
“Improving the output and economics of our film studios”
Board-led review of creative processes and structure to restore leadership accountability and reclaim #1 box office position w/ leading economics
Parks and Experiences Growth
“Strategically investing in our Experiences business to turbocharge growth”
Execute on a clear vision for Parks targeting at least high-single digit operating income growth to ensure adequate returns on ~$60bn of capex
By Disney’s Own Standards, Peltz & Rasulo Have More Skills Central to Disney’s Strategy Than Lagomasino & Froman
Disney’s Director Skills and Performance Matrix
From Disney’s 2024 Proxy Statement
Vote Today
Vote today FOR Trian Nominees, Nelson Peltz and Jay Rasulo and WITHHOLD on Disney Nominees, Maria Elena Lagomasino, Michael B.G. Froman and All 3 Blackwells Nominees.
Board Candidate
Nelson Peltz brings an ownership mentality and track record of long-term value creation.4
Board Candidate
Jay Rasulo is a Disney veteran who spent three decades at the Company in a variety of roles, including five years as Chief Financial Officer.
Source 1: FactSet as of 10/06/23. Note: Assumes shares are held from purchase date applying each respective closing price through 10/06/23. 10/06/23 represents the trading day prior to the WSJ article titled “Nelson Peltz Boosts Disney Stake, Seeks Board Seats” by Lauren Thomas and Robbie Whelan reporting on Trian’s increased beneficial ownership in Disney shares and expected request for Board representation.
Source 2: Company filings and transcripts. Note: All quotes sourced from Disney’s FQ4’23 earnings presentation and call transcript.
Source 3: For instance, at The Procter & Gamble Company (“P&G”), a household products company where Mr. Peltz served on the board of directors from 2018 until 2022, he helped P&G develop and oversee a “Four-Year Overhaul” that resulted in P&G “making several dramatic changes to help improve performance” and “streamlin[ing] its operations from 10 business units to six, improv[ing] its earnings growth, clear[ing] out bureaucracy and increas[ing] accountability.” (Source: Article titled “Peltz to Depart P&G Board, Capping Nearly Four-Year Overhaul,” published August 5, 2021 by Bloomberg.) At Mondelēz International, an international snack company, during Mr. Peltz’s tenure on the board of directors from 2014 to 2018, the company improved its cash flow generation through margin improvement and development of working capital efficiencies. (Source: SEC filings. In 2014, operating income margins were 11.7% and improved to 16.7% in 2018. Cash flow from operations were $3.56 billion in 2014 and improved to $3.95 billion in 2018.)
Source 4: Source 6: For instance, at The Procter & Gamble Company (“P&G”), a household products company where Mr. Peltz served on the board of directors from 2018 until 2022, he helped P&G develop and oversee a “Four-Year Overhaul” that resulted in P&G “making several dramatic changes to help improve performance” and “streamlin[ing] its operations from 10 business units to six, improv[ing] its earnings growth, clear[ing] out bureaucracy and increas[ing] accountability.” (Source: Article titled “Peltz to Depart P&G Board, Capping Nearly Four-Year Overhaul,” published August 5, 2021 by Bloomberg.) At Mondelēz International, an international snack company, during Mr. Peltz’s tenure on the board of directors from 2014 to 2018, the company improved its cash flow generation through margin improvement and development of working capital efficiencies. (Source: SEC filings. In 2014, operating income margins were 11.7% and improved to 16.7% in 2018. Cash flow from operations were $3.56 billion in 2014 and improved to $3.95 billion in 2018.)