Disney's board battle heats up as two notable investors back Nelson Peltz

By Emily Bary

CalPERS and Neuberger Berman are supporting Trian director candidates ahead of Wednesday's vote deadline

Two large institutional investors are siding with Nelson Peltz in his proxy battle with Walt Disney Co., which is set for an ultimate showdown later this week.

The California Public Employees' Retirement System (CalPERS) and Neuberger Berman have thrown their support behind Nelson Peltz and fellow Trian Group nominee Jay Rasulo in their bids for seats on Disney's (DIS) board of directors, according to a Trian press release issued Monday. That vote is set to take place April 3.

See more: Disney steels for April 3 shareholder showdown with activist investors

CalPERS said that Disney "will benefit from fresh eyes on its board of directors," according to the Trian release. The public pension fund's "established voting guidelines focus on the need for independent corporate boards, a say in setting executive pay, and increased transparency."

Neuberger Berman said it was "unconvinced of the current board's ability to uphold good governance practices and fulfill one of its core responsibilities in finding a CEO successor." The asset manager also flagged "Peltz's large ownership of the company and extensive board experience and Rasulo's long-term experience while working as an executive at Disney."

Trian beneficially owns more than $3.5 billion worth of Disney's common stock, according to its latest release. CalPERS owns 6.6 million Disney shares worth about $800 million, while Neuberger Berman owns 1.4 million shares worth about $170 million, according to FactSet. Neither CalPERS nor Neuberger Berman is among the top 15 institutional shareholders of Disney listed on FactSet.

Disney didn't respond to a MarketWatch request for comment on the latest support for Trian's nominees.

The battle between Disney and activists continues to heat up, with both sides lining up high-profile endorsements in recent days. Filmmaker George Lucas, JPMorgan Chase & Co. (JPM) Chief Executive Jamie Dimon and ValueAct Capital Co-CEO Mason Morfit were among those backing the media giant's slate of directors, according to a Disney release from last week.

"Putting people on a board unnecessarily can harm a company," Dimon said in that release. "I don't know why shareholders would take that risk, especially given the significant progress the company has made since [Chief Executive Bob Iger] came back."

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Meanwhile, major proxy advisors have been split, with Glass Lewis recommending Disney's director candidates and Institutional Shareholder Services vouching for Peltz - but not Rasulo, the other Trian nominee. Egan-Jones backed both Trian director nominees.

Activist Blackwells Capital is also pushing for a slate of its director nominees at Disney.

-Emily Bary

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04-01-24 0851ET

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