Why Jamie Dimon, Elon Musk, and Bill Ackman took sides in the Disney-Peltz proxy battle

Disney, the entertainment industry’s most iconic storyteller, just survived its own saga with activist investor Nelson Peltz. One aspect of the fight that stood out was its cast of characters.

In what might bring to mind interconnected movie sequels, or standard reality TV fare, the dispute brought out allies and foes, old and new. Tesla (TSLA) CEO Elon Musk threw his support behind the dissenting party, as did hedge fund manager Bill Ackman, a veteran of proxy battles. Meanwhile, JPMorgan (JPM) CEO Jamie Dimon, himself the target of a shareholder campaign a decade ago, backed Iger and the incumbents.

“Disney is one of the best-known consumer brands. And it’s been that way for decades,” said David Kass, a professor of finance at the University of Maryland. That millions of customers are impacted by its moves builds a natural audience for its corporate developments, he said.

Not since Exxon’s (XOM) surprising defeat to an activist investor in 2021 has a boardroom brawl attracted so much interest. A crucial factor driving attention was that the proxy battle actually went to a shareholder vote, which doesn’t happen often. Companies and activists usually settle in advance to avoid costly campaigns and the potential reputational blow of a loss.

But beyond that, Disney’s position as an iconic brand with a well-known, polarizing figure at its helm —CEO Bob Iger — is what drew outsized attention and unexpected personalities into this drama.

“When everyone might have a different view it can strike more popular interest,” said Jun Frank, managing director and global head of compensation and governance advisory at ISS-Corporate, which is distinct from the part of ISS that instructed shareholders to side with Peltz in the proxy fight. “If people have an emotional association with a company, that can lead some to have their own personal stake.”

For some, the emotional association was more direct than for others. Musk appeared to extend his vendetta against Iger after lashing out at him for pausing Disney’s ad spending on X last year.

In a widely covered interview at the New York Times (NYT) DealBook conference in November, Musk went after the Disney CEO specifically and slung an expletive at companies who pulled their advertising from his platform. Musk has since used X to attack Iger and Disney, including calling for Iger’s ouster.

A vocal opponent of diversity initiatives, Musk has also attempted to disparage Disney around culture war issues. “Excited to join @Disney as their Chief DEI Officer. Can’t wait to work with Bob Iger & Kathleen Kennedy to make their content MORE woke!” he joked earlier this week, on April Fools’ day, referring to Disney’s head of LucasFilm.

Ackman joined the fray with his own gripe tying back to his history of proxy fights. In a post on X, he said Peltz would be “greatly additive” to the Disney board. He also called for the Securities and Exchange Commission to investigate supposed leaks to the press about the early vote results, which he contends worked in Disney’s favor.

In the same post, Ackman alleged that in his 2017 contest with ADP, in which he failed to shake up the board, the company or its advisers leaked the early vote count to the media. For Ackman, the “dirty tricks” that damaged his activist campaign were also deployed against Peltz.

Dimon, for his part, endorsed Disney’s sitting board members. He personally vouched for the CEO, perhaps seeing himself in a similar role. Dimon survived his own shareholder vote in 2013, which sought to bar him from serving as both chair and CEO. JPMorgan also served as a defensive adviser to Disney during the proxy battle.

Elon Musk threw his support behind Nelson Peltz’s bid to secure board seats at Disney. (Axelle/Bauer-Griffin/FilmMagic) (Axelle/Bauer-Griffin via Getty Images)

“Putting people on a Board unnecessarily can harm a company,” Dimon said in a statement to Yahoo Finance last month. “I don’t know why shareholders would take that risk, especially given the significant progress the company has made since Bob came back.”

Other big names championed Disney’s cause: filmmaker and “Star Wars” creator George Lucas; the grandchildren of Walt Disney and his brother Roy; and Laurene Powell Jobs, the founder of Emerson Collective and a longtime investor in the company.

The Disney name connects with shareholders and consumers in a way not all brands can. In managing the fates of ESPN, Disney+, and beloved TV and movie characters, Iger is attempting to pull the entertainment giant into the media world’s next era. For audiences at home, that’s a more compelling storyline than, say, the profitability of enterprise software or manufacturing of widgets.

Disney stock has also done really well in a very short time, generating more buzz.

Indeed, a source familiar with the matter told Yahoo Finance’s Alexandra Canal that 75% of retail shareholders voted in favor of Disney’s current board. Disney’s stock is up more than 30% for the year.

Still, the momentous vote highlighted the bullseye that some continue to see on the House of Mouse. Disney shares hit multiyear lows in 2023. The company floundered over a succession plan and struggled with the transition to streaming, all while executives found themselves in a protracted political fight, turning perceptions of the company into another culture war battleground. That there were so many layers to the feud added intrigue to Disney’s proxy fight.

But the idiosyncratic nature of Disney’s proxy battle will likely not change the number of high-profile contests moving forward, said Jim Rossman, global head of shareholder advisory at Barclays. Of the roughly 100 shareholder campaigns that occur every year in the US, more than half target companies with market caps below $10 billion. And most of the disputes end in settlements.

Still, activism is a way for ordinary investors to “get onto the chessboard” and have a real say in how corporations are run, he said, contrasting with an older paradigm that instructed unhappy shareholders to simply sell their stake in an act of disapproval.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.

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