A years-long stand-off between a billionaire and a celebrity chief executive over the future of Disney has finally come to an end.
The Mouse House has existed for a century but is under pressure over its movie flops, unprofitable streaming service and uncertainty over the future of its legacy television businesses.
One of the most recognisable companies in the world also has a succession problem after coaxing its 71-year-old chief executive, Bob Iger, out of retirement.
Enter activist investor Nelson Peltz.
The 81-year-old American billionaire has been critical of the direction of the company since buying up stocks and launching two separate bids for two seats on the board.
The crux of his disapproval was that Disney had lost its magic and could be making more money from its content and services.
Peltz argued he was the man to make that happen quickly and has been campaigning for influence in the boardroom.
But Iger had other ideas and fought tooth and nail to keep the billionaire out, reportedly investing millions in one of the most expensive proxy battles in history.
The tension between Disney, Peltz and another challenger spilled over on Wednesday (local time) in a final showdown with investors.
Shareholders were asked to decide at the company's annual general meeting who would sit on the company's board of directors.
The choice was between three competing board slates: re-electing the current members or appointing nominees from two proxy contenders.
Peltz's Trian Partners put forward two picks, while another investor, Blackwells Capital, suggested three other nominees.
The verdict in the high-profile battle soon became clear as investors voted to maintain the status quo. Disney's challengers were thwarted and it appears all 12 of the company-backed board members were re-elected.
But analysts warn that while Disney has "vanquished" Peltz, he'll likely maintain a noisy scrutiny of the Magic Kingdom.
The misunderstood 'bully billionaire'
Peltz is an activist investor famous for courting controversy. Like another famous businessman, Donald Trump, the billionaire lives in Palm Beach, Florida, and has built a brand around his professional acumen.
While the former president made his mark in real estate, Peltz gravitates towards poor performing companies, accumulating stock before pushing for changes that inflate the value and then walking away with a tidy sum.
Peltz has had some notable successes following this playbook in recent decades.
In 2006, the billionaire faced scrutiny after setting his sights on Heinz, the food processing company which has become a household name.
Back then, the future of the meal producer was far from secure and the billionaire investor believed he could help get the business back on track.
As is custom in the business world, negotiations took place over a lavish meal.
Peltz invited Heinz chief executive Bill Johnson to a steak restaurant and bluntly told him he was going to be on the board.
The billionaire laid out his plans to fix the company, which included scrapping ketchup packets and a proposal to vastly expand the marketing budget.
"We disagreed," Johnson later recalled to CNN Monday.
"It wasn't a cordial meeting."
But 11 months later, Peltz won over his critics at Heinz after the value of the stock jumped 34 per cent.
"He's been a positive force at Heinz," the company's lead director, Tom Usher, concluded.
Peltz has been involved with other high-profile brands such as Unilever and chemical company Dupont and was once considered to be the most influential person in global corporate governance.
But there is some unease about the efficacy of activist investors like him, with research finding that excess returns delivered after their campaigns were short-lived and typically turned negative after six months.
"Peltz is an unusual character because what he's doing is going around to multiple companies and saying ‘I'm going to fix the show,'" says senior media entertainment analyst Gareth Sutcliffe from Enders Analysis.
"But the key point is an activist investor is only as good as the questions that they are asking of the board.
"And I think that the key point is that you want to have nominees who clearly have a background and experience and are helpful in terms of moving a company forward to the next stage."
Peltz for his part hasn't just made waves in the business world.
When his daughter Nicola Peltz married Brooklyn Beckham in a lavish three-day ceremony dubbed the "wedding of the century", the billionaire sued their wedding planners alleging they failed to pay back a $159,000 (AUD $225,500) deposit after they were let go.
This uncompromising approach has earned him the moniker the "bully billionaire", a description the businessman admits is "probably true".
"What sense is being a billionaire if you're not a bully?" he told the Financial Times.
But the activist investor has also suggested he's misunderstood, preferring to be compared to the likes of Warren Buffet and lamenting labels that paint him as a provocateur or corporate raider.
"He's like the uninvited guest who crashes a dinner party," Charles Elson, a former director of the John L Weinberg Center for Corporate Governance at the University of Delaware, told the New York Times.
"No matter how charming, he's not going to be welcome."
For years now, Peltz has been focused on obtaining the keys to the Magic Kingdom.
His pitch to shareholders this week was simple: "Together, we can restore the magic at Disney".
But the Mouse House wasn't keen on letting an intruder inside.
The battle for Disney
In January 2023, Peltz's company Trian Partners officially made its move on Disney's management after unveiling a $US2.5 billion stake in the company.
There are 12 seats on the board, which is made up of powerful and influential businessmen and women who make decisions about the future direction of the business.
"Disney is such a crown jewel of a company … it holds such an important place in the American cultural [sphere], and is a global cultural phenomenon," Mr Sutcliffe said.
"And frankly, I think that the key thing is that all of the parties involved want Disney to succeed. But clearly there is always an element of desire around being in the thick of it in Hollywood."
Peltz, as part of his initial bid for a seat, criticised Disney's expensive acquisition of 21st Century Fox in 2017, as well as its compensation practices and slim profit margins.
At the same time, Disney was also recovering from a botched succession plan, which saw Iger's successor, Bob Chapek, fired after less than three years in the role and the former chief executive return to the top job.
"It was a general view that Disney's performance was poor. [But] Disney was able to kind of staunch [Peltz's bid]," Mr Sutcliffe said.
Peltz called off his campaign a month later after Iger unveiled an extensive cost-cutting plan, shaking up the company's structure as well as its slate of films and television shows and the pricing of its video services.
But what prompted the activist investor to return to the battle appears to have been a desire for Disney to move faster in turning around its profit.
"You cannot underestimate the level of interest there is in a company like Disney and the fact that people always think that they have the best ideas," Mr Sutcliffe said.
The company is still facing a huge set of challenges, including how to transition into a modern media company and turn a profit on its streaming service.
In November, Peltz launched a second activist campaign against Disney, again pushing for seats on the board and alleging shareholders had lost $US70 billion in value since February.
His hedge fund told shareholders that "Disney has lost its way", having been "late to enter the streaming business", fallen from its top position at the box office and "doubled down on linear TV at the wrong time".
"As a result, financial performance has deteriorated, with earnings per share, free cash flow, operating income and many other key metrics lower than they were five years ago," Trian wrote.
It argued Disney needed new independent directors "who have a shareholder mindset, deep and relevant experience and a sense of urgency" and believed Peltz and ex-Disney executive Jay Rasulo were the best men for the job.
Trian had the backing of Elon Musk but Disney's shareholders didn't share Peltz's vision, voting to keep him out of the boardroom.
The celebrity CEO with a succession problem
Iger had called the activist campaigns from Peltz and others a "distraction" in the lead up to Wednesday's vote.
The celebrity chief executive is universally respected for his stewardship of Disney, having overseen some of its most successful acquisitions, including Pixar, Marvel and Lucasfilm.
But the businessman has drawn some criticism in the past over the size of his "insane" pay packet.
"When he [Bob Iger] got his bonus [in 2018], I did the math and I figured out that he could have given personally, out of pocket, a 15-per-cent raise to everyone who worked at Disneyland and still walked away with $10 million," Abigail Disney said in 2019.
"So there's a point at which there's just too much going around the top of the system into the class of people who … have too much money. There is such a thing."
But in recent months, even Walt and Roy Disney's heirs have aligned with Iger and the board in the proxy contest to keep Peltz out.
"The fact that Disney was able to call on all the support from all of these various factions that have previously been critical, it was actually a reflection of Peltz more than anything else," Mr Sutcliffe said.
Since the activist investor launched his bid, Disney had poured vast sums of money into its campaign to woo shareholders with huge advertisements and celebrity endorsements.
Filmmaker George Lucas, JPMorgan Chase chief Jamie Dimon and billionaire philanthropist Laurene Powell Jobs have all featured in the line up alongside Frozen characters Ana and Elsa.
The company also attempted to address some of Peltz's criticisms, with staff reportedly dialling investors in the lead up to the vote to tell them a transformation is underway.
"Iger has already taken decisive steps to realign content creation and distribution, and reposition Disney's streaming platforms and linear broadcast and cable networks for enhanced profitability for the company," Disney said in a statement in January.
A month later, the company delivered better than expected first quarter earnings and an assortment of new initiatives, including a lucrative deal to air Taylor Swift's Eras' tour on its streaming service.
Another feather in Disney's cap was the board's experience and some investor uncertainty over Peltz's ability to save the business given his lack of expertise in the entertainment space.
But one key issue continued to haunt Disney: its succession problem.
When Iger retired in 2021, his hand-picked successor was supposed to be ready to steer the company into a new future.
But as the fallout of the COVID pandemic was being felt around the world, Chapek's time at the top was cut short and Iger was brought back to get the company back on track again.
It's not clear who will take over once Iger retires and the vote on Wednesday was seen by some observers as a referendum on the question of who would be his successor.
Who will take over?
Disney reportedly spent $US40 million on its campaign to stop Peltz from securing a seat on the board, one of the priciest corporate showdowns in American history.
With that fight over, Iger says he will now focus on growing Disney and overseeing its transition.
"Now that this distracting proxy contest is behind us, we're eager to focus 100 per cent of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers."
Attention will also likely shift to the thorny issue of who will lead once he is gone.
"There will be other shareholders who will comment because at the moment, we are clearly in a [race against] the clock in terms of identifying who the next candidate will be to become CEO," Mr Sutcliffe said.
Iger's contract runs to 2026, when he is expected to step down. But the chief executive has delayed his succession plans before, having repeatedly extended his contract during the 2010s.
In the meantime, the Disney board is working on a plan to whittle down the list of potential successors.
Analysts say four internal candidates are currently being put forward as the top contenders, though there are still questions about the timing of when they will take the reigns.
"The level of transition that Disney is currently undergoing, it seems unlikely that Iger will be able to say mission accomplished by the time his contract expires in 2026," Mr Sutcliffe said.
As he attempts to tackle the various challenges to Disney's business model, he'll continue to face intense scrutiny from his critics.
"[Peltz is] still very noisy. I am sure that there will be a continued range of statements that come from Trian [and] from Peltz about this," Mr Sutcliffe said.
As for the activist billionaire, he claims the outcome of the battle has been positive, having delivered some of the changes he was looking for.
