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Ike Perlmutter attempted a shadow Disney board coup over the summer…and it’s not done yet.

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Isaac “Ike” Perlmutter is one of the most controversial figures in the history of comics. A smart, if ruthless businessman, he saved Marvel from bankruptcy proceedings back in 1997, and proceeded to reign over its rebound in the Ultimate era…and its game-changing sale to Disney in 2009 for $4 billion. 

However, he’s also a notorious cheapskate who also believed that action movies couldn’t star women or people of color – and there are also credible reports of homophobia as well. 

Disney’s acquisition of Marvel made Perlmutter one of Disney’s biggest stockholders – if not the biggest – and he proceeded to meddle in Disney’s consumer products division, even going to far as to fire future DC Comics top exec Pam Lifford – who then sued for discrimination and won a settlement. 

In 2015, Ike was ousted from his position at Disney Studios after clashing too much with Kevin Feige and Bob Iger – the latter had lots to say about Ike in his biography, none of it nice.  Ike emerged into the light during the Donald Trump presidency, as part of a “shadow cabinet” that ran the Veteran’s Affair administration – three businessmen who had never been appointed by Congress running a major government department being a highly unusual move. With his frequent Thanksgiving Day dinner companion Trump out, Ike has retired seemingly, although I’m told he still rules over Marvel Comics to some degree. But he’s been out of the loop at Disney Studios for some time. 

But that doesn’t mean he doesn’t want to stage a comeback so he can meddle some more! It’s no secret that Disney has been embattled of late, as the pandemic and streaming slowdowns change business models forever. Chairman Bob Iger has returned from retirement to replace his replacement, Bob Chapek. Now, a new series of filings reveals that Ike has been pushing a member to the Disney Board: 80 year old Nelson Peltz, a former Heinz executive billionaire who Perlmutter has been pushing since the summer – and reading between the lines, its not hard to see Peltz as a front for Perlmutter himself. 

You can read a pretty juicy account of the story from master reporters KIM MASTERS and ALEX WEPRIN at THR that reads like a summary of a sequel to Succession. Because the stakes are so high, the filings from both sides have been unusually detailed, almost down to the timestamp (they are datestamped.)  Because Disney’s stock is so valuable, any missteps could lead to stockholder lawsuits, so Disney’s lawyers are dotting every i and crossing every street only after looking every which way – Disney has very good lawyers. 

Anyway, of the struggle, Masters and Weprin write: 

Peltz and Perlmutter have more in common than their age (Perlmutter is also 80) and Palm Beach addresses. They have shared pursuits in philanthropy and politics, from sending turkeys to the Salvation Army at Thanksgiving to backing Donald Trump’s Oval Office bid. (Peltz publicly apologized for supporting the former president’s re-election after the January 6 assault on the Capitol.) Peltz’s Trian Group declined to comment, as did Perlmutter.

Variety has Disney’s own blow by blow of the Peltz campaign, which goes back to the summer when Perlmutter met with then-Disney head Bob Chapek about his Peltz plan, saying that Peltz’s addition to the board “would help Mr. Chapek counter recent headwinds he had faced, solidify his position as CEO, and preempt any other potential shareholder nominations of director nominees at the 2023 Annual Meeting,” adding that, “without Mr. Peltz there, former executives including Mr. Iger, would be back at Disney.”

Oh the horror! 

Following this initial meeting, Perlmutter kept pushing Peltz, and Peltz kept showing up in meetings saying only he could fix the problems facing Disney. According to one account, the embattled Chapek – who had bungled PR opp after PR opp –   tentatively teamed up with this seemingly friendly face, even going to Florida to meet with Peltz and Perlmutter in their Palm Beach enclave. (Shades of the BBQs Perlmutter threw to try to mend fences with Feige.) Emboldened, Team Peltz began to prepare for a proxy contest to infiltrate the board. But:

Following the Q4 earnings call, Disney says Perlmutter contacted Chapek, McCarthy and Catz to once again voice his support in Peltz joining the board, and Chapek had meetings with both Peltz and Perlmutter, with both expressing their support for Chapek. Disney says Peltz told McCarthy he would run a proxy contest if he was not nominated to the board.

After a special board meeting called to discuss the Peltz-Perlmutter situation on Nov. 17, the Disney board made the decision to terminate Chapek and appoint Iger as CEO and board member. On the heels of the announcement, news broke of Peltz’s $800 million stake and that he was seeking a board seat.

Peltz’s Trian group has continued to try to find a voice on Disney even following the much dread return of Iger. Just over the last two weeks, there was a high level meeting at which Peltz made his pitch.  However, the Disney board seems to have been unimpressed with the pitch, as recounted in their OWN filing:

In deciding not to recommend Mr. Peltz, the directors considered a number of factors, including that despite months of engagement, Mr. Peltz had not, and the Trian Group representatives at the meeting had not, actually presented a single strategic idea for Disney, that their assessment of Disney seemed oblivious to the secular change that had been ongoing in the media industry, as well as the impact of the pandemic on each part of the Company’s business from production, to exhibition, to leisure travel.

911, I’d like to report a murder – and make sure you bring your own shovel to this total burial! But it goes on and on! 

The Board also considered that Mr. Peltz’s experience, as recounted in his own presentation, was primarily in commodity consumer packaged goods businesses and not the media or technology sector nor any other industry that is driven by creative talent or creating unique customer experiences. The Board considered the many changes Mr. Iger was implementing, Mr. Iger’s deep knowledge of the media industry and track record of having transformed Disney through the acquisitions of Pixar, Marvel and Lucasfilm, the ongoing imperative to continue to realize the benefits of the Fox acquisition, whose prospects had been delayed by the pandemic impact, and concern about disruption to Mr. Iger and the management team at a crucial juncture for the Company if Mr. Peltz were added to the Board. Among the drivers for such concern was the combination of Mr. Peltz’s lack of media or technology industry experience coupled with his repeated focus in his presentation on successful approaches from businesses like Heinz, Procter & Gamble and DuPont which have little in common with Disney. In determining to recommend the nominees in the Board’s slate, the Board considered, among other factors, the ability of the prospective nominees to represent the interests of the shareholders of the Company, the extent to which the prospective nominees contribute to the range of talent, skill and expertise appropriate for the Board and the extent to which the prospective nominees help the Board reflect the diversity of the Company’s shareholders, employees, customers and guests and the communities in which it operates.

In case you aren’t keeping score let’s recap:

Bob Iger: acquired Pixar, Marvel and Lucasfilms, the three biggest IP factories of this century, sending Disney stock soaring over the last 15 years or so. 

Nelson Peltz: Made ketchup bottles

Now, you can read the blow by blow account from Peltz’s viewpoint in this SEC preliminary proxy filing. The filing, significantly, make no mention of Ike Perlmutter, but does splash a lot of camouflaging tea about Disney’s current problems:

The Trian Group believes that Disney’s recent performance reflects the hard truth that it is a company in crisis with many challenges weighing on investor sentiment. While we acknowledge that Disney, like many media companies, is undergoing a challenging pivot to streaming, Disney also benefits from owning best-in-class IP, a more diversified business mix, and a Parks business that is enjoying all-time high profitability. As such, we believe that the Company’s current problems are primarily selfinflicted and need to be addressed immediately, including: POOR Corporate Governance · Failed succession planning · “Over-the-top” compensation practices · Minimal shareholder engagement, including an apparent unwillingness to fully engage constructively with the Trian Group POOR Strategy & Operations · Flawed Direct-to-Consumer (“DTC having a significant IP advantage · Lack of overall cost discipline ”) strategy struggling with profitability, despite reaching similar revenues as Netflix and · Overearning in the Parks business to subsidize streaming losses POOR Capital Allocation · Since 2018, Disney’s EPS has been cut in half despite $162bn spent on mergers and acquisitions (“M&A expenditures (“Capex ”), capital ”) and content – approximately equal to Disney’s entire current market capitalization[4] · Management, in the Trian Group’s view, has shown poor judgment on recent M&A efforts including overpaying for the 21st Century Fox assets and bidding aggressively for Sky plc · Increased financial leverage and deteriorating cash flow resulting in the elimination of the dividend that had been paid for 50+ years, even as COVID receded and Parks profitability surpassed historical levels

As Masters point out, the entire Peltz pitch to other shareholders seems to be “Disney needs to spend less money” – something they are already in the process of doing. And by offering no concrete ideas for doing this, the current board could just sit there and scoff at the wannabe. 

However, this ain’t over. More board meetings, and more shareholder votes loom, and Peltz has not given up on his campaign to have a seat on the board. And who knows how much Ike is spurring him on? Or how much Ike would run Disney if his man does get a seat?

I do know one thing, Bob Iger and Ike Perlmutter can’t stand each other, and they are going to keep battling until one of them is in the grave. 

TLDR: keep that popcorn handy!  

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