A key question hanging over Disney as it battles a challenge from activist investor Nelson Peltz concerns how many of its shares are held by one of the company’s own employees: Marvel chair Isaac Perlmutter.
Perlmutter, the main backer of Peltz’s push to gain a seat on the Disney board, became the company’s second-largest individual shareholder in 2009 when he sold Marvel to Disney in a cash and stock deal worth $4.2bn. At the time only Steve Jobs held more shares, which he acquired after selling Pixar to Disney.
It is unclear how much stock the reclusive Perlmutter, who technically reports to chief executive Bob Iger, still holds. Assuming Perlmutter has not added or sold Disney shares since the Marvel deal closed, his stake would be worth $2.4bn, around 1 per cent of the company, according to FT calculations. Only investors with 5 per cent stakes or more have to disclose their holdings.
The size of Perlmutter’s stake matters because a large holding could tip the scale in favour of Peltz’s Trian Partners if the proxy battle is as close as some of the firm’s past fights.
Peltz, who acquired a $900mn stake in Disney last year, is known for his activist campaigns against big consumer products groups, including Procter & Gamble in 2017. In that proxy fight, both sides spent more than $100mn to woo shareholders, with Peltz winning by a paper-thin margin of 0.002 per cent.
Other significant individual shareholders at Disney include Jobs’s widow, Laurene Powell Jobs, and Lucasfilm’s George Lucas. Disney hopes they will vote against Peltz’s move to gain a board seat.
Having an employee support an activist challenge to a large corporation is “definitely a unique situation”, said Drew Chapman, chair of the shareholder activism department at Cole Schotz, a law firm. “It appears that Peltz started looking at Disney because of his relationship with Perlmutter.”
He added that big individual shareholders help each side in a proxy contest to build support. “Disney, more so than other companies, has a large retail investor base which has its own challenges to building support. Having prominent large shareholders starts to help build the numbers.”
Peltz’s activist campaign has become a distraction for Iger, who returned to Disney as chief executive in November with a mandate to revive the company and its sagging share price. Iger is expected to discuss restructuring and cost-cutting plans when the company reports results on February 8, Wall Street analysts say.
Iger had a tense relationship with Perlmutter during his first stint as chief executive, so much so that Iger often delegated communications with Perlmutter to Bob Chapek, according to former employees. Chapek served as chief executive for 33 months before Iger returned.
Perlmutter is said to have been outraged when Iger reorganised Marvel in 2015 to allow film producer Kevin Feige to report to the head of the Disney studio, not Perlmutter — a move analysts say has proved to be wise. Since then, Feige has been named Marvel president and overseen the release of some of the highest-grossing movies of all time, including Avengers: Endgame and Black Panther.
Peltz and Perlmutter began seeking changes at Disney months before Iger’s return as chief executive. According to documents that Disney filed with the US Securities and Exchange Commission, Perlmutter called Disney board member Safra Catz and general counsel Horacio Gutierrez last July to advocate for Peltz’s board seat. He met Chapek in Palm Beach, Florida, not long before his dismissal as chief executive to lobby on behalf of Peltz.
Perlmutter and Peltz, both octogenarian billionaires, are friends and live in Palm Beach. Their foundations have jointly donated to the local Salvation Army, and both were Trump donors, though Peltz said he regretted his donation after the January 6 2021 riot in Washington.
In his book, Iger described Perlmutter as “a legendarily tough, reclusive character” and as having a reputation for being “penurious to the extreme”. But while he acknowledged having “disagreements” with Perlmutter, he “respected where he’d come from in his life”.
Perlmutter served in the Israeli army in the six-day war of 1967 before moving to the US, where his first job involved standing outside Jewish cemeteries in Brooklyn and being paid by grieving families to lead funeral services. He began selling surplus goods and in the 1980s discovered he had a knack for investing in distressed companies — including Marvel.
Following Disney’s acquisition of Marvel, Perlmutter’s brusque style and strong opinions often put him at odds with colleagues, the FT reported in 2012. A female employee alleged that Perlmutter said he had a “bullet with [her] name on it” after a disagreement about an email. A racial remark allegedly made by Perlmutter was also relayed to senior Disney managers, the FT reported.
In a sign of the closeness of their relationship, Perlmutter attended the wedding of Peltz’s daughter last April, resulting in a rare photograph of the Marvel chief. (Perlmutter is so publicity-shy that he attended the 2009 premier of Iron Man in full disguise.) Also in the wedding photo are Peltz and CNBC host Jim Cramer, who was frequently critical of Disney management last year and in November led an on-air crusade for Chapek to be fired.
On Thursday, Trian issued a statement recommending that Disney shareholders replace board member Michael Froman, the former US trade representative, with Peltz. Trian said Froman had “overseen weak corporate governance at the company” and that Peltz would bring “a shareowner mentality to the boardroom”.
In response, Disney said it did not endorse Peltz or his son Matthew, who is running as an alternate. Such a move, the company said, would “threaten the strategic management of Disney during a period of important change in the media landscape”.
Some Wall Street analysts say they do not expect Peltz’s push for a board seat to succeed. Iger remains popular among investors, said Jason Bazinet, an analyst at Citi.
“I’d be shocked if a lot of people voted with Peltz,” Bazinet said. “There’s so much goodwill that Iger has with institutional investors that I would be stunned if they back an activist and slap Iger across the face.”