Egan-Jones Backs Nelson Peltz In Disney Proxy Fight

The advisory firm Egan-Jones is recommending Disney shareholders vote to add Nelson Peltz and Jay Rasulo to the studio’s board of directors.

The firm also backed Peltz’ Trian Partners in recommending shareholders withhold their votes for current Disney board members Michael BG Froman and Maria Elena Lagomasino. That follows Institutional Shareholder Services coming out as the first advisory firm to back Peltz in his proxy fight ahead of Disney shareholder casting votes at the company’s annual meeting on April 3.

“We see very little downside and a lot of upsides in putting the Trian nominees on the board,” Egan-Jones said in a statement on Wednesday. Weighing up Disney’s operating performance, the advisory firm argued the studio has an outdated business model that fails to be “forward looking and flexible enough” to ensure future success.

Peltz, as part of his activist shareholder campaign, is looking to nominate his own board members at Disney to reverse what he argues is the company’s lagging stock performance and to bring about “Netflix-like margins.”

“Dissident nominee Peltz, as a significant shareholder, could be additive to the succession process, providing assurance to other investors that the board is properly engaged this time around. He could also help evaluate future capital allocation decisions,” Egan-Jones added.

Ahead of next week’s annual meeting, Disney has called Peltz’s proxy fight “disruptive and destructive.” Disney’s board has also told shareholders it is continuing with cost-cutting measures, with a target of $7.5 billion in savings by the end of fiscal 2024, and by the fourth quarter of that year the studio expects to reach profitability in its combined streaming TV platforms .