Disney is restoring dividends, amending its bylaws as Nelson Peltz deadline approaches

Disney today announced a cash dividend of $0.30 per share for the second half of its 2023 fiscal year, the first such dividend since the dividend was halted three years ago during the COVID crisis.

It will be paid on January 10, 2024 to shareholders of record at the close of business on December 11. The company had said back in February that it planned to reinstate dividends this year.

“This has been a year of significant progress for The Walt Disney Company, defined by strategic restructuring and a renewed focus on long-term growth,” said Mark Parker, Chairman of the Board of Directors. “As Disney moves forward with its key strategic objectives, we are pleased to announce a dividend to our shareholders as we continue to invest in the future of the company and prioritize creating meaningful value.”

The dividend move comes as activist investor Nelson Peltz, backed by major Disney shareholders and former Marvel chief Ike Perlmutter, seeks to join the media giant’s board – saying today he will take the fight “directly to shareholders” after Disney rejected his decision. offer and appoint new managers instead. This push by founder Trian Partners led Disney to rewrite and amend its corporate bylaws dealing with outside candidates seeking seats on the board.

Shareholders elect members of the board of directors at the company’s annual meeting. Corporations list their nominated directors in a proxy statement before the meeting and provide shareholders with a list of the names on the proxy cards. Shareholders could also put forward other outside candidates for director, not approved by the company, as Peltz says he intends to do. It is not clear how many board seats he is seeking. Disney’s fiscal year ends in September, and its annual meeting is usually held sometime in March. It was held later in the year, on April 3, where the company encountered Peltz for the first time in the early part of the year. He withdrew from the fight in February before the meeting. Before that, he created a dedicated website called Restore the Magic which detailed what he saw as Disney’s failures. It is not yet clear what he will do this time.

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The amendments Disney made in today’s SEC filing do the following:

– “Addresses the recently adopted amendments to Rule 14a-19 under the Securities Exchange Act of 1934, as amended, by requiring any person requesting proxies in support of a director nominee other than the board nominees to make a representation that such person will comply with Rule 14a-19 and to provide Reasonable evidence by the company that the requirements of Rule 14a-19 are met.”

This Rule (14a-19) requires a party to use a “global” proxy card that lists all director nominees submitted by both management and stockholders for election at the annual meeting. It establishes new notice and filing requirements for requesting parties and formatting and display requirements for global proxy cards. This requires shareholders to submit their nominees to their directors in the competition to obtain at least 67 percent of the voting power of the shares entitled to vote in the election. This could be expensive for many and will not deter billionaire Peltz.

– “Requiring anyone directly or indirectly requesting agents using their agent card to use a color of agent card other than white.” (The white card is usually used by management.)

– “Strengthen procedural mechanisms and disclosure requirements relating to business proposals submitted and director nominations made by shareholders, including by requiring: certain additional background information, disclosures and representations relating to any proposed shareholders, any proposed director nominees, the business and any other persons associated with the proxy solicitation.” of shareholders; any notification of a director nomination shall be accompanied by all written questionnaires required of directors of the Company completed and signed by any proposed directors candidates.

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More is coming…

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