Advisory Firm ISS Backs Nelson Peltz For Disney's Board

(RTTNews) - Proxy advisory firm Institutional Shareholder Services said on Thursday that it recommends Walt Disney (DIS) shareholders to elect activist investor Nelson Peltz to the board.

"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," the ISS stated. "He could also help evaluate future capital allocation decisions".

Even though ISS praised strategic moves implemented by current Disney CEO Bob Iger, it also stressed the need for a change at the management level, citing the entertainment giant's underperformance in recent years and succession issues.

The recommendations come after Peltz's firm Trian Management Fund requested shareholders to nominate him as well as former Disney Chief Financial Officer Jay Rasulo to Disney's board at its annual general meeting on April 3.

Additionally, ISS also recommended withholding a vote for current Disney board member Maria Elena Lagomasino. It further maintained that it would not back Trian's other nominee, Jay Rasulo, by arguing that, "Though we do not have any concerns about his ability to serve as an objective director, we recognize that Rasulo's potential presence might create added friction on the board."

Responding to the influential firm's announcements, Disney said, "We strongly believe that ISS reached the wrong conclusion in its recent report when it comes to adding Nelson Peltz to the board". It added that ISS "fails to acknowledge the diverse set of skills and experience on Disney's board".

Earlier this week, another proxy advisor firm, Glass Lewis, supported Disney's nominees for the board.

Notably, recommendations of Glass Lewis and ISS play a major role in influencing the votes of institutional shareholders.