Disney, the global entertainment conglomerate, has recently declared its first cash dividend since 2020. The dividend payout of $0.30 per share for the second half of fiscal 2023 marks a significant milestone for the company, as it signals a return to normalcy after the dividend was halted three years ago during the Covid-19 pandemic.
The dividend is scheduled to be paid on January 10, 2024, to shareholders of record by December 11. This move aligns with Disney’s previous announcement of its plan to reinstate the dividend this year. Mark Parker, Chairman of the Board, emphasized the company’s progress and its unwavering focus on long-term growth.
However, amidst this positive news, an activist investor named Nelson Peltz, with support from former Marvel boss Ike Perlmutter, has been pushing for a seat on Disney’s board. Peltz intends to bring the fight directly to the shareholders after Disney rejected his offer and appointed two new directors. In response, Disney has made amendments to its corporate bylaws to address outside candidates seeking board seats.
The company filed amendments with the Securities and Exchange Commission (SEC) to address Rule 14a-19, which requires the use of a “universal” proxy card listing all director nominees. Several companies, including Disney, have been amending their bylaws to make it more challenging for outside shareholder candidates to be included on the ballot. Additionally, the amendments specify that soliciting parties using their own proxy card must use a color other than white. Furthermore, procedural mechanics and disclosure requirements for director nominations made by stockholders are enhanced, including additional background information and disclosures.
In summary, Disney’s announcement of a cash dividend is a positive sign of its strategic restructuring and unwavering focus on long-term growth. However, the company is facing opposition from activist investor Nelson Peltz, who is determined to secure a board seat. Disney’s amendments to its corporate bylaws in response to this challenge reflect the company’s efforts to maintain control over its board composition. As the situation unfolds, it remains to be seen how Disney will address the activist investor’s demands and whether Peltz will ultimately succeed in joining the board.
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