Blackwells Capital LLC (together with its affiliates, “Blackwells”
or “we”) today issued a letter to fellow shareholders regarding the
need for boardroom enhancement at The Walt Disney Company (NYSE:
DIS).
We invite all shareholders to learn more about
our nominees and mission at www.TheFutureOfDisney.com.
The full letter to shareholders follows:
Dear Fellow Disney Shareholder:
As you may know, on January 3, 2024, The Walt
Disney Company (“Disney” or the “Company”) issued a press release
announcing an “Information-Sharing Arrangement” between the Company
and ValueAct Capital Management, L.P. (“ValueAct”). The press
release contained a glowing endorsement by ValueAct of Disney’s
board of directors (the “Board”) and management of Disney.
The Board has repeatedly trumpeted ValueAct’s
endorsement in proxy materials mailed to millions of shareholders,
press releases, letters to shareholders, one-off engagements with
shareholders, and in a recent presentation delivered to proxy
advisory firm, Institutional Shareholder Services (“ISS”).
1
Blackwells diligence revealed that the Board
failed to disclose in the press release that ValueAct or its
affiliates have been managing over $350 million of
Disney’s pension fund assets, and that ValueAct has been earning
fees ranging from approximately $55 million to $95 million for the
services provided to Disney’s pension fund since as early as
2013.2
ValueAct’s management of Disney’s pension funds
is not disclosed anywhere in any of the referenced communications.
Meanwhile, Disney’s entire shareholder franchise population has
been led to believe that ValueAct provided its independent and
unqualified support of the Board independently.
We believe shareholders should consider the
following:
- Can this Board believe that
shareholders are able to evaluate the significance of ValueAct’s
endorsement without a full understanding of the relationship?
- Did the Board know about ValueAct’s
management of Disney’s pension funds prior to authorizing the
January 3rd press release?
- If yes, how could they hide this
information from shareholders?
- Did the Audit Committee of the
Board review this matter in advance?
- How could the Board not know of
this relationship when their own investor presentation dated March
11, 2024, mentions Trian’s identical role in managing Disney
pension fund assets?
- Why didn’t ValueAct and its
principal, Mason Morfit, insist on disclosing ValueAct’s management
of Disney’s pension funds in the January 3 press release—when, as
fiduciaries to these funds, they certainly knew about these facts?
- Why didn’t Mr. Morfit mention these
important facts in his presentation in support of the Board in
front of hundreds of attendees at the Council of Institutional
Investors conference last week?
- Did the Board violate Disney’s Code
of Ethics3 and commitment to transparency4 by failing to disclose
ValueAct’s management of Disney’s pension funds after publicly
accepting ValueAct’s endorsement?
On numerous occasions, Blackwells has publicly
demanded disclosure of Disney’s relationship with ValueAct,
including the release of the Information-Sharing Agreement. On
February 16, 2024, Blackwells submitted a formal demand under
Delaware law that this information be made available to
Blackwells.5 The Board denied our demand, asserting that we had not
explained sufficiently our reasons to believe the Company’s
relationship with ValueAct might be important.6
The Information-Sharing Agreement, the
information shared under it, and details of the pre-existing, and
current, Disney/ValueAct relationship on long standing is material
information for shareholders. Blackwells’ diligence is proof
positive that these disclosures must be made immediately.
We urge fellow shareholders to join us in
demanding that the Board immediately take all necessary steps to
file updated proxy materials with full disclosure of the ValueAct
arrangement—so that shareholders can have the information needed to
cast votes that are fully informed.
Blackwells has nominated three incredibly
qualified nominees for election at Disney’s 2024 annual meeting of
shareholders (the “Annual Meeting”): Craig Hatkoff, Jessica Schell
and Leah Solivan. Our nominees add expertise in the
needed areas of content, media, technology and best in class
governance.
For more information about our campaign,
including our thoughts on improving governance such that Disney
will limit future issues like the ValueAct one, please visit
www.TheFutureOfDisney.com.
Sincerely,
Jason Aintabi
Chief Investment Officer
Blackwells Capital LLC
To learn more about Blackwells’ three nominees
Jessica Schell, Craig Hatkoff and Leah Solivan, fellow Disney
shareholders are encouraged to visit www.TheFutureOfDisney.com.
Blackwells campaign website includes materials for shareholders to
evaluate and help make the most informed voting decisions
possible.
Please vote your proxy today on the
GREEN universal proxy card “FOR” each of the Blackwells nominees
and the Blackwells proposal.
If you have any questions about voting
your proxy or need replacement proxy materials,
contact:
Morrow Sodali LLC+1 (800) 662-5200 (toll-free for
shareholders)+1 (203) 658-9400 (call collect for banks, brokers,
trustees and other nominees)Blackwells@morrowsodali.com
About Blackwells Capital
Blackwells Capital was founded in 2016 by Jason
Aintabi, its Chief Investment Officer. Since that time, it has made
investments in public securities, engaging with management and
boards, both publicly and privately, to help unlock value for
stakeholders, including shareholders, employees and communities.
Throughout their careers, Blackwells’ principals have invested
globally on behalf of leading public and private equity firms and
have held operating roles and served on the boards of media,
energy, technology, insurance and real estate enterprises. For more
information, please visit www.blackwellscap.com.
Contacts
Media:Gagnier CommunicationsDan Gagnier &
Riyaz Lalani646-569-5897blackwells@gagnierfc.com
Shareholders:Morrow SodaliMichael Verrechia
& William Dooley(800) 662-5200blackwells@morrowsodali.com
IMPORTANT ADDITIONAL
INFORMATION
Blackwells Onshore I LLC, Blackwells Capital
LLC, Jason Aintabi, Craig Hatkoff, Jessica Schell and Leah Solivan
(collectively, the “Participants”) are participants in the
solicitation of proxies from the shareholders of The Walt Disney
Company (the “Company”) for the 2024 Annual Meeting of
Shareholders. On February 6, 2024, the Participants filed with the
U.S. Securities and Exchange Commission (the “SEC”) their
definitive proxy statement and accompanying GREEN
Proxy Card in connection with their solicitation of proxies from
the shareholders of the Company for the 2024 Annual Meeting of
Shareholders. ALL SHAREHOLDERS OF THE COMPANY ARE ADVISED
TO READ THE DEFINITIVE PROXY STATEMENT, THE ACCOMPANYING GREEN
PROXY CARD AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF
PROXIES BY THE PARTICIPANTS, AS THEY CONTAIN IMPORTANT INFORMATION,
INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS AND
THEIR DIRECT OR INDIRECT INTERESTS IN THE COMPANY, BY SECURITY
HOLDINGS OR OTHERWISE.
The definitive proxy statement and an
accompanying GREEN proxy card will be furnished to
some or all of the Company’s shareholders and is, along with other
relevant documents, publicly available at no charge on the SEC’s
website at http://www.sec.gov/. In addition, the Participants will
provide copies of the definitive proxy statement without charge,
when available, upon request. Requests for copies should be
directed to Blackwells Onshore I LLC.
1 See, e.g., soliciting materials filed on
DEFA14 by Disney with the Securities Exchange Commission on March
11, 2024, February 14, 2024, February 12, 2024, February 5, 2024,
February 1, 2024. 2 See, Schedule C to Form 5500 of The Walt Disney
Company Retirement Plan Master Trust for fiscal years 2013 through
2022. In each year beginning in 2013, ValueAct (and/or its
affiliates) has been disclosed as an entity receiving compensation
in connection with services to the plan on Schedule C of The Walt
Disney Company Retirement Plan Master Trust’s Form 5500.3 See, The
Walt Disney Company, Code of Business Conduct and Ethics For
Directors at page 1. “Directors must avoid conflicts of interest.
…[for example] (iv) accepting, or having a member of a Director’s
immediate family accept, a gift from persons or entities that deal
with the Company, in cases where the gift is being made in order to
influence the Directors’ actions as a member of the Board, or where
acceptance of the gift could otherwise reasonably create the
appearance of a conflict of interest.”4 See, The Walt Disney
Company Standards of Business Conduct at page 14. “Our policies are
designed to…promote transparency—we don’t engage in any activity
that would compromise our professional judgment or suggest
favorable or preferential treatment.”5 See, Blackwells’ Demand to
The Walt Disney Company under Section 220 of the Delaware General
Corporation Law, dated February 16, 2024, available at
https://thefutureofdisney.com/wp-content/uploads/2024/03/Blackwells-DIS-ValueAct-220-Demand.pdf.
6 See, The Walt Disney Company’s Response Letter, dated February
26, 2024, available at
https://thefutureofdisney.com/wp-content/uploads/2024/03/Blackwells-220-Demand-Response-Signed-1.pdf.
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