ValueAct Challenges Disney's Governance and Fees

ValueAct, a hedge fund, has been critical of Disney's governance and fees. They argued that Disney's board of directors is too large and ineffective, with 12 members, and that the company's CEO, Bob Iger, has too much power.

Disney's governance structure has been criticized for being too complex and opaque. ValueAct's criticism is based on their analysis of Disney's proxy statement, which showed that the company's CEO and CFO have significant power to make decisions without board approval.

ValueAct also took issue with Disney's fees, which they argued are too high. Disney's fees for its CEO and CFO are among the highest in the industry, and ValueAct argued that the company's shareholders are not getting value for their money.

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The Disney board of directors has given their full support to the company's acquisition of 21st Century Fox's film and television assets.

ValueAct Capital, a significant shareholder, has been a vocal critic of the deal, but the board's approval has effectively silenced their opposition.

The acquisition is expected to boost Disney's market share and create a media powerhouse, with a combined library of over 60,000 movies and TV shows.

Disney's stock price has been on the rise since the deal was announced, with investors optimistic about the potential for growth.

ValueAct's concerns about the deal's value and potential risks were ultimately addressed by the board's decision.

The acquisition is expected to be completed in 2019, pending regulatory approval.

ValueAct Capital, a hedge fund known for its activist approach, made a significant impact on Disney's corporate governance. The fund's involvement led to a major overhaul of the company's board of directors.

ValueAct's activism resulted in the appointment of several new directors, including Jeffrey Smith, who would later become the lead director. This change in leadership marked a shift in the company's priorities.

The new board members brought a fresh perspective to the company, focusing on cost-cutting measures and improving shareholder returns. ValueAct's influence led to a more efficient use of Disney's resources.

Under the new leadership, Disney made significant cost-cutting moves, including the elimination of redundant positions and the consolidation of its business units. This effort helped to streamline the company's operations.

The changes implemented by ValueAct's influence led to a notable increase in Disney's stock price.

ValueAct's involvement with Disney has led to concerns about the company's pension fees. Disney's pension fees are a significant expense, with the company paying 7% of its payroll to the pension plan.

ValueAct's letter to Disney's board of directors highlighted the need for more transparency in the company's governance practices. Disney's governance structure has been criticized for its lack of diversity and representation.

Disney's pension plan is underfunded, with a funding ratio of 83.4% as of 2020. This means that the plan has a significant gap in its assets compared to its liabilities.

ValueAct's criticism of Disney's governance practices is not new, with the activist hedge fund having previously raised concerns about the company's board composition. Disney's board has been criticized for its lack of independence and representation of shareholder interests.