In the midst of a tumultuous battle over the company's strategy, Disney shareholders have voted against board nominees aligned with activist investor Nelson Peltz, bringing an end to months-long conflict. The decision was announced at Disney's annual shareholder meeting, where the majority of shareholders showed their support for a 12-person slate of board nominees presented by the company.

The conflict arose as Disney faced the challenges brought upon by the rapid growth of the streaming era. Trian Partners, Peltz's hedge fund and one of Disney's largest shareholders, launched a high-profile campaign critical of the company's approach to growth and its lack of a clear successor plan for current CEO Bob Iger, who is 73 years old.

Despite the activist push, Iger dismissed Peltz's campaign as a mere distraction, highlighting the recent strong stock performance and the significant knowledge and focus necessary to navigate the disruptive effects faced by many businesses today.

Peltz, 81, aimed to secure board seats for himself and former Disney Chief Financial Officer Jay Rasulo, calling upon shareholders to replace Maria Elena Lagomasino and Michael Froman. However, the majority of shareholders voted in favor of the company's slate of board nominees, effectively rejecting Peltz's proposed changes.

The proxy battle unfolded against the backdrop of the media industry's transformation towards streaming, which has led to challenges such as cord-cutting and declining movie theater attendance. While Disney has successfully grown its audience through its streaming services like Disney+, Hulu, and ESPN+, the platform has yet to generate profits.

Trian Partners, through the "Restore the Magic" campaign website, urged Disney management to develop a clear streaming strategy that could yield "Netflix-like margins." The website also emphasized cost cuts for the streaming business, a comprehensive review of the creative process, and a focus on acquiring new intellectual property.

Acknowledging the pressing challenges posed by streaming, Iger stated that Disney is actively undergoing a company transformation to address the concerns raised by Peltz. The recent quarterly earnings showed that Disney+ has gained an impressive 111.3 million subscribers since its launch, although it experienced a loss of 1.3 million subscribers in the final months of 2023.

To tackle financial obstacles related to streaming, Disney has managed to reduce losses by $300 million over a three-month period, positioning itself to cut $7.5 billion in costs by the end of fiscal year 2024. These cost-cutting measures have contributed to a 23% increase in Disney's stock price since October, albeit still down 30% from its peak in March 2021.

The issue of succession has also been a focal point of the proxy fight. Iger's tenure as Disney CEO, which began in 2005 and was initially set to end in 2020, saw multiple delays to his departure. However, after returning to the position in November 2022, Iger's contract was extended through 2026, raising questions about the succession process.

Trian Partners has urged Disney to provide clarity on the succession process and conduct an extensive search for Iger's replacement, emphasizing the importance of a smooth transition. Meanwhile, Iger, in a statement following his contract extension, expressed his commitment to the succession process and the evaluation of highly qualified candidates.

With the rejection of Peltz's board nominees, Disney moves forward with its own slate of board members, aiming to navigate the challenges of the streaming era and ensure a seamless transition in leadership when the time comes to replace Bob Iger.