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Walt Disney has appointed two new directors — outgoing Morgan Stanley chair and chief executive James Gorman and Sir Jeremy Darroch, former group CEO of Sky — just days before activist investor Nelson Peltz is expected to nominate candidates for the company’s board.
The Disney board and Bob Iger, who returned as Disney chief executive last year, have come under fire from investors and governance experts for poor succession planning. The moves announced on Wednesday will place Gorman, who is stepping down as chief of Morgan Stanley at the end of this year, on a special succession planning committee.
Gorman, a former management consultant, has won kudos from investors and analysts for the way he organised his departure from the bank. After a succession race that was marked by its lack of acrimony, the two losing internal candidates have stayed on and accepted larger jobs under the winner, Ted Pick.
Darroch, who succeeded James Murdoch in 2007 at what was then a linear UK satellite broadcaster, is credited with turning Sky into one of Europe’s largest multiplatform TV providers in his 13 years at the helm.
Peltz and his firm, Trian Partners, began increasing their stake in Disney this year and have plans to request multiple seats on the company’s board when nominations open on December 5. Peltz abandoned an earlier bid for a single Disney board seat in February after Iger initiated a series of cost cuts and pledged to reinstate a dividend. A representative for Peltz did not respond to requests for comment.
ValueAct Capital, an activist firm run by Mason Morfit, has also built a significant stake in Walt Disney.
Earlier this month Iger announced an additional $2bn in cuts on top of the $5.5bn programme he unveiled last year. Iger also said at the time that Disney was on track to introduce a small dividend by the end of this year. The company stopped paying a dividend during the coronavirus pandemic.
Disney began a “comprehensive” search for new board members in April and said the appointments reflected the board’s commitment to “the succession planning process”. Earlier on Wednesday Iger told a New York Times conference that he planned to step down when his contract ends in 2026.
Disney’s board has been criticised for being too close to Iger after it granted him multiple contract extensions, which some investors have said may have cost Disney good potential chief executive candidates. Iger’s handpicked successor, Bob Chapek, lasted in the job for less than three years.
Gorman will become Morgan Stanley’s executive chair but he has been adamant that he sees that role as a purely transitional arrangement and plans to shift to a portfolio career relatively quickly.
Disney said board member Francis deSouza will not stand for re-election at the annual meeting scheduled for next spring.
