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HOW NELSON PELTZ AND DISNEY’S MARVEL CHIEF TEAMED UP IN PROXY FIGHT


‘IKE’ PERLMUTTER, KNOWN FOR FRUGALITY AND RUN-INS WITH CEO ROBERT IGER, ALSO WAS
CONCERNED ABOUT THE COMPANY’S SPENDING

Isaac ‘Ike’ Perlmutter is chairman of Disney’s Marvel Entertainment unit.

Photo: Susan Walsh/Associated Press

By

Robbie Whelan

Updated Feb. 13, 2023 5:41 pm ET


Longtime friends Isaac “Ike” Perlmutter and activist investor Nelson Peltz
shared a similar opinion: Walt Disney Co. was spending too much money.

Mr. Perlmutter, chairman of Disney’s Marvel Entertainment unit, was known to be
passionate about cost-cutting and once demanded that an action sequence in the
2008 movie “Iron Man” be shot with only three Humvees, instead of the 10 called
for in the script. His feuds with Robert Iger during the chief executive’s first
tenure over how to run Marvel’s movie studio caused a rift that...

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Longtime friends Isaac “Ike” Perlmutter and activist investor Nelson Peltz
shared a similar opinion: Walt Disney Co. was spending too much money.

Mr. Perlmutter, chairman of Disney’s Marvel Entertainment unit, was known to be
passionate about cost-cutting and once demanded that an action sequence in the
2008 movie “Iron Man” be shot with only three Humvees, instead of the 10 called
for in the script. His feuds with Robert Iger during the chief executive’s first
tenure over how to run Marvel’s movie studio caused a rift that remains.

Meanwhile, Mr. Perlmutter supported Mr. Peltz and his campaign to get onto
Disney’s board and push for significant changes to Disney’s governance and
operations, including cost cuts. Mr. Peltz ended that campaign Thursday after
Mr. Iger announced plans to remove 7,000 jobs and reduce spending by $5.5
billion as part of a reorganization plan.

Though Disney didn’t respond to all of Mr. Peltz’s demands, the commitment to
austerity pleased both him and Mr. Perlmutter. In a Thursday news release, Mr.
Peltz’s Trian Fund Management LP praised Mr. Iger’s “recently announced
operating initiatives, which are a win for all shareholders and broadly align
with our thinking.”

The changes would improve Disney’s financial results, Trian said, and Disney’s
plan to restore its cash dividend—which it suspended in early 2020—by the end of
2023 was a bonus. Disney’s shares fell 2% last week but remain up 24% for the
year, through Monday.  

‘Iron Man’ became a point of contention regarding Disney’s spending.

Photo: Paramount/Everett Collection

Mr. Perlmutter declined to comment through a spokesman. He was impressed by the
size of Disney’s planned cuts, said a person close to the Marvel chairman who
spoke with him after Disney made its announcement. 

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“This whole fight was not, in Ike’s mind, about changing the Disney board. It
was mostly about changing their attitude,” this person said. “For him,
overspending is like a cancer. If it’s not constantly watched, it grows.”

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Mr. Perlmutter’s views were relevant because as one of Disney’s biggest
individual shareholders and former CEO of Marvel, he had connections with Disney
management and directors that he sought to use to advance both Mr. Peltz’s
activist campaign and his own agenda of clamping down on spending.

Disney saw Mr. Perlmutter’s influence in Mr. Peltz’s campaign, and viewed the
two men as collaborators in trying to overhaul the company’s board, according to
people familiar with the matter.

On at least six occasions going back to July, Mr. Perlmutter reached out to top
Disney executives, including former CEO Bob Chapek, Chief Financial Officer
Christine McCarthy and General Counsel Horacio Gutierrez, as well as to Disney
director Safra Catz,

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and had conversations seeking to persuade them to add Mr. Peltz to the board,
according to proxy materials filed in January by Disney with financial
regulators.  



Messrs. Iger and Perlmutter have had a tense relationship since 2015, when Mr.
Perlmutter’s quarrels with current Marvel Studios chief Kevin Feige over budgets
and movie slates grew so intense that Mr. Iger, then in his first stint as
Disney’s CEO, intervened and removed Mr. Perlmutter as CEO of Marvel’s movie
studio, according to people familiar with the matter. Mr. Iger later stripped
Mr. Perlmutter of further responsibilities, including control over Marvel’s
television shows, heightening the acrimony between them, these people said.

“He was not happy about it,” Mr. Iger said in a Thursday interview with CNBC.
“And I think that unhappiness exists today.”

Nelson Peltz urged changes at Disney before ending a campaign to join its board.

Photo: Calla Kessler/Bloomberg News

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Mr. Perlmutter continued to try to influence moviemaking decisions after being
forced out as CEO of Marvel, according to people familiar with the matter. As
recently as October, he sent emails to top Disney executives seeking financial
information about the Marvel movies and questioning the studio’s wisdom in
greenlighting big-budget titles such as last year’s “Doctor Strange in the
Multiverse of Madness,” which grossed $956 million at the global box office.
Disney has interpreted these inquiries as efforts to undermine Mr. Feige, these
people said.

While Mr. Perlmutter doesn’t have a good relationship with Mr. Iger, the person
familiar with his thinking said, the Marvel leader’s motive was to get Disney to
reduce spending and maximize profit, and it wasn’t motivated by a grudge against
Mr. Feige or anyone else at Disney.

Born in what is now known as Israel in 1942, Mr. Perlmutter grew up poor in
Israel and served in the military, fighting for Israel in the Six-Day War of
1967. He later emigrated to the U.S. and worked as a toy merchant before
building a fortune buying up bankrupt companies and liquidating their assets or
reorganizing their operations.

PHOTOS: ROBERT IGER’S BIGGEST MOVES THAT RESHAPED DISNEY

Alberto E. Rodriguez/Getty Images

One such company was Marvel, which Mr. Perlmutter gained control of in the late
1990s after outmaneuvering corporate raider Carl Icahn and investor Ronald
Perelman. Marvel began licensing its library of superheroes, including
Spider-Man and the X-Men, to Hollywood studios a few years later. In the early
2000s, when Marvel began producing its own movies, including “Iron Man” and
“Captain America: The First Avenger,” Mr. Perlmutter and other leaders of Marvel
saw them primarily as promotional tools to sell toys and other merchandise.

Disney, under the leadership of Mr. Iger, bought Marvel in 2009 for $4 billion
and took over its catalog of characters and its movie studio. Later, Mr.
Perlmutter would try to discourage Disney from making certain titles, such as
“Black Panther” and “Captain Marvel,” which he thought wouldn’t generate
significant toy sales, especially overseas, according to people familiar with
his thinking.

Over the years, Mr. Perlmutter’s frugality became well-known. His colleagues
tell stories of how Mr. Perlmutter, a billionaire with multiple houses, would
fish paper clips and worn-down pencils out of the trash for re-use and for years
refused to replace an aging Lincoln Town Car that he used to shuttle between
meetings in New York. Mr. Perlmutter and his wife enjoyed getting a Saturday
lunch of a hot dog, yogurt and a Diet Coke for $3.03 at the local Costco

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supermarket in Florida, but groused to colleagues that the same lunch cost
pennies more at the store near the couple’s home in the New York area. 



Bringing back a chief executive is a strategy many companies have attempted over
the years, some more successfully than others. WSJ looks at three so-called
boomerang CEOs and how their companies did after their return. Photo
illustration: Adele Morgan

Messrs. Perlmutter and Peltz have been friends for years and frequently dine
together with their wives in Florida. Both men supported Donald Trump’s
campaigns for president, and Mr. Perlmutter, a member of Mr. Trump’s Mar-a-Lago
golf club, provided unofficial guidance to Mr. Trump on veterans affairs during
his administration. 

The pair saw an ally in Mr. Iger’s predecessor, Mr. Chapek, a self-described
salesman who rose to Disney’s top job after leading its consumer-products and
parks divisions, but who lacked experience making movies or television shows.
Disney’s proxy statement describes a trip the former CEO took to Florida on Nov.
12, in which he met separately with Messrs. Peltz and Perlmutter, and both men
“expressed support for Mr. Chapek.” The board fired Mr. Chapek on Nov. 20 and
brought back Mr. Iger as CEO.

Mr. Peltz began accumulating Disney shares in early November and in January
announced a proxy battle against the company. In presentations supporting the
campaign, Trian criticized Disney’s “over-the-top” executive compensation, said
Disney’s board had failed to properly plan for CEO succession and decried what
it described as weak governance and shareholder returns.

‘Ike’ Perlmutter, in blue tie, supplied unofficial guidance to Donald Trump on
veterans affairs during his presidential administration.

Photo: brendan smialowski/Agence France-Presse/Getty Images

The changes that Disney announced Wednesday didn’t deal with governance or board
issues, and instead focused on consolidating operations and putting business
strategy decisions in the hands of content executives. Mr. Iger said the company
would make fewer movies and TV shows and focus more on Disney’s core franchises.

In Thursday’s televised interview, Mr. Iger said it was Messrs. Perlmutter and
Peltz “working together to try to encourage the board or convince the board” to
make Mr. Peltz a director.  

After the interview, Mr. Peltz went on TV to end the proxy campaign, surprising
Mr. Iger and Disney, which had been preparing for a lengthy fight, according to
a person familiar with the matter. Mr. Iger learned the news from an assistant
as he was walking back to his office after being on TV, the person said.

Proxy fights are expensive and time-consuming, and for Mr. Peltz, achieving part
of his agenda is better than walking away empty-handed, said Charles Elson, a
corporate-governance professor at the University of Delaware.

“Even if you get half a loaf, it’s better than no loaf,” he said.

Write to Robbie Whelan at robbie.whelan@wsj.com

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