Activist Disney Investor Declares End to Battle for Board Seat

The activist investor Nelson Peltz on Thursday declared a swift end to his battle to instill himself or his son on the board of Disney, a day after the company’s chief executive, Robert A. Iger, announced a restructuring plan that will cut billions in costs and layoff thousands of employees.

Disney had no immediate comment.

Mr. Peltz, who leads the investment firm Trian Partners, had begun a proxy fight in January in an attempt to get himself or his son on Disney’s board. He called on the company to cull costs, revamp its streaming business, refocus on profit growth, reinstate its dividend and clean up the company’s messy succession planning. That Mr. Peltz’s Trian had amassed roughly $1 billion in Disney stock became known late last year, just as Disney fired Bob Chapek as chief executive after a troubled run of roughly two and a half years and reinstalled Mr. Iger, who held the position from late 2005 to early 2020.

On Wednesday afternoon, in his first earnings report since coming out of retirement to retake Disney’s reins, Mr. Iger delivered financial results that broadly pleased investors. Profit and revenue exceeded Wall Street’s expectations. Losses in Disney’s streaming division abated. Walt Disney World in Florida and Disneyland in California generated an astonishing $2.1 billion in profit, an increase of 36 percent from a year earlier.

In truth, those were Mr. Chapek’s results. The quarter was essentially set by the time Mr. Iger took over in late November.

Mr. Iger, however, laid a framework for Disney’s future on top of the numbers, one that left Mr. Peltz with little ground to stand on. Disney would cleave costs not by a little, Mr. Iger said, but by $5.5 billion, and eliminate 7,000 jobs. Disney’s streaming businesses would be managed differently as part of a restructuring designed to galvanize Disney’s film and television studios and prioritize profitability. The company’s dividend would be restored by the end of the year.

Mr. Iger even gave out candy to Disney fans, announcing plans to build an “Avatar” attraction at Disneyland and new installments in the “Toy Story” and “Frozen” franchises.

Disney shares rose 5 percent in after-hours trading on Wednesday following the results.

Then, at 6 a.m. on Thursday morning in Los Angeles, Mr. Iger continued his campaign on CNBC. He said that “everything was on the table” regarding Hulu, the general-audience streaming service that Disney controls. Some analysts have wondered if Disney should sell Hulu, but Disney had previously signaled that it intended to double-down on the service.

“I’m concerned about undifferentiated general entertainment, particularly given the competitive landscape that we’re operating in, and we’re going to look at it very objectively,” Mr. Iger said.

He added — in blunt terms, especially for a chief executive — that Disney had become too focused on Disney+ subscriber growth at the expense of profits. “We got a little bit intoxicated by our own sub growth,” he said.

It added up to a master class in dismantling a corporate threat. Mr. Iger came across as tough, clear-eyed and decisive.

“The proxy fight is over,” a representative for Trian said in a statement shortly afterward. “This is a win for all shareholders.”

In an on-air interview with CNBC’s Jim Cramer, Mr. Peltz said that Mr. Iger’s restructuring announcement indicated Disney “plans to do everything we wanted them to do.”

“We wish the very best to Bob, his management team, the board,” Mr. Peltz said. “We will be watching. We will be rooting.”

Shares of Disney were up another 4 percent in Thursday morning trading.