The minutes are ticking toward the end of Disney’s bitter proxy battle with Nelson Peltz, whose bid to scale the board is a direct challenge to CEO Bob Iger.

Barring any pending chads, the results of voting for members of the board of directors will be announced Wednesday at the company’s annual shareholder meeting at 1:00 PM ET / 10:00 AM PT. (The polls officially close tonight at 11:59 PM ET.) Iger fought, and authorized the spending of $40 million, to destroy the intrusive activist investor, but whether he won or lost, he called the fight by to ruin succession.

Clumsy regime change became Peltz’s rallying cry, far more persuasive than his ideas about strategy. That’s why the race was so hard fought. ISS, the most influential proxy advisory service, dealt perhaps the biggest blow to the company by backing Peltz in a move reminiscent of withholding votes from then-CEO Michael Eisner in 2004 during the final epic showdown at the annual meeting .

This time, the company cited in large part the botched succession process of 2020, when Iger abruptly resigned just as Covid began to upend the world, appointing company leader Bob Chapek as CEO. The board backed that baton, “albeit not following the process it outlined for the current succession strategy,” ISS said, adding that board members “simply relied on Iger’s judgment without conducting more rigorous due diligence.” Another odd decision was for Iger to remain in the mix as executive chairman to oversee the creative side of the company, predictably confronting Chapek.

“Disney was so well planned, telegraphed and it felt like it was coming over us,” says one Wall Street analyst. “It still really bothers me.”

Peltz’s presence could reassure other investors that the board is properly involved this time, ISS said.

Iger has bolstered support for the company’s roster of directors from a glittering list of potentates, including JP Morgan Chase CEO Jamie Dimon, Eisner, George Lucas, Laurene Powell Jobs and the Disney family. However, in addition to ISS, Peltz has also won over the top pension fund CalPERS and Egan-Jones, a smaller proxy advisor.

Reports indicate that Disney has the edge in the voting. However, with the battle now much fiercer than expected, there is talk in many showbiz circles that the company will have to come to the fore on who will be the next CEO soon after the proxy dust settles. Iger’s contract, which has already been extended once since his return in 2022, runs through 2026. Four internal candidates have been identified: entertainment division co-chiefs Dana Walden and Alan Bergman; Josh D’Amaro, Parks Department Chief; and ESPN Chairman Jimmy Pitaro. There’s also a school of thought that Disney could reach outside the company and tap a big name from the tech world, especially as it has repositioned itself for streaming. Regardless of who is anointed, some damage has been done.

“It hurts Iger, it makes him seem selfish and indecisive, and that hurts Disney,” said a rival studio executive. “All the people that have been passed over, the Chapek catastrophe, the contract extension (last year), he now has to let the board do its job,” the C-suiter added.

Another industry insider put it more bluntly: “Someone needs to tell Bob that no one is irreplaceable.”

To some observers, that someone could be James Gorman, who was part of a succession process at Morgan Stanley last year when he handed over the reins just before joining Disney’s board in February.

The bank manager is seen in the city’s upper echelons as someone Iger considers his equal and to whom he would listen. “Whether or not he agrees, Gorman knows the perception that the board is handcuffed by Iger won’t bother him,” notes one industry mandarin.

Last week, Gorman told CNBC: “When I joined the board, the thing I was focused on was that they had a rigorous succession process.” Noting that the succession committee led by Disney Chairman Mark Parker met in February and “will meet another eight or nine times this year,” Gorman noted: “I just finished a huge succession process at Morgan Stanley, I am impressed with the process.”

The succession complaints predate Chapek, who was dismissed in November 2022 while Iger returned to work as CEO.

Wall Streeter analysts are still nostalgic about Tom Staggs, the former CFO and COO who was groomed for succession before being passed over, and initially faced off against Jay Rasulo, who was also passed over by Iger. Rasulo left Disney in 2015. Staggs left in 2016. (Peltz’s Trian Fund Management also nominated Rasulo to the board, but he hasn’t gained as much traction.) Two years later, Disney’s streaming chief and strategic planning vet Kevin Mayer made a big deal considered Iger’s likely successor, he left in 2020 after Chapek got the top job. “I’m sure in retrospect he would have chosen Kevin Mayer,” the analyst said.

It is about “succession and management. It’s not just that once they know who the next CEO should be, they can pat themselves on the back and say, ‘Good job,'” Michael Levin of consultancy The Activist Investor told Deadline. Given the name of his company, it’s clear where he tends to fall on this issue, but he’s hardly alone in his criticisms, which have been voiced by many investors over the past fifteen years.

“There needs to be some change in the way this administration views its role,” he said. First, it could have done a better job of talking to CalPERS – “and not two months ago, but two years ago. … It is largely an inward-looking administration.”

This proxy fight “should be a real wake-up call to this administration that they need to get a lot more control.”

“You see that the shareholders are conflicted,” says another analyst. Succession will now be “a much more thorough process… I think they had to have learned it the first time.”

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