Cole Short Interviewed by the Los Angeles Business Journal About Nelson Peltz and Disney
Nelson Peltz, a Disney investor who was fighting to improve Disney’s operations and profitability, stood down recently, feeling his objections had been addressed by Disney’s board of directors. Peltz, who was angling for a seat on the Disney board, had been publicly criticizing Disney’s recent strategy, stating the company overpaid for its 2019 acquisition of 21st Century Fox.
In an interview with Zane Hill of the Los Angeles Business Journal, Cole Short, assistant professor of strategy at Pepperdine Graziadio Business School, spoke on how activist investors like Peltz operate.
“Tensions between activist investors and boards usually arise when there are conflicting perspectives on how a company should be managed,” Short said. “Peltz’s proposals pointed to evidence relating to Disney’s historical financial performance as well as how he envisions creating value for company shareholders.”
Coming out of the Peltz battle, Disney announced massive layoffs, while also announcing that Disney’s streaming platforms would be profitable by 2024.
“Layoffs carry real consequences for employees and their families,” Short said. “Even in the name of strategic effectiveness, layoffs should be a last resort. Near-term pressures, such as recent financial underperformance and activist campaigns, can pressure executive teams to focus on immediate, rather than long-term, returns.”
Read the full article in the Los Angeles Business Journal.