Disney’s board of directors issued a formal vote of confidence for CEO Bob Chapek after the former home entertainment executive abruptly fired Peter Rice, the media giant’s TV boss. Rice, who came to Disney in the $71.3 billion Fox acquisition, was reportedly seen as a possible successor to Chapek, whose contract comes up next February.
In a statement, Disney board chairwoman Susan Arnold said the strength of The Walt Disney Company’s businesses coming out of the pandemic remain a testament to Chapek’s leadership and vision for the company’s future.
“In this important time of business growth and transformation, we are committed to keeping Disney on the successful path it is on today, and Bob and his leadership team have the support and confidence of the board,” Arnold wrote.
The vote of confidence comes as Disney’s stock remains at a two-year low, and Chapek deals with the fallout of his controversial handling of Florida’s Parental Rights in Education legislation. Florida lawmakers have passed legislation that would strip Disney of its 55-year-old self-governing status in the state next year.
Redbox Entertainment April 20 disclosed it has reduced the size of its board of directors from nine to five members as the legacy kiosk movie rental company restructures management to deal with changing market conditions. Among the departing board members include representatives from parent Apollo Capital and Seaport Global SPAC — the latter helping Redbox become a publicly traded company last October.
Redbox reiterated there were no disagreements between the company and the departing directors.
Remaining board members include Kimberly Kelleher, president of commercial revenue and partnerships at AMC Networks, and Galen Smith, CEO of Redbox. Joining the board are independent directors Gregory W. Frenzel, Neal P. Goldman and Robert H. Warshauer.
The board changes come as Redbox issued stock warrants to HPS Lenders to purchase more than 11.4 million shares of Class A common stock, representing almost 20% of the company’s outstanding shares.
New Disney CEO Bob Chapek has been officially named to The Walt Disney Company’s board of directors, according to a regulatory filing. Chapek assumed the chief executive position in February after 15-year chief executive Bob Iger decided to step away from day-to-day operations.
“Bob Chapek has demonstrated remarkable leadership in the face of unprecedented challenges that were unimaginable when he became CEO just seven weeks ago, and we’ve watched him navigate this very complex situation with decisiveness and compassion,” Iger and Susan Arnold, independent lead director, said in a joint statement.
Iger, who assumed a newly created position of executive chairman of the board, earlier this week said he is returning to daily duties in an effort to assist Chapek as the latter confronts disastrous conditions across most Disney business units as a result of the coronavirus pandemic.
Prior to becoming CEO, Chapek served as chairman of Disney parks, experiences and products. During his tenure at Parks, Chapek oversaw the opening of Disney’s first theme park and resort in mainland China, Shanghai Disney Resort, and creation of the new “Star Wars: Galaxy’s Edge” lands at Disneyland and Walt Disney World. From 2011 to 2015, Chapek was president of the former Disney consumer products segment, where he drove a technology-led transformation of the business. He also served as president of distribution for The Walt Disney Studios, and was president of Walt Disney Studios Home Entertainment, where he spearheaded the successful “vault strategy” for the company’s legacy movies.
Disney reports second-quarter (ended March 31) fiscal results on May 5.
Fiscally challenged GameStop March 9 announced the appointment of three new members to its board, including Reginald Fils-Aimé, William Simon and James Symancyk.
Kathy Vrabeck, the gaming retailer’s lead director, will become board chair, succeeding Dan DeMatteo, former interim CEO, who is retiring in June. George Sherman remains CEO.
Simon and Symancyk’s appointments are effective immediately; Fils-Aimé’s appointment will be effective April 20. GameStop’s board also announced a number of corporate governance enhancements, implementing new guidelines for board tenure and committee refreshment, also effective immediately.
Directors DeMatteo, Gerald Szczepanski, Larry Zilavy and Steve Koonin are retiring from the board in June and will not stand for re-election at the annual shareholders’ meeting. In addition, two current directors — Jerome Davis and Tom Kelly — are retiring from the board, effective June 2021, and will not stand for re-election at the 2021 meeting.
Following the 2020 meeting, the GameStop board will be composed of 10 directors, nine of whom will be independent and six of whom will have served on the board for less than two years. Median director tenure will be one year, significantly reduced from the prior median director tenure of eight years. These changes represent key elements of a board “refreshment process” initiated in early 2019.
“The refreshment and governance enhancements represent an important milestone in GameStop’s transformation as we continue to evolve the company’s business strategy for long-term success,” Sherman said in a statement.
Indeed, the board changes come as GameStop faces increased challenges in a retail market undermined by digital streaming and lack of new-generation hardware. The company reported a 27.5% decline in winter holiday sales. Comparable store sales decreased 24.7%.
The three new directors are said to have “deep” experience and expertise in retail, turnaround, consumer products, gaming and finance that are relevant to the GameStop’s business.
Fils-Aimé brings more than 35 years of experience transforming companies, revitalizing brands and reshaping industries. From 2006 to 2019, he served as president/COO of Nintendo. During his tenure, Fils-Aimé focused on the development and launch of Nintendo DS, Wii, Nintendo 3DS and Nintendo Switch, quadrupling the company’s revenue from 2005 to 2010.
Simon has more than 30 years of operational and strategic advisory experience in the retail, consumer and food and beverage industries. Since 2014, he has served as a senior advisor at KKR & Co. Previously, he served in multiple leadership roles at Walmart from 2006 to 2015, including CEO of Walmart U.S. from 2010 to 2014; and COO of Walmart U.S. from 2007 to 2010.
Symancyk has more than 25 years of executive leadership and operational experience in the retail and consumer products industries. He has been CEO of PetSmart since 2018. Symancyk previously served as CEO of Academy Sports & Outdoors, a retail and ecommerce sporting goods chain, from 2015 to 2018.
“We appreciate the perspectives and input of our shareholders, which we carefully considered in making changes to our corporate governance guidelines,” Vrabeck said. “The board unanimously supports these enhancements, and we remain committed to ensuring that the Board is positioned to drive long-term value for all shareholders.”
Shareholders of Trans World Entertainment, parent to home entertainment retailer f.y.e. (For Your Entertainment) and e-commerce middleman eTailz.com, have approved a 1-for-20 shares reverse stock split to satisfy Nasdaq’s $1-per-share minimum requirement.
The company’s stock, which closed July 1 at less than 27 cents per share, would be worth $5.36 per share following the maneuver.
Separately, shareholders approved the appointment of Jeff Hastings, VP of sales and forecasting at Paramount Home Entertainment, to its board of directors.
Hastings joins the six-person board, which includes CEO Mike Feurer, Robert Marks, Michael Nahl, W. Michael Reickert and Michael Solow.
Hastings, who was put on the board nominee slate following pressure from TWEC shareholder Mark Higgins (son of late company founder Robert Higgins), previously informed the board that if elected, he could not begin his term on the board until September.
Netflix has amended its bylaws to enable a stockholder, or group of up to 20 stockholders, owning at least 3% of the company’s common stock continuously for at least three years, to nominate two board directors or 20% of the board.
Netflix’s board consists of 13 directors, including chairman/CEO and co-founder Reed Hastings.
The subscription streaming video pioneer, which initiated the change on March 28, said any nominees would be subject to certain limitations, including that both the stockholders and nominees satisfy requirements specified in the amended bylaws.
Shareholders approved the change – dubbed proxy access – in a vote at the annual meeting in June.
“By enacting proxy access, Netflix is finally giving investors a meaningful voice in board elections and they are no longer an outlier holding out on their long-term shareowners,” New York City Comptroller Scott Stringer told Reuters.
Netflix had rebuffed previous attempts by shareholders – notably the California Public Employees’ Retirement System (CalPERS), which owns about 689,000 shares – to get a seat on its board.
“The board periodically reviews our corporate governance and determined that adopting proxy access is appropriate at this time,” Netflix said in a statement.
Helios and Matheson Analytics, parent of ticket subscription service MoviePass, Aug. 30 disclosed that a member of its board of directors has resigned under protest.
Carl Schramm, in an Aug. 25 letter to Ted Farnsworth, CEO of HMNY, said he was resigning as a director, including positions on the audit committee, compensation committee, nominating and corporate governance committee and the pricing committee, citing a failure to receive necessary financial information on the company and subsidiary MoviePass.
Schramm served on the board since Nov. 9, 2016.
“I have sought, often unsuccessfully, information about the company’s financial status and operations, and explanations of company strategy,” Schramm wrote. “I have objected to the manner in which a number of business decisions have been presented to the board by management, without sufficient time for the board to examine complex documents, to review significant transactions, or to discuss how the proposed actions fit into the company’s strategic plan.”
Indeed, HMNY and MoviePass have engaged in numerous strategic moves aimed at buttressing the latter’s business model enabling subscribers daily access to a theatrical screening for $9.95 monthly fee.
With the service losing millions of dollars more per month than it generates, HMNY’s stock valuation has plummeted to 2 cents per share – after a 1-for-250 shares reverse stock split. A subsequent price hike was scuttled, with subscriber restrictions put in place instead.
In response, HMNY said it was unaware of any unanswered requests for information by Schramm. It said the board and committees of which Schramm was a member have met at least 25 times thus far in 2018.
HMNY contends it has kept the board “fully informed” and has provided all information needed for members to exercise their responsibilities.
HMNY said that since acquiring 92% stake in MoviePass, it has experienced unprecedented and unanticipated growth – including issues that have placed significant demands on management and the board, as evidenced by the number of board and committee meetings.
“But the company firmly believes all board and committee meetings have been duly noticed and held, and no material information has been withheld from any board member,” Farnsworth wrote in a filing.
Life is good for Ted Sarandos, chief content officer at Netflix. The long-time executive saw his 2018 annual salary balloon to $12 million from $1 million in 2017, excluding stock options, according to a regulatory filing.
Chief Product Officer Greg Peters’ salary increased to $6 million from $1 million, while CFO David Wells received a $300,000 pay raise to $2.8 million.
The pay raises (which count as corporate taxable income) reflect changes to executive compensation following passage of President Trump’s tax overhaul.
Netflix’s board scrapped executive bonuses at the end of 2017 and now pays straight salary to executives as bonuses are no longer deductible under the new corporate tax structure.
Notably, general counsel David Hyman and co-founder/CEO Reed Hastings received “pay cuts” to $2.5 million and $700,000, respectively. Hyman and Hastings were paid $3.3 million and $850,000, respectively in 2017, excluding stock options and bonuses.
Shed no tears for Hastings. The billionaire is slated to receive $28.7 million in stock options in 2018, up from $21 million in 2017.
Separately, Netflix’s board is facing a number of shareholder proposals critical of how the board operates.
Specifically, the board suggests shareholders reject proposals that would enable shareholders (with minimum 15% equity stake) to call for special shareholder meetings; adopt a “proxy access” bylaw that would allow shareholders to directly nominate board members; and enact a “claw-back policy” affording shareholders the legal clout to recoup executive incentive pay.
The board is also against a shareholder proposal allowing written consent against board nominees. The proposal argues shareholders should have the right to directly vote against any board nominee getting a high percentage (48%) of negative votes.
Netflix is also against allowing shareholders to vote on proposals by simple majority and amend the company’s bylaws to majority vote from “a plurality of shares voted.” The proposal argues that existing bylaws have enabled Netflix’s board to remain unchanged.
“Half of Netflix’s independent directors have tenures of at least 12 years and the board lacks racial diversity,” read the proposal.
Netflix in late March named Susan E. Rice, a former U.S. National Security Advisor and Ambassador to the United Nations under President Obama, to its board of directors.