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: Disney names new board member in deal with activist investor Third Point

The Walt Disney Co. announced a new board member Friday afternoon as part of a settlement with activist investor Third Point LLC.

Disney
DIS,
-3.20%

disclosed that Carolyn Everson, who previously served as an executive for delivery company Instacart as well as Facebook
META,
-0.54%
,
will join the board as of Nov. 21. The appointment was part of a standstill agreement with Third Point, an activist hedge fund run by Dan Loeb, a well-known activist investor who bought into Disney this year and agitated for the spinoff of ESPN and other moves.

“We are pleased with our productive and ongoing dialogue with [CEO] Bob [Chapek] and Disney’s management team,” Loeb said in a joint announcement Friday afternoon. “The expansion of Disney’s Board of Directors to include Carolyn Everson will add an important new perspective to an already accomplished group.”  

See also: Why Dan Loeb’s pressure campaign failed to persuade Disney to spin off ESPN

The standstill agreement, as outlined in a filing with the Securities and Exchange Commission, precludes Third Point from amassing more than 2% of Disney’s stock or seeking changes via proxy through the 2024 annual meeting, as long as Everson remains on the board. It also requires the investor to vote for Disney’s slate of board candidates and follow Disney’s recommendation on shareholder resolutions.

In an August letter to Disney management seeking changes, Loeb had pointed to a “board refresh” as one request.

“This is not meant to single out any current board members, but we believe there are gaps in talent and experience as a group that must be addressed,” the letter read. “Third Point has identified potential board members who we believe would make essential contributions to the company’s board at this critical time. We would be happy to make an introduction.”

Less than a month after that letter was sent, Loeb dropped the demand for ESPN to be spun off after Chapek outlined his plans for the sports-media giant.

Everson spent just more than three months as president of Instacart after being lured away from her position at the company now called Meta Platforms Inc., where she worked for more than a decade. She has also previously worked at Microsoft Corp.
MSFT,
-1.94%

and Viacom Inc. and also serves on the boards of the Coca-Cola Co. and Creative Arts Agency.

“Carolyn has had a hand in building a number of world-class digital advertising businesses, and her insights make her a great fit as we continue to position the company for long-term growth,” Chapek said in a statement Friday.

For more: Disney CEO discusses Hulu within Disney+ and ESPN’s sports-gambling plans

Everson’s appointment increases the size of Disney’s board to 12 members, and the directors are now evenly split between women and men, with six of each.

“Disney is a beloved brand with an incredible history that brings joy to millions of consumers around the world and one that has meant so much to me and my family over the years,” Everson said in a statement. “I am fully committed to helping progress Disney’s strategic priorities at an exciting time for the business and industry at large.”

Disney shares gained about 0.4% in after-hours trading Friday following the announcement, after declining 3.2% to $94.33 in the regular session. The stock has fallen 39.1% so far this year, as the S&P 500 index
SPX,
-1.51%

has dropped 23.6% and the Dow Jones Industrial Average
DJIA,
-1.71%

— which counts Disney as a component — has declined 19.6%.

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