By Svea Herbst-Bayliss
NEW YORK (Reuters) - Activist investor Nelson Peltz's hedge fund Trian Fund Management wrote to Walt Disney Co shareholders on Thursday to make the case for replacing the media and entertainment conglomerate's board director Michael Froman.
Trian, which owns a roughly $1 billion stake in the home of Mickey Mouse, has asked Disney shareholders to drop Froman - a former U.S. Trade Representative - from the company's 12-member board and elect Peltz instead.
Trian did not spell out in the letter why it had picked Froman to target among the Disney directors, but suggested that Peltz was more qualified to serve.
"Shareholders need someone in the boardroom who is experienced enough, committed enough and objective enough to insist that Disney live up to its full potential," the letter said.
Disney and Froman did not immediately respond to requests for comment.
Froman, a lawyer who served as U.S. Trade Representative under U.S. President and Harvard Law School classmate Barack Obama between 2013 and 2017, had limited entertainment or technology industry experience before joining Disney's board in 2018. His main corporate experience was at Citigroup Inc.
In the letter, Trian also directed its criticism at the full Disney board, blaming it for a 44% drop in Disney's stock last year. It argued board directors failed to "instill a culture of accountability," did not properly plan for Bob Iger's succession as chief executive, own very little stock, and they did not "heed constructive shareholder input."
Iger returned to the top job in November from retirement after Disney fired his successor, Bob Chapek, after the company reported a 66% drop in quarterly profit.
The Disney directors, who include the chief executives of car maker General Motors, biotechnology company Illumina Inc, and sports apparel firm Lululemon Athletica Inc, are too distracted to focus on Disney, according to the letter.
"Nelson wakes up every day trying to find ways for Trian's investments to generate the best returns," the letter said.
Peltz has served on 11 public company boards at companies including Procter & Gamble Co. He has said that these companies on average outperformed the broader stock market index during his time as a director on their boards.
Disney rebuffed Peltz's request for a board seat last month, arguing he lacks the necessary entertainment and technology skills and experience to help the media company.
A shareholder vote to decide on the composition of Disney's board has not yet been set but is expected in the spring.
(Reporting by Svea Herbst-Bayliss; editing by Uttaresh.V)