Jim Cramer says Disney should allow Nelson Peltz to join its board

CNBC’s Jim Cramer called Thursday Disney to get activist investor Nelson Peltz a seat on the board.

“It’s the board, the shop stewards who haven’t done a good job. Not the shareholders and not Peltz. Now someone like Peltz, who’s been hugely successful, wants to join them and they act like that’s a problem,” he said.

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Trian Fund Management, Peltz’s activist firm, filed a preliminary proxy statement Thursday to appoint the investor to Disney’s board of directors.

Peltz laid out his plan for a proxy fight against the entertainment giant on Thursday on CNBC’s “Squawk on the Street.”

He highlighted his troubles with Disney, including Fox’s $71 billion acquisition in 2019, which he says wrecked the company’s balance sheet, the company’s declining value in recent years, and what he sees as poor corporate governance .

Cramer agreed with Peltz’s assessment of the costly Fox acquisition and accounting problems, and criticized Disney for declining the activist investor’s bid for a seat on the board.

He also reminded investors who own shares of the company that a proxy fight could erode shareholder returns.

“A lot of money, your money if you’re a shareholder like my charitable foundation, is being spent preventing Nelson Peltz from joining the board … although he’s not the type to be involved in the disastrous Fox takeover or the disastrous decision.” Bob Chapek, the CEO, was involved,” said Cramer.

Disclaimer: Cramer’s Charitable Trust owns shares of Disney.