LOS ANGELES — Walt Disney shareholders backed Chief Executive Bob Iger and other company directors on Wednesday, defeating a campaign by activist investors who argued the storied entertainment giant had underperformed in the streaming-television era. The vote to re-elect all 12 of Disney's current board members, announced at the company's annual shareholder meeting, ended a multimillion-dollar, mud-slinging battle launched by billionaire Nelson Peltz and Blackwells Capital. Peltz's and Blackwells' campaigns were separate, competing efforts but both wanted change at Disney.

"With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers," Iger said.

While Disney's board held off the activists' challenge, it still must find a successor to the 72-year-old Iger before his scheduled retirement at the end of 2026. Board members recently sought to reassure shareholders that they took the matter seriously and were vetting candidates.

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The company also must show progress in its efforts to make the streaming television unit profitable and to launch an app for its flagship ESPN sports network, analysts said.

"Iger now has a window by which to execute his recovery plan," said Dan Coatsworth, analyst at investment platform AJ Bell. "But failure to produce the desired results within the next 12 months could see investors switch allegiance."

Disney shares were down 3.2% at $118.94 late on Wednesday afternoon.

Peltz, CEO of Trian Fund Management, and Blackwells were seeking five seats between them on Disney's board. The activists argued the $225 billion media company has bungled its CEO succession planning, lost its creative spark and failed to properly harness new technology.

"All we want is for Disney to get back to making great content and delighting consumers and to creating sustainable long-term value for all of us," Peltz said at the meeting before the results were announced.

"Regardless of outcome of today's vote, Trian will be watching the company's performance," he added.

The tussle was a closely watched referendum on Disney's efforts to reinvigorate its film and television franchises, make its streaming business profitable and find partners to help build sports network ESPN's digital future.

Both sides spent millions of dollars on campaigns trying to persuade voters and launched public and personal attacks.

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Peltz had been seeking a board seat for himself and for former Disney Chief Financial Officer Jay Rasulo. Disney said the pair lacked the necessary skills, offered "nothing new" in their suggestions for improvement and noted that Rasulo had been passed over to succeed Iger.

Peltz at one point responded that Disney was "stupid" in opposing him, arguing that he was trying to help Iger.

Iger received the backing of 94% of voting shareholders. Peltz was supported by 31%.

"It was clear the shareholders decided that they like what Iger is doing and want to give him more time, and they see Peltz as a distraction from their long-term building," said Bill George, former CEO of medical device maker Medtronic and executive fellow at Harvard Business School.

Trian was Disney's fifth-biggest shareholder with a 1.76% stake as of Dec. 31, according to LSEG data. The hedge fund's $3 billion bet on Disney was largely responsible for its underperformance last year relative to its activist peers, according to financial details provided to Reuters by a Trian investor.

Disney shares peaked in March 2021 at $201.91 when the company was gaining streaming subscribers. The stock price later fell as the streaming division kept losing money. Disney's board fired then-CEO Bob Chapek, bringing Iger back to the helm.

In a statement after the vote, Trian said it was "disappointed" in the outcome but noted that Disney's share price has risen since it launched its campaign.

The company's stock is up about 31% so far this year, making it the top performer on the Dow Jones Industrial Average in 2024. Shares have been lifted by positive earnings and initiatives such as a $1.5 billion investment in "Fortnite" maker Epic Games and a sports streaming app with Fox Corp and Warner Bros Discovery.

Blackwells said its "primary objective was achieved – keeping Nelson Peltz out of the Disney boardroom."

"The company would have benefited from any one of our candidates for the hard work needed over the next few years to advance this iconic company, but we respect the will of the shareholders and the outcome," a Blackwells statement said.

Peltz loses at Disney, but his investors win; changes may still be ahead.

(Reporting by Dawn Chmielewski and Lisa Richwine in Los Angeles and Svea Herbst-Bayliss in New York. Additional reporting by Akash Sriram in Bengaluru and Noel Randewich in Oakland, California. Editing by Jamie Freed, Sonali Paul, Kenneth Li and Matthew Lewis)