Disney shareholders on Wednesday will settle a long-simmering proxy battle led by billionaire investor Nelson Peltz.

Voters will decide whether the company’s board deserves another year together, or if candidates nominated by activist investors, including Trian Partners’ Peltz, should replace certain directors.

Disney’s 2024 annual meeting will begin at 1 p.m. ET on Wednesday. Disney will air a live webcast of the event, which typically lasts about two hours.

The 81-year-old Peltz, along with former Disney Chief Financial Officer Jay Rasulo, have waged a quest to land two board seats. They’ve asked shareholders to name them as new directors in place of Maria Elena Lagomasino and Michael Froman.

Peltz, who dislikes being called an activist but has orchestrated successful campaigns at iconic companies like PepsiCo, P&G and Wendy’s, controls a $3.98 billion stake in Disney, or about 2% of total shares outstanding. Most of those shares are owned by former Disney executive and Marvel CEO Ike Perlmutter, who has supported Peltz and is paying a portion of the expenses relating to soliciting proxies, according to an SEC filing.

Trian claims Disney’s board has failed to generate sufficient returns in recent years as subscription streaming losses have mounted and traditional TV subscribers have declined. Trian has also argued Disney’s board has struggled to plan succession, noting Iger has renewed his contract as CEO five times and had to return to the post in late 2022 after his handoff to Bob Chapek failed.

Disney has countered that Iger has been righting the ship since his return as CEO, and the company should be left to recover without distraction. The company also said Iger and the board are carrying out a robust succession vetting process, which should be left uninterrupted.

“The whole board is leaning into this forward-looking, forward-leaning, incredibly disciplined [succession] process,” said Morgan Stanley executive chairman James Gorman, who joined the Disney board in February, in an interview with CNBC’s “Squawk on the Street” last week.

Disney shares closed Tuesday at $122.82, up 55% from a low of about $79 on Oct. 27 but down 38% from $197 three years ago. The stock has jumped 36% year to date, compared to a 9% gain for the S&P 500.

Both Disney and Trian received support from influential shareholders ahead of Wednesday’s meeting. Disney is leading Trian with more than 60% of shareholder votes already cast, Bloomberg reported Tuesday.

One top shareholder, who did not have access to non-public information and was speaking on the condition of anonymity, told CNBC they expected the vote would be extremely close.

Roughly one-third of Disney’s shareholders are retail shareholders, who historically vote in small numbers in annual meetings. But some individual stakeholders, including Star Wars creator George Lucas and Laurene Powell Jobs, have significant Disney stakes that give them heft akin to institutions. Both Lucas and Powell Jobs, who hold Disney shares via the acquisitions of LucasArts and Pixar, respectively, have supported Iger and the current board.

“Turnout in contested elections tends to be higher, because both sides are soliciting votes” from large and small shareholders, said 13D Monitor founder and president Ken Squire.

Institutional investors own the other two-thirds of Disney’s stock. BlackRock, Disney’s second-largest shareholder, plans to back the company, the Journal reported Monday. CNBC has confirmed T. Rowe Price, which owns about 9.3 million Disney shares, according to FactSet, is also backing Disney. Institutional shareholders can change their vote up until Wednesday’s meeting.

“We are comfortable that management has a viable plan to address the important matters facing the company,” a T. Rowe spokesperson told CNBC.

Iger also has the support of Mason Morfit’s ValueAct Capital, which has a history of pushing for strategic change. The two sides signed an “information-sharing agreement” in January, allowing Morfit access to nonpublic information. ValueAct owns just 0.28% of outstanding Disney shares, but its value to the company extends beyond voting. Disney has been able to tap ValueAct’s network and expertise when it has pitched institutional investors.

The California Public Employees’ Retirement System (CalPERS), Yacktman Asset Management, and Neuberger Berman have expressed their support for Peltz and Rasulo.

Even for seasoned advisors, it’s difficult to predict how major institutions will vote. The high-profile nature of the fight and the mixed recommendations from proxy advisory firms can make it even trickier.

“As the stakes grow higher, so does shareholder independence,” said Saratoga Proxy senior partner John Ferguson, who is not involved in the Disney-Trian situation. “At Disney, more than most fights, you’re going to see shareholder independence.”

Trian may have signaled it has become concerned Rasulo — who was trailing Peltz in early vote tallying, according to the Journal — won’t get enough support to land a seat. The activist fund filed a document Monday specifically focused on removing Lagomasino.

“She has overseen years of poor shareholder returns and deteriorating financial performance,” Trian wrote in its materials to shareholders. “Her background in wealth management is not relevant to Disney’s business and she does not have any skills that are central to Disney’s strategy that others directors do not also possess.”

Voting for retail shareholders closed Tuesday night. Disney estimated it would spend $40 million soliciting support from shareholders. That figure doesn’t account for the time and energy that Iger and his top management team have put into meeting with top shareholders.

Trian estimated it would spend $25 million on the fight. Peltz, his top lieutenants and their advisors met with investors throughout March.

Shareholder advisory firms Glass Lewis and ISS split their recommendations to shareholders. Glass Lewis sided with Disney and asserted Iger’s return, paired with this year’s nominations of Gorman and former Sky CEO Jeremy Darroch to the board, have given the company “adequate opportunity to launch a more credible succession program and develop, communicate and execute on several key initiatives which appear to reasonably target acknowledged operational and financial weaknesses at Disney.”

ISS countered that board oversight failures, particularly around succession, caused the firm to recommend Peltz’s nomination — though not Rasulo’s.

“Incremental change is needed at the company due to multi-year underperformance of the company’s peers and chosen benchmark, operational challenges, and most critically, a repeated failure on the part of the board to oversee the cultivation of a successor to Iger,” ISS wrote.

The top shareholder who spoke to CNBC said ISS’ decision to support Peltz over Lagomasino was a significant surprise.

While it supported Peltz, ISS said shareholders shouldn’t back Rasulo, citing his previous positioning as a potential successor to Iger.

“Though we do not have any concerns about his ability to serve as an objective director, we recognize that Rasulo’s potential presence might create added friction on the board,” ISS wrote.

Best known for its successful 2022 campaign to remove Peloton CEO John Foley, Blackwells has nominated media executive Jessica Schnell, SL Green director Craig Hatkoff and TaskRabbit founder Leah Solivan as its three Disney board replacement candidates.

Blackwells isn’t supporting Trian’s campaign and has different recommendations for Disney than Peltz and Rasulo, including a possible split of the company by separating its owned real estate into a publicly traded real estate investment trust.

Still, Blackwells has also been a thorn in Disney’s side. The investment firm released a presentation last month detailing a prior relationship between ValueAct and Disney, which said the investor made tens of millions of dollars in fees managing Disney pension funds.

ValueAct hasn’t managed Disney assets since it began building a stake in late 2023, a person familiar with the matter previously told CNBC. The arrangement still raised questions about ValueAct’s support for the company and whether Disney’s board should have disclosed the prior relationship.

Disclosure: Sky is owned by Comcast, the parent company of CNBC.

WATCH: Disney board battle reaches final moments