The Bob Iger era at Disney will continue beyond its scheduled end date.
The Walt Disney Co. says that the venerable CEO has signed a contract extension, one that will keep him at the helm of the media and entertainment giant through 2026. The decision by the board was unanimous, and cited the need to transform the company and to execute a transition plan, “which remains a priority for the board,” the company said.
“Time and again, Bob has shown an unparalleled ability to successfully transform Disney to drive future growth and financial returns, earning him a reputation as one of the world’s best CEOs,” said Mark Parker, chairman of The Walt Disney Company. “Bob has once again set Disney on the right strategic path for ongoing value creation, and to ensure the successful completion of this transformation while also allowing ample time to position a new CEO for long-term success, the Board determined it is in the best interest of shareholders to extend his tenure, and he has agreed to our request to remain Chief Executive Officer through the end of 2026.”
Iger returned as CEO of Disney in November of 2022, in a shock move that saw his predecessor (and successor) Bob Chapek ousted by the company’s board of directors. At the time, Iger inked a two-year deal to serve as CEO “with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term,” the company said at the time.
As of now, there is no successor in place, though the board has created a committee specifically focused on finding one.
In a statement of his own, Iger said the extension came at the board’s request.
“Because I want to ensure Disney is strongly positioned when my successor takes the helm, I have agreed to the Board’s request to remain CEO for an additional two years,” he said. “The importance of the succession process cannot be overstated, and as the Board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful transition.”
Iger has since dramatically reorganized the company and cut costs, including some 7,000 employees, all in a bid to make its streaming business profitable and to stabilize a declining linear TV business. He is also searching for a new CFO to succeed Christine McCarthy, who stepped aside last month. The CFO position has long been a job where possible future CEOs are trained.
Iger, who previously led Disney as CEO from 2005-2020, had been set to receive compensation packages valued at roughly $27 million for each of the two years of his contract. However his new contract — while similar to the previous one — raises Iger’s annual target bonus from $1 million to $5 million, making his target annual compensation $31 million, dependent on performance and share price.
Of course, the new contract does not guarantee that Iger will run Disney for the next two and a half years. He stepped aside in 2020 to hand the CEO job to Chapek, moving to a role as executive chairman. Presumably if the Disney board identifies a successor between now and the end of 2024, that person could be named CEO, with Iger either once again opting to stick around in an executive chairman or advisory role, or leaving the company once more.
That being said, the new contract extension suggests that Disney does not expect to name another successor in the near future.
Iger helped choose Chapek as his successor in 2020, but as Disney struggled amid the novel coronavirus pandemic, and with Chapek making moves that Iger felt were unwise (most notably centralizing all revenue decisions in a single division), pressure grew on the company to decide if Chapek’s vision was the right one.
In fact, for all of Iger’s success as Disney CEO, the one area that has long been a challenge during his tenure is the succession problem.
Multiple former executives were, at one point or another, in line to succeed Iger (Jay Rasulo, Tom Staggs, Kevin McCarthy and Bob Chapek… who actually did succeed him), but the venerable CEO outlasted them all.
Now Disney has emerged from the pandemic (particularly in its parks division), but its streaming and media business at a turning point, and the Disney board is hoping that Iger can help it turn the corner before handing the reins to someone else.
“Since my return to Disney just seven months ago, I’ve examined virtually every facet of our businesses to fully understand the tremendous opportunities before us, as well as the challenges we’ve been facing from the broader economic environment and the tectonic shifts in our industry,” Iger added. “On my first day back, we began making important and sometimes difficult decisions to address some existing structural and efficiency issues, and despite the challenges, I believe Disney’s long-term future is incredibly bright.”