Disney gives CEO Bob Iger two extra years to find a successor

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Disney has extended Bob Iger’s contract until the end of 2026, extending a short-lived stay for the chief executive after returning to the world’s biggest entertainment company last November.

Upon his return to the company, Iger was charged with finding a new successor before the end of 2024, but Disney said Wednesday that its independent directors had voted unanimously to extend his term by two years.

Iger’s first term as CEO began in 2005 and lasted 15 years. It was also marked by transformational acquisitions and industry-leading growth, as well as the exit of several executives who had been identified as potential successors. Bob Chapek, the former head of the theme park, was eventually chosen as his successor, a tumultuous tenure that lasted only 33 months due to allegations that Iger had undermined him.

His new contract includes an opportunity to earn five times his base salary in an annual bonus, which was one times his earlier salary.

“Iger’s extension provides continuity of leadership during the company’s ongoing transition, and allows more time for CEO succession to execute a transition plan,” Disney said in a statement.

Iger said, “I believe that Disney’s long-term future is incredibly bright, but there is still much to be accomplished before this transformative piece of work can be accomplished.” He also said he wanted to make sure the company was in a strong position when his successor took over. The board is still evaluating both internal and external candidates, he said, adding, “I am fully focused on making a successful transition.”

The decision comes as Disney is facing challenges on several fronts. The company has faced criticism from Florida Governor Ron DeSantis and other Republicans for its support of LGBTQ issues. After Pixar, its studio’s creative record is in question Original flopped at the box office last month, and its sports network ESPN and other brands are grappling with declining cable television revenue.

Like many of its rivals, Disney has been grappling with the writers’ strike in Hollywood, the rising cost of sports rights and the need to improve the profitability of its streaming service, Disney+, which has required heavy investment since its launch. Iger’s first term.

In his first stint as CEO, Iger bought Pixar, Marvel, and Lucasfilm, giving Disney some of the most valuable franchises in Hollywood history and a growth story that was the envy of its rivals.

Doug Creutz, an analyst at TD Cowen, said that extending Iger’s contract “is likely to put little pressure on the stock, given that Iger has now passed more than half of his original two-year term, but It also reinforces the notion that serious problems with corporate succession planning remain.

Disney is also looking for a new chief financial officer. Christine McCarthy went on family medical leave last month.

Disney chairman, Mark Parker, said: “Time and time again, Bob has shown a unique ability to successfully transform Disney to drive future growth and financial returns.”

Disney shares were 0.8 percent higher in after-hours trading after the announcement, valuing the conglomerate at about $165 billion.