Iger to stay on as CEO of Disney
Search for a successor continues
Robert Iger has extended his reign at the Magic Kingdom for a third time, as an heir continues to be difficult to find.
The Walt Disney Co said on Thursday that Iger, 66, would remain chief executive and chairman until July 2019, an extension of one year beyond his previously pushed back retirement date, reflecting a continuing streak of success at the world’s largest entertainment company but also the lack of a clear successor.
“Succession is a complicated thing, and the board and I felt that we could use more time to not only spend on succession but to create a better transition,” Iger said during a mid-morning appearance at a previously scheduled University of Southern California event.
He was interviewed on stage by his wife, Willow Bay, the newly-named dean of USC’s Annenberg School for Communication and Journalism.
Iger said that wielding long-term corporate power could be corrosive.
“When your convictions prove to be right more than wrong, you get really confident,” he said. “You easily get more dismissive of other people’s ideas and other people’s convictions. So I want to be really careful that I leave at a time when I’m not only feeling like I’m at the top of my game but when it’s absolutely right for the company.”
As for his multiple renewals, Iger added, “I’m serious about it this time.”
Under the contract extension, Iger’s compensation will be determined on the same basis as before, according to a securities filing. But the new deal provides for a $5 million bonus if he completes the term.
He will also remain close to the company after stepping down: The extension calls for him to serve as a consultant for three additional years, with pay of $2 million for each of the first two and $1 million for the third.
The question now is who will follow him. Since he took over in 2005, Iger has led Disney to record financial results, even in the face of economic downturns, the occasional horrendous movie write-off and changing consumer habits that have dented ESPN, its primary profit engine.
The downside: Nobody seems to measure up, complicating succession at a company that has a history of bumpy transfers of power. (Iger’s predecessor, Michael Eisner, tried to cling to his job, resulting in him eventually turning over a company that was struggling.)
The obvious internal candidate to succeed Iger, the well-regarded Thomas Staggs, abruptly left Disney last year after losing the unqualified support of Iger and some other board members. Since then, Disney has been engaged in a quiet hunt for a successor, with an emphasis on outside candidates.
“The longer we can have Bob Iger running the show, the happier I will be,” said Trip Miller, the founder of Gullane Capital Partners, which holds a long position in Disney.
“At the same time, short-term investors have gotten very tied into this succession issue, and I think this clears that up a bit. Iger announcing a new retirement deadline tells me that perhaps succession planning is further along than we thought.”
Even among media conglomerates, Disney has a unique mix of businesses, some of which are healthier than others.
The company’s movie studio is widely regarded as the strongest in Hollywood — Beauty and the Beast, released last week, has already taken in more than $425 million worldwide — and the Disney theme parks are delivering record profits.
But the company’s vast consumer products division has been in decline, and Disney’s television operation, which includes ABC, Disney Channel and Freeform, has been struggling with ratings weakness and a lack of breakout shows.
Iger, who is also a member of the Apple board, started his entertainment career at ABC in 1974. Disney has no mandatory retirement age for chief executives; the company’s mandatory retirement age for board members is 74.
It was clear from his remarks at Thursday’s event, which focused on the future of technology and entertainment, that Iger still enjoys his job.
He spoke about recently visiting a Disney research and development lab to test a Star Wars virtual-reality experience — he had “a lightsaber duel with a Stormtrooper,” he said — and watching early footage from films on his laptop.
Bay noted that their last family Christmas card had a photo of Iger riding a roller coaster at Shanghai Disneyland.
As for Iger’s post-Disney life, there has long been speculation in Hollywood that he holds political aspirations.
“I’m not thinking much about it,” he told Bay. “There’s a whole world out there for me to enjoy.”