Bob Iger Extended Through 2026 as Disney CEO

 by Ray Keating

News

DisneyBizJournal.com

July 12, 2023

 

The Walt Disney Company announced today that the company’s board of directors voted unanimously to extend Bob Iger’s contract as CEO through the end of 2026. That’s a two-year extension on the contract that brought him back to the top spot at Disney.

Mark G. Parker, chairman of The Walt Disney 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. 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, of course, returned to the Disney CEO position in November 2022, after Bob Chapek, who was Iger’s handpicked successor, was fired.

 

Iger said, “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. 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.” 

 

Recently, Disney has had a string of movies that flopped at the box office, in part due to enormous budgets tied to those films. At the same time, the Disney parks had been thriving, though crowds seemed to thin during the July Fourth holiday.

 

Iger, who is 72, added, “But there is more to accomplish before this transformative work is complete, and 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. 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 his work cut out for him between now and December 31, 2026, to get Disney back on track. Disney’s stock price basically has been flat year to date, but down from its recent high of $113.21 per share as of early February 2023, and closing today at $90.15.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? 

 

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From Chapek to Iger, and Disney’s Road Ahead

 by Ray Keating

Analysis

DisneyBizJournal.com

November 30, 2022

 

More than a week after the surprise move of the Disney board in firing Bob Chapek as CEO, and bringing back Bob Iger, a great deal of ink, as we used to say in the newspaper business, has been spilled on what Iger and Disney now face.

 

Reviewing a host of reporting by, for example, The Wall Street Journal, The New York Times, CNBC, The Hollywood Reporter, and the Orlando Sentinel, there are some points worth noting and a few questions to ponder. However, there also seems to be a firm-grasp-of-the-obvious running through many of these reports.

Profits? What a Crazy Idea

 

One of the big firm-grasp-of-the-obvious points being repeated is that Iger will have to figure out how to make the Disney streaming services profitable, while also not undercutting, or accelerating the decline of, television and movie theater revenues and profits. Well, yeah. We’ve known this for a while, and Disney isn’t the only company dealing with this challenge.

 

Part of that story also is supposedly switching the emphasis in streaming from increasing subscriptions to moving from losses to profitability. Again, this has been the discussion since Disney+ was first launched, and the point long has been that Disney+ would move to profitability sometime in 2024. Iger will now have his say as to how to get that done.

 

As for theme parks, The Wall Street Journal served up a report noting that the parks have been a profit generator post-pandemic, but that there are investor fears that profit margins might be shrinking, as market expectations were missed in the most recent earnings announcement. Profit margin issues aren’t surprising given inflation, the sluggish economy, and the fears of recession. The questions come when trying to figure out how much recent Disney price increases might contribute to margin problems looking ahead if guests react negatively to those price hikes. Add into these unknowns the fact that park profits have served as offsets to streaming losses. 

 

For good measure, Iger apparently is not changing Chapek’s announced hiring freeze and focus on cost cutting. Again, that’s not surprising given the economic climate.

 

Creative  Questions

 

On the movies-television-streaming front, there’s been a great deal of talk about how Iger disagreed with Chapek’s distribution structure, whereby Chapek had units such as Disney Animation and Pixar make production decisions, while the distribution strategies would be centralized with the Disney Media and Entertainment Distribution division. That apparently is being undone by Iger. Whether that makes sense or not is open for debate. 

 

But bigger issues arguably are rumbling in the distance, in particular, concerns about the quality of the creatives at Disney these days. For example, Lightyear and Strange World effectively have bombed. Among questions swirling: Is quality storytelling being sacrificed for a variety of political preferences? To the degree that might be the case, there’s no evidence in Iger’s record or in his latest statements that he even sees any such problems. 

 

In addition, is Marvel’s spotty record in recent times the result of a system that resists bringing in well-established, top-notch directors, for example? Sam Raimi at the helm of Doctor Strange in the Multiverse of Madness was a rarity at Marvel these days. And on the Star Wars front, it seems like a complete crapshoot as to what new projects will look like from a quality standpoint, and how audiences will react. The lackluster response to the well-done Andor on Disney+ is a puzzle that needs to be solved.

 

And if there is a problem on the creative front, is Iger the man to deal with it given that his final stretch before leaving the company was as executive chairman focused on, as he put it, “the creative side of our business”?

 

Dealing with Politics

 

Iger has explicit political issues to deal with as well. The Walt Disney World Reedy Creek controversy is a big unknown for Disney, and Iger doesn’t seem to be up-to-speed on that yet. The Hollywood Reporter noted Iger’s recent response to the situation: “‘I had no idea what its ramifications are in terms of the business itself,’ Iger said of the move to shutter Reedy Creek, adding that he needs to learn more. ‘The state of Florida has been very important to us for a long time, and we have been very important to the state of Florida.’”

 

As for political controversy, it was noted in the Reporter story: “‘Do I like the company being embroiled in controversy? Of course not,’ he added, noting that ‘to the extent that I can quiet things down,’ he will try to do so.”

 

But there’s more. Disney has two parks in China – Shanghai and Hong Kong – and China is a communist dictatorship increasingly immersed in major controversies, from harsh treatment of its own people to threats to others, such as Taiwan.

 

Successor, Again

 

Looking further down the road, Iger has returned as a kind of interim CEO for two years, and one of his key mandates is to find the right successor. He didn’t do too well the last time with that task. We’ll see if he has a new way of thinking this time around.

 

Iger to Chapek: Why Now?

 

Amongst all of the reporting that I’ve read about Iger replacing Chapek, one issue has nagged at me. The following small excerpt, pretty much buried in a Wall Street Journal story, raises a warning sign in my mind, especially given the speed at which this all happened:

 

“Disney is moving some shows that were supposed to be Disney+ originals and air them first on other networks including the Disney Channel, people familiar with the matter said. By doing so, the costs of production and marketing of the shows — which included mystery show ‘The Mysterious Benedict Society’ and medical drama ‘Doogie Kameāloha, M.D.’ — would be shifted away from the streaming service, making its financial performance look better, they said. Ms. [Disney CFO Christine] McCarthy was concerned about this strategy, the people said.”

 

Hmmm. If other decisions by Chapek along these lines come to light, we might have an even clearer view as to why Bob Chapek got the boot, paving the way for Bob Iger’s return.

 

Disney Dealing with Same Issues Other Companies Are

 

Finally, while Chapek had to deal with a pandemic when he took the CEO reins, now Iger faces stagflation and economic uncertainty as he retakes those reins. That’s a fundamental challenge for CEOs across industries. Disney is not immune, and amidst questions about technology and streaming, this is not a new challenge. Like other CEOs, Iger will need to do the grand balancing act of maintaining profitability, cutting costs, and continuing to invest and innovate in a tough economic climate. 

 

Iger’s reputation already has taken a hit with the failure of his handpicked successor. Now, he’ll need to navigate rough economic waters, keep customers and shareholders happy, and get the right person to be Disney’s next CEO. Just another day at the office?

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? Also, Keating is a Disney shareholder.

 

Ray Keating is the author of the Pastor Stephen Grant thrillers and mysteries. Just published is Persecution: A Pastor Stephen Grant Novel. Keating says, “I think Persecution might be the most action-packed of any of the Pastor Stephen Grant books so far.”

Signed books at https://raykeatingonline.com/products/persecution  

Kindle edition at https://www.amazon.com/dp/B0BHHJNNB4

 

Two great ways to order Cathedral: An Alliance of Saint Michael Novel, which is the first in the Alliance of Saint Michael series. Signed paperbacks here and the Kindle edition here. 

 

Two great ways to order Ray Keating’s new nonfiction book – The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks here, and paperbacks, hardcovers and Kindle editions here.  

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Disney CEO Bob Chapek Gets New Contract and Vote of Confidence

 by Ray Keating

News

DisneyBizJournal.com

June 28, 2022

 

The Walt Disney Company announced today that it has extended Bob Chapek’s contract as CEO for three years. The vote by the Disney board was unanimous.

Chapek’s contract was set to expire in February 2023. The new contract extends his CEO tenure to July 2025.

 

Chapek’s time in the C-Suite has been one of many challenges – namely, guiding the company through the pandemic – various recent controversies, and a period of expanding opportunity for the company via streaming.

 

Susan Arnold, Chairman of the Board, said, “Disney was dealt a tough hand by the pandemic, yet with Bob at the helm, our businesses—from parks to streaming—not only weathered the storm, but emerged in a position of strength. In this important time of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob’s leadership is key to achieving that goal. Bob is the right leader at the right time for The Walt Disney Company, and the Board has full confidence in him and his leadership team.”

 

According to the Hollywood Reporter, “Chapek’s $2.5 million base salary will remain unchanged in the new deal, however, his annual long-term incentive stock grant will be increased from $15 million to $20 million, with 60% of that grant being performance-based RSUs.” Restricted stock units (RSUs) are compensation in the form of company shares issued via a vesting plan and distributed on set dates after reaching performance goals.

 

The Disney board recently backed Chapek’s dismissal of Peter Rice as the head of the company’s television content.

 

Chapek stated, “Leading this great company is the honor of a lifetime, and I am grateful to the Board for their support. I started at Disney almost 30 years ago, and today have the privilege of leading one of the world’s greatest, most dynamic companies, bringing joy to millions around the world. I am thrilled to work alongside the incredible storytellers, employees, and cast members who make magic every day.”

 

Many Disney fans have been less than thrilled with Chapek, and various people have already taken to Twitter (no surprise there) to declare their outrage. In the meantime, stockholders are waiting to see if Disney’s stock price will rebound after declining by 45 percent over the past year – although part of that decline obviously ties into the larger economy. The stock offered no reaction to the Chapek announcement, closing at $96.52 today.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Two great ways to order Cathedral: An Alliance of Saint Michael Novel, which is Ray’s sixteenth work of fiction, and the first in the Alliance of Saint Michael series. Signed paperbacks here and the Kindle edition here. 

 

Two great ways to order Ray Keating’s new nonfiction book – The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks here, and paperbacks, hardcovers and Kindle editions here.  

 

Get all of Ray Keating Pastor Stephen Grant thrillers and mysteries in paperback and for the Kindle at Amazon.com and signed books at www.RayKeatingOnline.com. 

 

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Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.