The Walt Disney Co. said Thursday that Bob Iger is extending his tenure as CEO again.
Set to retire from the entertainment giant in June 2018, Iger has now re-upped his contract until July 2, 2019 amid concerns among industry observers that there is no heir apparent within the company’s executive ranks.
“Leading this great company is a tremendous privilege, and I am honored to have been asked to continue serving as CEO through July 2, 2019,” Mr. Iger said in a statement. “Even with the incredible success the company has achieved, I am confident that Disney’s best days are still ahead, and I look forward to continuing to build on our proven strategy for growth while working with the Board to identify a successor as CEO and ensure a successful transition.”
The terms of his employment agreement “remain unchanged,” except for certain provisions, Disney said in a regulatory filing. His annual compensation for the extended employment period “will be determined on the same basis as his annual compensation for fiscal 2016.”
If Iger remains until July 2, 2019, he will receive a cash bonus of $5 million “in addition to an award for fiscal 2019 under the company’s management incentive bonus program,” it said. “Following the termination of his employment at the expiration date, to enable the company to have access to Mr. Iger’s unique skills, knowledge and experience with regard to the media and entertainment business, Mr. Iger will serve as a consultant to the company for a period of three years.”
He will the provide “assistance, up to certain specified monthly and annual maximum time commitments, on such matters as his successor as chief executive officer may request from time to time.”
For his consulting services, Iger will receive a quarterly fee of $500,000 for each of the first eight quarters and $250,000 for each of the last four quarters of the consulting period. “For the three years following termination of employment, the company will also provide Mr. Iger with the same security services (other than the personal use of a company provided aircraft) as it has made available to him as chief executive officer,” the filing said.
Former Disney COO Tom Staggs was considered Iger’s likely successor until his abrupt departure last spring. At the time of Staggs’ exit, the Disney board vowed to “broaden the scope of its succession-planning process to identify and evaluate a robust slate of candidates.” It has since been mum about its succession planning. At the time, industry observers mentioned Facebook COO and Disney board member Sheryl Sandberg as a possible candidate.
Disney’s stock as of 11:10 a.m. ET was up 0.7 percent at $112.88, near its 52-week high of $113.16.
“Given Bob Iger’s outstanding leadership, his record of success in a changing media landscape, and his clear strategic vision for Disney’s future, it is obvious that the Company and its shareholders will be best served by his continued leadership as the Board conducts the robust process of identifying a successor and ensuring a smooth transition,” said Orin C. Smith, independent lead director of the Disney Board.
Otherwise, experts cited industry executives who all seemed happy in their respective jobs, such as NBCUniversal CEO Steve Burke. Under the leadership of Iger, who turned 66 on Feb. 10, Disney has done well. The company has said that total shareholder return during his tenure has been nearly twice that of other entertainment conglomerates.
Iger’s latest extension marks a change of mind for the executive. He originally planned to step down as Disney CEO in 2015 after running the company for a decade. But he extended and then did so again a year later.
Back then, he said about his plans to depart in mid-2018, “I really mean it.” Succession at Disney seems a perpetually thorny going back decades when Jeffrey Katzenberg and Michael Ovitz each jockeyed to take over from Michael Eisner. When Eisner finally stepped down in 2005 it was under such strenuous conditions that even Roy E. Disney, the founder’s nephew, was publicly attacking him.
From The Hollywood Reporter