The Walt Disney board announced Sunday it has tapped prexy-chief-operating officer Robert Iger to succeed Michael Eisner on Oct. 1.
In a separate letter Sunday, Eisner informed the board he will step down as chief exec on Sept. 30. No one had been sure when Eisner would actually leave, since his contract runs until September 2006. His contract will be paid out.
The Disney board unanimously voted to install Iger during an unusual phone session board meeting late Saturday. Sesh came one day after eBay prexy-CEO Meg Whitman withdrew her name for the Disney job.
While Disney board chair George Mitchell said during a press conference call Sunday that the board considered numerous outside candidates, it appeared likely that the board only interviewed one such contender — Whitman.
Whitman, who interviewed with the board last Sunday, was told she was the only external rival, according to people familiar with the situation. She also told others that Eisner was present for her interview.
Iger, 54, the only internal candidate considered, had long been seen as a front runner. He was publicly endorsed by Eisner and has garnered support on Wall Street.
A longtime Disney-ABC veteran, he knows the company inside and out.. Yet the suddenness of the announcement could fuel criticism over the search.
The fact that the board had been so aggressively pursing Whitman came as surprise to some industry players. Her success in branding and building eBay has been phenomenal, vaunting her onto lists of top CEOs in Forbes and Fortune. But the former Hasbro and Stride Rite exec doesn’t have broad media experience.
It’s not clear if or when board and its outside search firm Heidrick & Struggles had pursued other outsider candidates, like New Corp.’s Peter Chernin, Viacom’s Tom Freston and Les Moonves or Yahoo!’s Terry Semel – or how aggressively.
The search, which was announced by Mitchell and the Disney board last October was said to have ramped up only after the company’s annual investors meeting in Orlando and its meeting of shareholders in February – as the board didn’t want either event distracted by speculation over possible candidates and meetings.
The board said repeatedly that the process must be confidential.
Mitchell himself will be retiring next year, meaning the company will need a new chairman. It has said it is open to splitting the titles up – a move lauded by corporate governance experts – but has reserved the right to keep them joined.
Eisner himself was forced to relinquish the chairman’s title when a large number of shareholders declined to support his reelection to the Mouse’s board at the annual meeting in March of 2004.
He received nearly full support at the latest shareholder meet in Minneapolis last month.
Former Mouse directors Roy Disney and Stanley Gold, who helped orchestrate the uprising against Eisner in ’04, have been critical of the search. Last week, they slammed by process, saying they’d heard all candidates will be interviewed in the presence of Michael Eisner.
“If this is true, the practice could make a mockery of the idea that candidates should have meaningful interchanges with the non-management members of the board. Quite honestly, it would subvert the entire search process,” the duo wrote in an open letter on their website.
They also scolded the Disney board for failing to investigate allegations raised in James B. Stewart’s recent book “Disney War” that execs withheld from the board pertinent financial information regarding the costly Fox Family acquisition.
Disney fired back: “They have been consistently wrong in the past and this is nothing more than a perpetuation of a campaign of distortion aimed at advancing their own personal agenda.” The company wouldn’t comment specifically on the points raised in the letter.
Disney also pointed to the company’s strong financial performance last year, including a remarkable turnaround at ABC.
The appointment of Iger could allow the company to move forward finally following a tumultuous several years as the increasingly upbeat operating performance was clouded by embarrassing revelations in the long and public Michael Ovitz trial in Delaware Chancery Court, and the book by Stewart, which is widely read in media circles and is number five on the New York Times bestseller list this weekend.