Disney chairman-CEO Bob Iger has extended his contract as the company’s chief executive by one year, through July 2, 2019, a move that had been expected as Disney continues its long search for his successor.
“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, who is the lead independent director of Disney’s board.
The pact calls for Iger to serve as consultant to Disney for three years following his exit as CEO. He’s held the top job at the Mouse House since succeeding Michael Eisner in early 2005.
“Mr. Iger has led the Walt Disney Company to unprecedented success during his 11 years as CEO, driving Disney to new creative heights, expanding the company’s global reach, fostering technological innovation, and delivering year-after-year of record financial results,” Smith said. “During his tenure, Mr. Iger has created enormous value for shareholders, with total shareholder return of 448%, compared to 144% for the S&P 500, and a dramatic increase in the company’s market capitalization to $177 billion from $46 billion.”
Iger signaled his inclination to extend his tenure at the top last month when pressed by Wall Street analysts during Disney’s quarterly earnings call. The Disney board has been searching for a successor CEO for more than two years. A few years back, Iger had laid out his plan to step down as CEO in 2016, but in 2014 his term was extended by another two years, through June 2018.
Disney had two candidates in the running for Iger’s job, former top execs Jay Rasulo and Tom Staggs. Staggs gained an advantage in early 2015 when he was promoted to the chief operating officer post, making him Iger’s apprentice. But Staggs left after just a year when it became clear the Disney board was not prepared to promote him to CEO. Rasulo, the former CFO and parks division head, left the company after being passed over for the COO promotion.
Since Staggs’ departure, there’s been no clear internal or external frontrunner for the job. With the clock ticking, it was a fait accompli that Iger would set another contract extension, given the complexities of running the world’s largest media company.
“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,” 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.”
In addition to his regular salary, Iger is scheduled to receive a $5 million bonus in 2019 for sticking around another year, according to a Securities and Exchange Commission filing Thursday. When he shifts to consultant mode, he’ll earn $500,000 a quarter for the first two years, and $250,000 per quarter for his third year, per the filing.