The company’s board on Nov. 20 announced that it was replacing Chapek with former CEO Bob Iger for a two-year term. In a proxy statement filed Tuesday, Disney provided a detailed timeline of the events that culminated with Chapek’s termination, Iger’s appointment as interim CEO and activist investor Nelson Peltz’s attempt to join the company’s board.
The Disney board “determined that Mr. Chapek was no longer the right person to serve in the CEO role” in the months following its renewal of Chapek’s contract in June 2022, according to the company’s proxy filing Tuesday. “The significant developments and change in the broader macroeconomic environment over this period informed how the board viewed the appropriate leader in light of the rapidly evolving industry and market dynamics. The board therefore concluded that, as Disney embarks on an increasingly complex period of industry transformation, Mr. Iger is best situated to lead the company while an appropriate longer-term successor is identified.”
For Disney’s fiscal year ended Oct. 1, 2022, Chapek’s compensation package included his base salary of $2.5 million; $10.8 million in stock grants; $3.75 million in stock options; a $6.75 million cash bonus; $282,762 for personal air travel; and $53,820 in other compensation.
Chapek’s severance payments, subject to him successfully completing “all of the terms of his post-employment consulting agreement” will comprise $6.53 million cash in remaining base salary through the scheduled expiration date of his amended employment agreement and about $1 million equivalent to a pro-rated target bonus for fiscal 2023, per the proxy filing. In addition, with his termination, Chapek is eligible to receive accelerated Disney stock worth $12.7 million.
Disney also revealed cash severance payments totaling $4 million due to Geoff Morrell, former SVP and head of corporate affairs, whom the media company fired in April 2022 after less than four month following a series of PR debacles. Morell was not entitled to termination payments during fiscal 2022 but if he meets the terms of his post-employment consulting agreement he is entitled to $2.5 million in remaining base salary through the end of his original employment agreement and $1.5 million equivalent to a target bonus for fiscal 2022, per Disney’s filing. In addition, Disney has agreed to buy out the home Morrell purchased in Southern California but “in no situation will Mr. Morrell monetarily benefit from the sale of the property.” As of the filing of date of the proxy statement, the property has not been sold.
For fiscal year 2022, Morrell’s compensation was $8.37 million, which included $500,000 for the cost of the international relocation of his family and a $2.75 million signing bonus “primarily to replace foregone compensation from his previous employer,” according to Disney’s proxy statement. Morrell was previously EVP of communications and advocacy at oil and gas giant BP.
In November, Disney disclosed that Iger’s pay package for his return as CEO is worth up to $27 million per year. Iger had previously retired from Disney effective Dec. 31, 2021; he was eligible for a 2022 pro-rated bonus per his employment agreement for services during fiscal year 2022, and the company awarded Iger a bonus of $4.37 million.
In bringing Iger back as CEO, the Disney board said it had given him a mandate “to set the strategic direction for renewed growth and to work closely with the board in developing a successor to lead the company at the completion of his term.”
Iger, as Disney’s chief executive officer for 15 years, led the acquisitions of Pixar, Marvel, Lucasfilm and 21st Century Fox and increased the company’s market capitalization fivefold. Iger had headed Disney’s creative endeavors until his departure as executive chairman in December 2021, and “the company’s robust pipeline of content is a testament to his leadership and vision,” the board said.