Disney extends CEO Bob Iger’s contract

The Walt Disney Company will extend CEO Bob Iger’s contract by two years, extending his tenure to 2026.

The company’s shares were virtually unchanged after the news.

Iger told CNBC in February that he had no intention of staying in office for more than two years, which would have taken him to 2024. Iger returned to Disney in November, taking over from Bob Chapek, who was named CEO in early 2020. Iger planned to prepare his next successor during his new tenure as CEO.

The succession process remains a key issue for Iger, who noted in a statement Wednesday that the company’s board continues to evaluate candidates for the position. “I want to make sure Disney is in a strong position when my successor takes the helm,” Iger said of the contract extension. “The importance of the succession process cannot be overstated.”

However, Iger has delayed succession decisions before. Between 2013 and 2017, he renewed his tenure as CEO four times after announcing his retirement.

Iger’s second tenure at Disney coincided with a shift in legacy media. Big players like Disney have had to grapple with a rapidly changing landscape as advertising dollars dry up and consumers increasingly ditch their cable subscriptions in favor of streaming.

Turn on: CNBC’s David Faber will interview Disney CEO Bob Iger on Thursday at 8 p.m. ET on CNBC’s show “Squawk Box.”

Still, the streaming space has been difficult to navigate in recent quarters as spending has increased and consumers have become more conscious of their media spend. The drop in streaming subscribers cut the valuations of Netflix, Disney, Warner Bros. Discovery, and Paramount Global by about half in 2022, before some of the stocks rallied along with the broader market in the first half of this year.

Since his return, Iger has undertaken a major restructuring of the company, including 7,000 layoffs.

“We made important and sometimes difficult decisions to address some existing structural and efficiency issues, and I am proud of what we have been able to achieve together,” Iger wrote in a memo to employees obtained by CNBC on Wednesday. “But there is still more to be accomplished before this transformational work is complete and I am fully committed to completing it.”

Disney has removed programming from its streaming services to save money. The company is also trying to pull its animation business out of the slump, as its latest Pixar film, Elemental, posted its lowest opening weekend gross for the studio since the original Toy Story premiered in 1995.

When Disney recently finished laying off 7,000 employees, veteran CFO Christine McCarthy also left.

“Bob has once again put Disney on the right strategic path for continued value creation. To ensure the successful completion of this transformation while allowing adequate time to position a new CEO for long-term success, the Board has determined that the company is in excellent shape.” “We are in the interests of shareholders to extend his tenure, and he has approved our desire to remain chief executive officer through the end of 2026,” said Mark Parker, Disney CEO.

CNBC’s David Faber will interview Iger on Thursday at 8 p.m. ET on CNBC’s show “Squawk Box.”

Read Iger’s full memo to Disney employees:

Dear Colleagues,

I want to thank you for your tremendous dedication, patience, and optimism as we took important steps to reposition the company for enduring creative and financial success. Since returning to Disney just seven months ago, I have examined virtually every aspect of our business to fully understand the tremendous opportunities we face, as well as the challenges we face on numerous fronts.

We have taken important and sometimes difficult decisions to address some existing structural and efficiency issues and I am proud of what we have been able to achieve together. However, before this transformational work is complete, there is still more work to be done, and I am fully committed to completing it.

To that end, I am writing to let you know that I have approved the Disney board’s proposal to remain CEO for an additional two years, through the end of 2026.

As I have said many times since we began this important business transformation, our progress will not be linear as we continue to navigate a difficult economic environment and the tectonic shifts in our industry. This is a moment that requires us to remain steadfast and strategic, with a clear view of the path ahead.

It’s also important to me that Disney is in a strong position when my successor takes the helm. As the Board continues to evaluate a range of highly qualified internal and external candidates, I remain intensely focused on a successful CEO transition.

Despite all of this, I remain unwaveringly optimistic about Disney’s future. I believe in this company. I believe in the leadership team I have around me. And I believe in you – our spectacular staff and cast. It’s my honor to work with you as we chart Disney’s future path together, and I look forward to all that we continue to accomplish in the years to come.

thank you for everything you do

— CNBC’s Alex Sherman, Kerry Caufield, and David Faber contributed to this report.

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