This is a shocker: Disney says that COO Tom Staggs, the heir apparent to CEO Bob Iger, will leave the company May 6 but remain special advisor for the remainder of the fiscal year that ends in September.
The entertainment giant gave no reason for the change, and its announcement doesn’t say what Staggs will do next. His contract was due to expire at the end of June 2018. Disney shares are down 1.7% in post-market trading after the news.
The company says that the board will “broaden the scope of its succession planning process to identify and evaluate a robust slate of candidates for consideration” when Iger’s contract expires in two years.
There was no outward sign that the company had a problem with Staggs’ performance. He made $20 million in compensation for the fiscal year that ended in early October. But it appears that board members would not guarantee his eventual promotion to CEO.
Although Staggs is well known and liked on Wall Street, some believe Iger’s successor should have more experience in its core entertainment businesses — especially television. Staggs has been at Disney for 26 years, mostly handling deals and finance.
Disney shares are down nearly 17% since late November as investors became concerned about the loss of subscribers at its main cash cow: ESPN.
Staggs won the No. 2 job in February 2015, beating CFO Jay Rasulo. Staggs’ star rose at Disney in 2009 when he swapped jobs with Rasulo, who then oversaw the theme parks. That gave him a chance to run one of the company’s most important operations.
Company watchers say that there’s no obvious choice to replace Iger, and speculate that the search process may have to include executives from outside Disney.
“Tom has been a great friend and trusted colleague for more than 20 years,” Iger says. “He’s made important contributions to this company, earning wide respect across the organization for his achievements and personal integrity. I’m proud of what we’ve accomplished together, immensely grateful for the privilege of working with him, and confident that he will be enormously successful in whatever opportunity he chooses.”
Staggs returned the compliment, saying that it has been “a great experience to work with Bob during this dynamic era of unprecedented growth and transformation. I remain grateful for that opportunity, and I’m confident that Disney’s future will be just as exciting as its legendary past.”