Disney just gave itself a little more time to find CEO Bob Iger’s heir apparent: It made the expected announcement that it has extended his contract one year to July 2, 2019.
“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,” Independent Lead Director Orin Smith says.
Iger, 66, says he plans to “build on our proven strategy for growth while working with the Board to identify a successor as CEO and ensure a successful transition.”
Iger is one of the nation’s highest paid CEOs; he made $43.9 million in the fiscal year that ended in September. His new deal will extend the current terms, and give him an additional $5 million bonus if he stays to mid-2019, according to an SEC filing.
In addition, the board changed the standards it will use to determine his bonus. It says that Disney’s stake in Hulu is “projected to continue to have a net adverse impact” on the company’s operating profits — one of the benchmarks to determine Iger’s success.
As a result, the board will “make such adjustments as it deems appropriate” to make sure the losses don’t hurt Iger’s pay. That’s to ensure that the Iger doesn’t feel “an unintended incentive or disincentive” when making decisions.
The CEO agreed to serve as a consultant for three years after the term expires. He’ll be paid $2 million a year for two years, and $1 million for the third year.
Disney will continue his security services when he becomes a consultant, but won’t let him continue to use the corporate jet for personal trips.
If the company decides to end his tenure before the end of the new contract — except for cause — then Iger would still be able to collect the bonus, and begun the consulting term immediately.
Iger pretty much signaled that he planned to stay past mid-2018 when he acknowledged, in a call with analysts last month, that he was “open” to the possibility.
Questions about Iger’s plans have percolated since last year when then-COO Tom Staggs — seen as his heir apparent — resigned. In May, after the announcement, Iger told analysts he did not “currently have any plans to extend” his stay past June 2018 adding that the board was “very actively engaged in a succession process as it has been actually for some time.”
But nobody’s been named yet — and many investors believe that 15 months is not long enough for the company to groom someone to take over.
This is the fourth time since 2011 that Disney has extended Iger’s term. At the time the board agreed to keep him to mid-2016, with a controversial deal to make him chairman as well as CEO until 2015 when he was to turn the CEO title over to someone else. In 2013 it changed to terms to keep him in both positions for the full term. In late 2014 it moved the end date to mid-2018.
Iger has been rumored to be contemplating a presidential run in 2020.
Must Read Stories
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.