Hunt for Disney CEO Bob Iger's successor kicks into high gear

The board has extended Iger's retirement date five times, continually deferring decisions about finding a replacement

Reuters
Published : 4 April 2024, 05:28 AM
Updated : 4 April 2024, 05:28 AM

With Walt Disney’s months-long proxy war with activist investor Nelson Peltz in the rear-view mirror, attention is refocused on finding CEO Bob Iger’s successor.

The board has extended Iger's retirement date five times, continually deferring decisions about finding a replacement.

Disney board members sought to reassure investors, ahead of Wednesday’s shareholder vote, that this time they are taking the matter of succession seriously, as they vet internal and external candidates ahead of Iger’s new retirement date by the end of 2026.

This week, attention focused on Disney Entertainment Co-chairman Dana Walden as the current top contender, among Hollywood insiders, many of them former Disney executives or those who have done business with one of the world’s largest entertainment conglomerates.

Walden is a creative TV executive in the mold of Iger, with a string of commercial and critical successes and strong talent relationships, who has quickly adapted to the company’s culture after 25 years at 21st Century Fox, said those who have worked with her.

Other internal candidates include Disney Experiences Chairman Josh D’Amaro, an executive with Iger-like charisma whose portfolio includes the company’s most significant revenue engine, its theme parks, and ESPN Chairman Jimmy Pitaro, the likable executive who is guiding the sports network’s digital transition, according to a half-dozen high-level industry sources who know the company and its top executives.

Disney Entertainment Co-Chairman Alan Bergman, a Disney veteran who oversees film production and streaming, also may be in the running, they said.

"This has to be done better than last time, obviously," said MoffettNathanson media analyst Michael Nathanson. "They have four good candidates and they all have different skill sets. They're going to test everyone. There will be more engagement with the street, learning how these people deal with us. Over the next 12 months, it will be clear."

The company could not immediately be reached for comment.

'FLAWED SUCCESSION PROCESS'

In an emergency move, Iger returned to Disney in November 2022, just 11 months after retiring, to rescue the company from his hand-picked successor, Bob Chapek. Despite steadying the ship during the Covid-19 pandemic, Chapek antagonized an A-list actor and a Republican presidential hopeful, Florida governor Ron DeSantis, who launched a war against the entertainment conglomerate that curbed its autonomy over Walt Disney World. Meanwhile, mounting streaming losses sent the company’s stock tumbling.

The decision to bring back the former CEO signaled “a critically flawed succession process,” proxy advisory firm Institutional Shareholder Services said in its recommendation to put billionaire investor Nelson Peltz on the board.

Hollywood executives familiar with Disney’s business said the board would prefer to elevate an internal candidate, given the company's distinct culture and iconic brand. Occasionally, it has found leadership outside the Magic Kingdom, as when it hired Barry Diller protégé Michael Eisner in 1984 to revive the company.

One source close to Iger knows of no external candidates. Another source cited Candle Media co-CEO Kevin Mayer, the company’s former chief strategy officer who is serving as an advisor to Iger, as a possible outside contender.

Disney’s division chairmen are regarded as strong executives with specialized expertise. But none possess the broad experience required to run a diversified media conglomerate like Disney, said the Hollywood executives who spoke with Reuters.

Iger may elect to elevate Walden or another internal candidate to president, to provide exposure to other parts of the business, before his scheduled departure.

Past attempts to groom an heir apparent have failed, as when Iger promoted parks chief Tom Staggs to chief operating officer in February 2015, bypassing Disney's chief financial officer Jay Rasulo. Two months later, Rasulo left. By the following May, Staggs also departed the company after learning he would not become Disney’s next CEO.

A subsequent “bake-off” between parks chief Chapek and the chairman of Disney’s streaming business, Mayer, resulted in Chapek’s promotion in February 2020 -- and Mayer’s departure, months later, to briefly serve as chief executive of TikTok.

Disney’s board extended Iger’s contract through July 2, 2019, and again through 2021, to give the company time to find a successor. It did so again last July, in another bid to buy time. As Disney deals with a generational crisis, Iger may have to wait longer to repair to his 184-foot yacht, Aquarius.