What happened
Walt Disney (DIS -0.55%) has locked down its popular CEO, at least for a short time longer. The company extended its existing contract with Bob Iger by just over one year to July 2, 2019.
This is the third delay to Iger's retirement and quite possibly the final one. "This time I really mean it," The Wall Street Journal quoted him as saying.
Image source: Walt Disney Studios.
Iger, now 66, was named Disney's CEO in late 2005 after serving as its COO. Orin Smith, the independent lead director of the company's board, said "Mr. Iger has led The Walt Disney Company to unprecedented success during his 11 years as CEO, driving Disney to new creative heights, expanding the Company's global reach, fostering technological innovation, and delivering year-after-year of record financial results."
Does it matter?
For investors, Iger is arguably the most popular CEO in the entertainment business.
Corporate hype aside, his tenure at Disney has been very successful with a track record that speaks for itself. It was under Iger's leadership that the company acquired Marvel, Lucasfilm, and Pixar, studios that have been the source the company's most successful franchises. And despite the worrying decline of ESPN's subscriber numbers, Disney has delivered incredible returns to investors -- shares are up almost 400% since Iger took the helm.
Looking ahead, it'll be good for the company to have him in charge for at least another year (and beyond that, in a three-year advisory role as stipulated by his contract).
The biggest question, however, is who follows him. Former COO Thomas Staggs was once slated to take over, but following his resignation a year ago, there is no obvious heir apparent. So while Disney shareholders may be pleased that Iger is hanging on a bit longer, there is some understandable anxiety regarding why the multiple contract extensions have been necessary. Disney would do well to soothe those nerves by announcing a proper succession plan centered around a talented and energetic executive like the current CEO.
