Walt Disney said Thursday that Bob Iger is extending his tenure as CEO again.
Set to retire from the entertainment giant in June 2018, Iger has now re-upped his contract until July 2, 2019, amid concerns among industry observers that there is no heir apparent within the company's executive ranks.
"Leading this great company is a tremendous privilege, and I am honored to have been asked to continue serving as CEO through July 2, 2019," Iger said in a statement. "Even with the incredible success the company has achieved, I am confident that Disney's best days are still ahead, and I look forward to continuing to build on our proven strategy for growth while working with the Board to identify a successor as CEO and ensure a successful transition."
The terms of his employment agreement "remain unchanged," except for certain provisions, Disney said in a regulatory filing. His annual compensation for the extended employment period "will be determined on the same basis as his annual compensation for fiscal 2016."
If Iger remains until July 2, 2019, he will receive a cash bonus of $5 million "in addition to an award for fiscal 2019 under the company's management incentive bonus program," it said. "Following the termination of his employment at the expiration date, to enable the company to have access to Mr. Iger's unique skills, knowledge and experience with regard to the media and entertainment business, Mr. Iger will serve as a consultant to the company for a period of three years."
He will then provide "assistance, up to certain specified monthly and annual maximum time commitments, on such matters as his successor as chief executive officer may request from time to time."
For his consulting services, Iger will receive a quarterly fee of $500,000 for each of the first eight quarters and $250,000 for each of the last four quarters of the consulting period. "For the three years following termination of employment, the company will also provide Mr. Iger with the same security services (other than the personal use of a company provided aircraft) as it has made available to him as chief executive officer," the filing said.
Former Disney COO Tom Staggs was considered Iger's likely successor until his abrupt departure last spring. At the time of Staggs' exit, the Disney board vowed to "broaden the scope of its succession-planning process to identify and evaluate a robust slate of candidates." It has since been mum about its succession planning.
Disney's stock as of 11:10 a.m. ET was up 0.7 percent at $112.88, near its 52-week high of $113.16. "I think the handwriting for Bob Iger's extension has been on the wall, and given his solid track record, we think this welcome development should buy some additional time to help to foster an orderly management succession, or avoid a lack of it," CRFA Research analyst Tuna Amobi told The Hollywood Reporter.
"Disney has done so well under his leadership that investors take any extension as a positive," one media investor told THR. "But the fact that the board has been looking for a new CEO for so long without success also shows how complex it is to run such a big company and how limited the pool of executives is who could run it." Disney has its studio, broadcast and cable TV operations, theme parks, as well as interactive media and consumer products businesses, making it active in more areas than such peers as Time Warner, CBS Corp. and Viacom.
Big-name entertainment industry veterans who have been mentioned as possible contenders for the Disney CEO role, from former News Corp. No. 2 Peter Chernin and NBCUniversal CEO Steve Burke to CBS Corp. CEO Leslie Moonves, have been known to be happy in their jobs and have in the past signaled no interest in going after the post.
Some have suggested that Disney board member and Facebook COO Sheryl Sandberg could end up as Disney CEO. She has sat on the board since 2009 and, according to some, previously made it known she was up for such a role that will likely never open up at Mark Zuckerberg's company. While she is seen as lacking traditional Hollywood experience, she is savvy in digital media, which could be crucial as Disney continues to navigate the digital era and challenges to the traditional pay TV business.
Under the leadership of Iger, who turned 66 on Feb. 10, Disney has done well. The company has said that total shareholder return during his tenure has been nearly twice that of other entertainment conglomerates.
"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," said Orin C. Smith, independent lead director of the Disney board.
Iger's latest extension marks a change of mind for the executive. He originally planned to step down as Disney CEO in 2015 after running the company for a decade. But he extended and then did so again a year later.
Back then, Iger said about his plans to depart in mid-2018, "I really mean it." Succession at Disney seems a perpetually thorny issue going back decades when Jeffrey Katzenberg and Michael Ovitz each jockeyed to take over from Michael Eisner. When Eisner finally stepped down in 2005, it was under such strenuous conditions that even Roy E. Disney, the founder's nephew, was publicly attacking him.
Industry observers have had different views on whether a successor as CEO was more likely to come from inside Disney or from the outside. Amobi said Thursday there was "probably a bit more chance of the latter scenario, though [I] wouldn't completely rule out the former."