The Walt Disney Company will extend CEO Bob Iger’s deal by two years, extending his tenure through 2026.
Shares of the company were effectively flat after the news.
Iger told CNBC in February that he had no intention to stay longer than two years in his post, which would have taken him through 2024. Iger returned to Disney in November, retaking the job from Bob Chapek, who was appointed CEO in early 2020. Iger planned to prepare a his next successor during his new stint as CEO.
The succession process remains a key issue for Iger, who noted in a statement Wednesday that the board of directors of the company continues to evaluate candidates for the post. “I want to ensure Disney is strongly positioned when my successor takes the helm,” Iger said of extending his contract. “The importance of the succession process cannot be overstated.”
Iger has delayed succession decisions before, however. On four different occasions between 2013 and 2017, he extended his tenure as CEO after saying he planned to retire.
Iger’s second tenure at Disney has coincided with upheaval in the legacy media space. Big players like Disney have had to contend with a rapidly shifting landscape, as ad dollars dry up and consumers increasingly cut off their cable subscriptions in favor of streaming.
Tune in: CNBC’s David Faber will interview Iger on CNBC’s “Squawk Box” at 8 a.m. ET on Thursday.
Yet the streaming space has been difficult to navigate in recent quarters, as expenses have swelled and consumers become more conscious about their media spending. The slowdown in streaming subscribers cut valuations for Netflix, Disney, Warner Bros. Discovery and Paramount Global roughly in half in 2022 — before several of the stocks rebounded in the first half of this year along with the broader market.
Since he returned, Iger has undertaken a broad restructuring of the company, including 7,000 layoffs.
“We’ve made important and sometimes difficult decisions to address some existing structural and efficiency issues, and I’m proud of what we’ve been able to achieve together,” Iger wrote in a memo to employees that was obtained by CNBC on Wednesday. “But there is more to accomplish before this transformative work is complete, and I am committed to seeing this through.”
Disney has been pulling programming from its streaming services to save money. The company is also trying to pull its animation business out of a major rut, as its latest Pixar movie, “Elemental,” recorded the lowest opening weekend gross for the studio since the original “Toy Story” premiered in 1995.
Disney also recently finished laying off 7,000 employees and saw the departure of veteran Chief Financial Officer Christine McCarthy.
“Bob has once again set Disney on the right strategic path for ongoing value creation, and to ensure the successful completion of this transformation while also allowing ample time to position a new CEO for long-term success, the board determined it is in the best interest of shareholders to extend his tenure, and he has agreed to our request to remain Chief Executive Officer through the end of 2026,” said Mark Parker, Disney’s chairman.
CNBC’s David Faber will interview Iger on CNBC’s “Squawk Box” at 8 a.m. ET on Thursday.
Read Iger’s full memo to Disney employees:
Dear Fellow Employees,
I want to thank you for your tremendous dedication, patience, and optimism as we’ve taken important steps to reposition the company for enduring creative and financial success. Since my return to Disney just seven months ago, I’ve examined virtually every facet of our businesses to fully understand the tremendous opportunities before us, as well as the challenges we face on numerous fronts.
We’ve made important and sometimes difficult decisions to address some existing structural and efficiency issues, and I’m proud of what we’ve been able to achieve together. But there is more to accomplish before this transformative work is complete, and I am committed to seeing this through.
To that end, I’m writing to share that I have agreed to the Disney Board’s request to remain CEO for an additional two years – through the end of 2026.
As I’ve said many times since we began this important transformation of the company, our progress will not be linear as we continue navigating a difficult economic environment and the tectonic shifts occurring in our industry. This is a moment that requires us to remain steadfast, strategic, and clear-eyed about the road ahead.
It is also important to me that Disney is strongly positioned when my successor takes the helm. As the Board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful CEO transition.
Through it all, I am unwaveringly optimistic about Disney’s future. I believe in this company. I believe in the leadership team I have around me. And I believe in you – our spectacular employees and Cast Members. It’s an honor to work alongside you as we chart Disney’s path forward together, and I look forward to all that we will continue to achieve over the coming years.
Thank you for all you do,
Bob
— CNBC’s Alex Sherman, Kerry Caufield and David Faber contributed to this report
