Bob Iger’s sequel as
Disney
CEO will be extended until at least 2026. Investors seem happy with the longer run time.
While continuity of leadership makes sense in the near term, it only puts off the answer to
Disney
‘s long-term succession question.
Disney stock (ticker: DIS) climbed 1.5% in early premarket trading Thursday after the media and entertainment giant announced Iger will stay for at least two more years than the length of his initial contract.
Iger, who led the company between 2005 and 2020, made a surprise return to the Magic Kingdom in November last year, replacing his handpicked successor Bob Chapek amid mounting losses in its streaming business and a prolonged slump in Disney’s share price.
Disney announced a restructuring this year, including plans to reduce costs by $5.5 billion and cut 7,000 jobs. Chairman Mark Parker said Iger has “once again set Disney on the right strategic path for ongoing value creation,” in a statement late Wednesday.
He added that to ensure the transformation was successfully completed, and allow “ample time” to develop a succession plan, it was in the best interests of shareholders for Iger to extend his tenure.
Both of those things would appear to make sense, and be of paramount importance.
Investors love an Iger announcement. The stock climbed more than 6% the day after his shock comeback was revealed. However, it has fallen 7.6% since then, as of Wednesday’s close, and is now lower than it was before Chapek stepped down.
There’s plenty of goodwill toward Iger among investors, and the initial stock reaction to his contract extension signals he’s the preferred option to see the transformation through, even if there are plenty of challenges ahead.
But eventually Disney needs to find someone other than Iger to lead the company and it needs to get the succession plan right the second time around.
Write to Callum Keown at [email protected]
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