Disney extends CEO Bob Iger’s contract through 2026, delaying retirement again

With big challenges facing the Walt Disney Co., the entertainment giant’s board has decided to keep Chief Executive Bob Iger in the top job through December 2026.

When Iger returned to the company in November, he agreed to serve as chief executive through 2024. But the company said Wednesday that board members voted unanimously to extend his contract by two years to provide “continuity of leadership during the company’s ongoing transformation,” the company said in a statement.

The move is an acknowledgment that the timeline Disney initially set for its turnaround had proved unrealistic. Hollywood veterans have long expected that Iger would stay on beyond next year. Iger has in the past delayed his retirement multiple times.

Since returning to the Burbank-based company after the brief and rocky tenure of Bob Chapek, the 72-year-old corporate titan has grappled with brush fires that have ignited seemingly everywhere.

Wall Street has grown sour on streamers owned by legacy media companies, and Disney — as well as other major entertainment firms — has racked up billions of dollars in losses building its streaming platforms and recruiting customers. At Iger’s direction, Disney is undergoing a major belt-tightening, resulting in the elimination of about 7,000 positions.

Disney’s animated movies lately have struggled at the box office, sports behemoth ESPN has been losing cable customers and the advertising market has also been weak. In addition, the company is fighting headline-grabbing political and cultural battles with conservatives in Florida.

The Writers Guild of America has been on strike since early May, and Disney and other major studios face the prospect of a walk-out this week by 160,000 members of SAG-AFTRA, the actors’ union. If that happens, it would be the first time since 1960 that the actors and writers unions would simultaneously be on strike.

Iger must tackle all these issues, while additionally figuring out how to position the streaming service Hulu for success. He faces a deadline of early next year to negotiate Hulu co-owner Comcast’s exit from the service — perhaps by coming up with at least $9 billion to buy out the Philadelphia cable company’s 33% stake. Disney must also decide what to do with its television businesses in India, which has struggled amid greater competition.

Disney is considering strategic options for the India business, the Wall Street Journal reported this week.

The CEO must also hire a new chief financial officer to replace Christine McCarthy, the respected executive who stepped down last month, on top of finding an eventual successor.

“Disney was facing two senior executive searches,” TD Cowen media analyst Doug Creutz wrote in a report to clients, noting that this was another reason that it “made even more sense” to postpone Iger’s departure.

Keeping Iger around another two years will “allow more time to execute a transition plan for CEO succession, which remains a priority for the board,” the company said in its statement.

In addition to the board, Iger’s management team also asked him to stick around, according to a person close to the company who was not authorized to comment.

“Time and again, Bob has shown an unparalleled ability to successfully transform Disney to drive future growth and financial returns, earning him a reputation as one of the world’s best CEOs,” Mark G. Parker, Disney’s board chairman, said in the statement announcing Iger’s extension.

In the release, Iger acknowledged that he had “more to accomplish.”

“I want to ensure Disney is strongly positioned when my successor takes the helm, ” Iger said in a statement. “The importance of the succession process cannot be overstated, and as the Board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful transition.”

The move tamps down, at least for now, speculation about who will replace Iger, whose previous 15-year run transformed the company with key acquisitions, including Pixar, Marvel, Lucasfilm and 21st Century Fox.

Company insiders had been closely watching whether Iger soon would turn to an outsider to run the storied company — or elevate one of his lieutenants, which could spark internal tensions with executives potentially pitted against each other.

Disney executives viewed as candidates for the top job including the co-chairmen of entertainment — Dana Walden, who runs television, and Alan Bergman, who is in charge of the movie studios — as well as Josh D’Amaro, who is chairman of theme parks and experiences, and ESPN head Jimmy Pitaro.

Iger returned to Disney after serving as chief executive from 2005 to 2020, then as executive chairman and chairman of the board through 2021.

His return last fall was applauded in Burbank and on Wall Street, because the company was reeling from Chapek’s tumultuous tenure.

Disney executives last year lost confidence in Chapek, who stepped into the chief executive role in February 2020, just weeks before the COVID-19 pandemic forced the closure of much of Disney’s operations. Theme parks were shuttered, ESPN lacked live sports to broadcast and movie theaters went dark.

Florida’s Republican Gov. Ron DeSantis also seized on Chapek’s handling of an antigay education bill in the state to accuse Disney of becoming too “woke” and alienating families. Florida made moves to take away special land-use privileges that Disney had enjoyed for 50 years in the area encompassing Walt Disney World.

The company has since sued DeSantis, claiming Florida violated its 1st Amendment free speech rights.

The company’s stock closed at $90.15 on Wednesday. The company’s stock is up about 1% this year, but is down more than 50% from early 2021, when investors were cheering Disney’s streaming gains.