DIS Walt Disney Co

By Ben Fritz 

Walt Disney Co. has given itself an extra year to solve its succession challenge.

With no clear candidate to take the helm at the world's largest media company, Robert Iger will stay on at least one additional year as chairman and chief executive, Disney said Thursday.

The company's board said Mr. Iger's new contract runs through July 2, 2019, versus the previous expiration date of June 30, 2018. The change marked the third time Mr. Iger's tenure has been extended.

Initially set to retire in 2015 and then in 2016, Mr. Iger said when his contract was extended to 2018 that "this time I really mean" to retire.

The Wall Street Journal reported last month that Disney's board was considering extending Mr. Iger's contract. Investors appeared to shrug off Thursday's announcement; shares ticked up about 0.3% in midday trading to $112.43.

An earlier succession plan was thrown into disarray last March when the company announced the abrupt departure of a senior executive widely viewed as Mr. Iger's heir apparent. Tom Staggs, a veteran executive who was named chief operating officer in 2015, quit after learning the board, including Mr. Iger, had lost confidence in him, according to people familiar with the matter. The company had never publicly said Mr. Staggs was on track to succeed Mr. Iger, but numerous people close to the company believed that was the case.

Mr. Iger's contract extension calls for his compensation in fiscal 2019 to be determined on the same basis as fiscal 2016. However, he will also receive a $5 million bonus if he stays until July 2, 2019. The extension also calls for Mr. Iger to serve as a consultant to Disney for three additional years, earning $2 million for each of the first two years and $1 million for the third.

"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," Mr. Iger, 66 years old, said in a statement.

As the months ticked after Mr. Staggs's departure was announced, Disney executives and observers alike expressed similar conclusions: no potential successor, inside or outside the company, would likely be able to get up to speed on the sprawling media and entertainment empire in time to take the reins by the middle of 2018.

Since being name CEO in 2005 Mr. Iger has led Disney through a period of sustained growth, including acquisitions of Pixar Animation Studios, Marvel Entertainment and Lucasfilm, the studio behind the Star Wars films. Those acquisitions have helped make Disney's movie studio the most successful in Hollywood, and have also provided material for its theme parks around the world.

However, the company's main economic engine, a massive television operation dominated by sports giant ESPN, has show signs of strain lately, threatened by cord-cutting and rising costs for the sport-rights deals. Mr. Iger will now have another year to grapple with those challenges, though they will likely be waiting for any successor, too.

Disney says total shareholder return during Mr. Iger's tenure has been nearly twice as high as other large media conglomerates.

"Everyone would be happy with Bob Iger continuing to be the CEO," Dan Salmon, a managing director at BMO Capital Markets, told The Journal last month. "But it would just push out the issue we're dealing with today."

--Joann S. Lublin contributed to this article.

Write to Ben Fritz at ben.fritz@wsj.com

(END) Dow Jones Newswires

March 23, 2017 14:55 ET (18:55 GMT)

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Mar 2024 to Apr 2024

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Apr 2023 to Apr 2024