DIS Walt Disney Co

By Ben Fritz 

Walt Disney Co. has given itself another year to find a new chief executive.

With no clear candidate to take the helm at the world's largest media company, Robert Iger has extended his contract for a third time and will stay on at least one additional year as chairman and CEO, Disney said Thursday.

Mr. Iger's new contract runs through July 2, 2019, versus the previous expiration date of June 30, 2018.

The search process remains in an early stage, according to people familiar with the matter, making it unlikely that Disney will name a successor until sometime next year. That could give the next CEO less than a year to prepare for the job, one reason Mr. Iger has agreed to stay on as a consultant for three years following his departure, during which he will not be allowed to work at another major media company.

Disney in early 2015 named former chief financial officer and parks chairman Tom Staggs chief operating officer, making him the strongest candidate to replace Mr. Iger, people within the company believed. With few clear responsibilities, he spent a rocky first year on the job. Last March, he decided to leave after learning that Mr. Iger and the board had lost confidence in him, people close to Disney said.

That experience ended with public embarrassment for the company, which now appears loathe to repeat it. Given how close Mr. Iger's new retirement is, the company won't be in a position to offer its next CEO the years of on-the-job training that Mr. Staggs began before his abrupt departure.

No internal executives currently stand out as obvious candidates to take over Disney, people who work at the company said. The highest-profile outside candidates, such as producer and former News Corp. executive Peter Chernin, Steve Burke, CEO of Comcast Corp.'s NBCUniversal, and Facebook Inc. COO and Disney board member Sheryl Sandberg are unlikely to be offered or take the post, people with knowledge of the matter said.

Initially set to retire in 2015 and then in 2016, Mr. Iger said when his contract was extended to 2018: "This time I really mean it." But his efforts to work with a National Football League expansion team in Los Angeles didn't pan out and no successor was identified, making it less likely he would be able to step down in 2018.

"Succession is a complicated thing and the board and I felt we could use more time to not only spend on succession but to create a better transition," Mr. Iger said Thursday at a conference sponsored by the University of Southern California.

"I'm serious this time around," about retiring when his contract expires, the 66-year-old added with a laugh.

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 closed Thursday up about 0.1% at $112.24.

Also at the USC conference, Mr. Iger discussed several initiatives he said could set up the next CEO for success, including plans for new Star Wars movies for the next decade-plus and work on augmented-reality technology, which the CEO said he prefers to virtual reality because it mixes digital images with physical objects. That technology will be deployed in Disney parks, he said, along with work on new lands inspired by "Star Wars."

Much of Mr. Iger's time is also currently devoted to developing direct-to-consumer offerings that could help boost ESPN and other television networks that are losing momentum as young consumers defect from costly pay television packages.

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

Since being named 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 consumer products business and theme parks around the world.

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

"It is obvious that the Company and its shareholders will be best served by [Mr. Iger's] continued leadership as the Board conducts the robust process of identifying a successor and ensuring a smooth transition," Orin C. Smith, Disney's independent lead director, said in a statement.

--Joann S. Lublin contributed to this article.

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

(END) Dow Jones Newswires

March 24, 2017 02:47 ET (06:47 GMT)

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