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Walt Disney CEO Robert Iger‘s contract has been extended through June 2018, the company announced Thursday.
Without the extension, Iger was set to retire in the middle of 2016, but the board of directors seemed anxious not to let that happen given Disney’s success since he replaced Michael Eisner as CEO in 2005. Since then, Disney shareholders have seen total returns of 311 percent, far outperforming returns of 92 percent posted by the S&P 500 in the same time frame.
Insiders say Iger’s decision to remain atop Disney for an additional two years could put to rest speculation that he’s interested in a run at California governor. The CEO, though, will only be 67 when he retires, so a political career isn’t out of the question.
Iger previously extended his contract 16 months ago so that he wouldn’t miss milestones like the release of Star Wars: Episode VII on Dec. 18, 2015 and the opening of Shanghai Disney Resort late next year.
Still unresolved is who will replace Iger when he retires in 2018. Sources say, though, that Iger’s plan is to name a COO next year and groom the executive for the CEO spot. Disney has been without a COO since Iger was promoted from that spot in 2005.
The likeliest candidates for COO — and therefore CEO four years from now — are parks and resorts chairman Thomas Staggs and CFO Jay Rasulo.
Iger’s base salary is expected to remain the same under his extended contract, as will his targets, bonuses and incentives, so his compensation can vary significantly from year to year. In fiscal 2012, Iger earned $40 million and a year later it was $34 million.
Disney’s regulatory filing is expected Friday, though the company has already announced Iger’s extension not only via press release but also on its blog.
“Bob Iger is the architect of Disney’s current success, with a proven history of delivering record financial results for the company quarter after quarter and year after year,” said Orin C. Smith, independent lead director of the Disney board. “Under his tenure, Disney has reached unprecedented creative and financial heights, driving the stock price to record levels and creating extraordinary value for shareholders. He has transformed Disney’s culture and empowered its businesses to effectively capitalize on evolving markets and new technologies, making Disney a company that doesn’t merely embrace change, but leads it.”
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