Disney’s board of directors has voted unanimously to extend CEO Bob Chapek’s contract by three years, the company announced yesterday. His current contract was due to expire in February 2023. Despite a chaotic tenure that began at the height of COVID, the new three-year deal will start on Friday, July 1.
“Disney has been hit hard by the pandemic, but with Bob at the helm, our businesses – from parks to streaming – have not only weathered the storm, but emerged into a position of strength. In this important time of growth and transformation , the Board of Directors is committed to keeping Disney on the path to success it is on today, and Bob’s leadership is critical to achieving that goal. Bob is the right leader at the right time for The Walt Disney Company, and the board has full confidence in him and his management team,” Susan Arnold, chair of the board, said in a statement.
The extension is Chapek’s chance to prove to the board, Wall Street and subscribers that he is capable of running a streaming business in this unpredictable climate and that he can overcome any difficulties the company faces. company has faced, including a 38% inventory loss since the start of the year. .
Disney stock swung more than its rivals. Netflix shares fell more than 20% after losing 200,000 subscribers in the first quarter of 2022. Following the announcement of the new contract, Disney shares rose 0.56% at the end of the session to reach 96.46 $. The low for the year was $92, and last fall it was $186.
Chapek felt pressure to follow in the footsteps of former Disney CEO Bob Iger. Iger had been the CEO of Disney since 2005 and is highly respected in Hollywood, particularly for acquiring Pixar, Marvel and Lucasfilm properties.
It’s no secret that the new CEO hasn’t necessarily been welcomed with open arms. In September 2021, Chapek embarrassed Iger, who was still president at the time, when the new CEO was in a legal tussle with Disney+ “Black Widow” star Scarlett Johansson. Since then, the relationship between Iger and Chapek has been separated.
More recently, he managed to frustrate employees with his initial lack of response to Florida’s anti-gay bill and the recent firing of Peter Rice, Disney’s top television content manager.
Chapek apologized for his silence on the bill after being criticized by Disney cast members who felt insulted by the decision. The chief executive publicly opposed the bill and announced the donation of $5 million to LGBTQ rights organizations. It was reported by accountability news site Popular Information that the Walt Disney Company previously donated more than $200,000 to politicians who sponsored Florida’s “Don’t Say Gay” bill.
Peter Rice, who oversaw Disney’s General Entertainment Content division and was supposed to replace Chapek, was fired earlier this month. According to The New York Times, sources report that he didn’t fit the company’s “corporate culture.”
Earlier this month, Disney made a controversial move and handed over the broadcast rights to popular Indian Premier League cricket, which will make it harder for Disney’s Indian streaming service Hotstar to retain subscribers. . The sporting event helped Hotstar gain millions of subscribers and break several world streaming records. The company was outbid by Viacom 18 and Times Internet.
The general manager also hit some big milestones during his time at Disney. He has worked for the Walt Disney Company for nearly 30 years and is its seventh CEO. Previously president of Disney’s Parks, Experiences and Products division, Chapek held a precarious position in 2020 when the pandemic forced movie theaters and theme parks to close. Despite these divisions’ low revenue, the company’s newest streaming service, Disney+, has seen success with shows “The Mandalorian,” “The Book of Boba Fett,” “Obi-Wan Kenobi,” and “Loki.” “, among others. The streaming service also announced that it will be getting a new affordable ad-supported tier this year, which will likely attract new subscribers.
While Chapek is bold for his goal of reaching 230 million to 260 million Disney+ subscribers by 2024, the service may still be on track. At the end of Disney’s fiscal second quarter, Disney+ had more than 137.7 million subscribers.
Bob Chapek said, “Leading this great company is the honor of a lifetime, and I am grateful to the Board of Directors for their support. I started at Disney nearly 30 years ago and today I have the privilege of leading one of the largest and fastest growing companies in the world, bringing joy to millions around the world. world. I’m thrilled to work alongside the amazing storytellers, employees, and cast members who make magic happen every day.
Details of his new contract, including base salary, are still in the works. In a filing with the SEC, the company said the new contract would provide Chapek with a long-term incentive award with a target value of “at least $20 million per year.” In addition, the proportion of his long-term incentive award made up of performance-based restricted share units will be increased to 60%. According to the SEC filing, the rewards do not guarantee any minimum amount of compensation.