After successfully fending off activist investors Trian Fund Management and Blackwells Capital, Disney CEO Bob Iger says the company’s main priority will now turn to identifying his successor.
“Clearly, shareholders are interested in and care very much about succession,” Iger told CNBC’s David Faber on Thursday. “It is the board’s number one priority. They’ve been spending a significant amount of time on that.”
The search is being overseen by a committee made up of board chairman Mark Parker and directors Mary Barra, James Gorman and Calvin McDonald.
“They met seven times last year, they intend to meet even more this year. They are confident they will choose the right person at the right time and they have some time to do that,” Iger added. “They’re treating it with a sense of urgency because it is so important. Clearly shareholders care about that, given what the company has been through these last few years.”
According to Bloomberg, Disney has identified four possible internal candidates: Disney Entertainment co-chairs Dana Walden and Alan Bergman, parks chief Josh D’Amaro and ESPN chairman Jimmy Pitaro. Disney could also explore the possibility of an external candidate.
Iger declined to provide a timeline for when a new successor would be identified, but emphasized that he’s “not going to be here forever.” His current contract is set to expire at the end of 2026.
“I think it’s really important to have a good transition process, you know, this is a big complicated company,” he added. “And not only is it important to choose the right person, but it’s really important to give that person all the opportunity in the world to be successful in the job, and the board’s very focused on who the person is and when the decision should be made, and essentially, how the handover of sorts will take place.”
Iger returned to Disney in November 2022 following the ouster of his successor-turned-predecessor Bob Chapek. Chapek was appointed to the CEO role in 2020, shortly before the COVID-19 pandemic ravaged the world and shut down moviegoing, TV and film production, Disney’s theme parks and live sports.
“It could not have happened at a worst moment for the company and in the world. This company was hit very, very hard and it handed my successor a set of challenges that were enormous in nature. And hopefully that will not be the case the next time around. I don’t think that there’s much more I can add in terms of the process itself or the transition,” Iger said. “We’re focused on the future, not the past at this point … because you can’t do anything about what happened. You just have to make sure it doesn’t happen again.”
In February 2023, Trian dropped a proxy fight with Disney after the company announced a restructuring. But by October of that year, shares of Disney declined to multi-year lows, prompting cofounder Nelson Peltz to launch a new proxy campaign with former Disney chief financial officer Jay Rasulo for two board seats in its “Restore the Magic” campaign aimed at improving Disney’s financial performance, which it blamed on the board’s lack of focus and accountability.
But Disney shareholders ultimately decided to keep the current board in place at the company’s annual meeting on Wednesday.
According to the preliminary results of the vote, Iger won with 94% of votes cast in his favor, while Peltz received less than a third of that at just 31%. Maria Elena Lagomasino, a current board member Trian was attempting to oust, beat Peltz by twice as many votes and Rasulo by five times as many votes. About 75% of retail shareholders voted for the Disney slate.
As of Thursday morning, Disney shares have climbed 51% in the past six months and 32% year to date. Iger disputed the idea that Trian and Blackwells’ campaigns have impacted the stock’s recent gains.
“The market is reacting to how this company is performing,” Iger said. “It was not reacting, really, to the activists.”
While reiterating that the proxy battle was a “distraction,” Iger said there was one silver lining.
“This whole process gave the board and some members of management an opportunity to engage with many shareholders, perhaps on an even deeper level, and have a good, honest, candid dialogue, where we had an opportunity to describe [to] the shareholders what our priorities are and what our various processes are, including succession. And we had an opportunity to listen to them and hear what was on their minds as well,” he said. “So I think if anything came of this from that that’s positive, is that it did in fact increase the engagement that we’ve had with shareholders in this and that’s a very good thing.”
In his own interview on CNBC’s Jim Cramer, Peltz said that he hopes Iger “can keep his promises” and that the Disney board “do all the things they assured us they were going to do.”
“We’ll only watch and wait,” he continued. “If they do it, they won’t hear from me again. If they don’t, Jim, you may be seeing me on your show next year doing this same thing again. So it’s really up to management, it’s up to the board, it’s up to whether they do what they say they are going to do, or if it’s the same old story again.”
