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Disney's Bob Iger goes out on top

Daniel Roberts · Contributor
Updated 6 min read

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Disney shocked Wall Street at 4 p.m. EST on Tuesday when it suddenly announced that CEO Bob Iger would step down and become executive chairman, handing the CEO reins to Bob Chapek, effective immediately.

“This was somewhat of a shock to us as shareholders,” said Timothy Lesko of Granite Investment Advisors. “They’re usually much more scripted than this.”

Iger, who became CEO in 2005, had twice extended his tenure in the role. He originally aimed to step down in 2018, but in March 2017 Disney (DIS) extended his contract through July 2019; then, in December 2017, Disney extended him through the end of 2021. In his book last year “The Ride of a Lifetime,” Iger revealed that he seriously considered a 2020 presidential run, but it was Rupert Murdoch who killed that plan when he told Iger he would only agree to sell 21st Century Fox if Iger committed to staying on as CEO through 2021.

Iger will still be at Disney through the end of 2021, but as chairman, and he told CNBC that in his new role he will focus on the creative side of the company.

“As we looked at the businesses, we felt we have a great set of assets, we have a great strategy,” Iger said. “What’s next? And what was next in terms of my own priorities is making sure that the creative pipeline of the company was really rich, that all of our creative engines were working extremely well, and I wanted to spend more and more of my time on that. The only way I was able to do that was to give up the day-to-day running of the company, to pass the torch on to Bob [Chapek].”

That makes it sound like Iger isn’t going anywhere—it sounds more like he will simply shift from being the most important to the second-most important executive at the company. But it’s Chapek, who ran Disney Parks for the past five years, who will be the face of Disney to Wall Street.

There were signs that the creative side was becoming Iger’s passion. Last year, he told Businessweek that he watched every episode of the Star Wars streaming series “The Mandalorian,” which was the creative anchor of the launch of Disney+, three times for quality control: “First, to give some notes. Second, to see the rough cut and the impact of the notes. And now, just recently, I watched all the final cuts so that I could be blown away by how it looks.”

Of course, the abruptness of Iger’s resignation has led to some to question whether there is a hidden reason, like his health or some kind of imminent personal scandal. Iger said on a Disney conference call on Tuesday that is not the case. Many onlookers will still wonder otherwise. (That was also the case when Nike CEO Mark Parker suddenly stepped down last year.) “It seems like there might be more to this story than we’re hearing so far,” said Lesko on Tuesday just after the Iger news broke, though he added, “This is not a turnaround story, it’s a transition story... we expect a good transition.”

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