The Disney chief’s contract originally called for him to give up the CEO title on April 1, 2015 but remain chairman until the end of June 2016. Under the new amendment, he will keep both jobs until the end. As a result of the change, he’ll continue to receive in the last year of his agreement the salary and target incentive compensation he receives as CEO and chairman. (He made $40.2M in compensation last year.) “Now, Disney will continue to have the full benefit of Mr. Iger’s leadership as CEO and chairman for the duration of his tenure,” the board’s Independent Lead Director Orin Smith says. “The board remains focused on effective succession planning, and will continue to develop a sound and appropriate process for ensuring a smooth management transition.” Early this year many shareholders — including advisory firms Institutional Shareholder Services and Glass, Lewis — complained that it would be hard to hold Iger accountable while he holds the two top jobs. Disney said in its proxy that Iger had done a great job and keeping him around as chairman after someone else became CEO “would put in place an effective plan for the future transition of leadership.” A proposal to separate the CEO and chairman jobs after Iger leaves was defeated at this year’s shareholder meeting.
Here’s the company’s release about Iger’s new arrangement:
BURBANK, Calif., July 1, 2013—The Walt Disney Company (NYSE:DIS) Board of Directors announced today that it has extended Robert A. Iger’s tenure as CEO and Chairman through the expiration of his contract on June 30, 2016 under his existing contractual terms as CEO.
“For nearly eight years as chief executive officer, Bob Iger has proven he has the unique ability to drive creative and financial success at the world’s preeminent entertainment company,” said Orin C. Smith, Independent Lead Director of the Disney Board. “Disney has hit new heights during Mr. Iger’s tenure, with total shareholder return of 193% that dramatically exceeds the S&P 500s 54%, and a market capitalization that has risen to $113.7 billion from $48.4 billion when he became CEO in 2005. Mr. Iger’s ability to consistently deliver against a strategy of producing high-quality branded content, technological innovation and international expansion has repeatedly resulted in record revenue, net income, and earnings per share for the company.”
Mr. Smith continued: “Given his outstanding leadership, and to provide continuity of Disney’s corporate strategy to create long-term value for shareholders, the board has asked Mr. Iger to remain CEO and chairman until the expiration of his contract on June 30, 2016 under his existing annual compensation terms as CEO, under which 92% of his pay was performance-based in fiscal 2012. Originally, Mr. Iger was to have relinquished his CEO position and transitioned to the role of executive chairman on April 1, 2015 for 15 months. Now, Disney will continue to have the full benefit of Mr. Iger’s leadership as CEO and chairman for the duration of his tenure. The board remains focused on effective succession planning, and will continue to develop a sound and appropriate process for ensuring a smooth management transition.”
“I sincerely appreciate this vote of confidence by the Board of Directors, and will continue to work with our talented and dedicated management team to drive creative excellence, innovation and continued growth,” Mr. Iger said.
Since Mr. Iger, 62, was named chief executive on September 30, 2005, he has led the company to record financial results and significant strategic growth with the acquisitions of Pixar, Marvel and Lucasfilm, major investments in the company’s Parks and Resorts business, and expansion into key international markets. During Mr. Iger’s tenure, The Walt Disney Company has repeatedly been recognized as one of the “World’s Most Respected Companies” by Barron’s, ranking No. 2 in the magazine’s just-released 2013 survey; one of the “World’s Most Admired Companies” by Fortune; and No. 1 among “America’s Most Reputable Companies” in a 2013 independent survey conducted by consulting firm Reputation Institute and published by Forbes.