Jun 29, 2022

Disney CEO Bob Chapek Announces Three-Year Contract Extension

CEO Bob Chapek, 63, has not had the best of starts as Walt Disney Company boss, but he has gotten a new contract extension to stay on for the next three years.

Contract Extension Details-According to contract details disclosed in a Securities and Exchange Commission filing, the contract extension is for three years beginning July 1. The new contract provides Chapek with long-term equity compensation of at least $20 million per year. However, most of the terms of his current contract, including the $2.5 million annual salary, remain unchanged.

How did Chapek get this position in the first place - Chapek was controversially promoted in February 2020 to replace outgoing CEO Bob Iger. Prior to becoming CEO, Chapek served as head of Disney Parks, Experiences & Products, head of Disney Consumer Products, president of distribution for Walt Disney Studios, and president of Walt Disney Studios Home Entertainment. His appointment to succeed Iger came as a surprise at the time. This was because Iger still had two years left on his contract and was not on the radar of many outsiders. Since then, insiders have rumored that Iger chose Chapek as his successor because he saw in Chapek a less charismatic peer who did not threaten his own legacy.

Chapek as CEO: The Good. Chapek's first few years as CEO were rocky, but there were extenuating circumstances. His arrival came just weeks before the company's theme parks and most of its production operations were shut down by the Covid 19 pandemic, which could have been financially devastating. However, Chapek's integration of Disney+ into the global streaming ecosystem is credited by many with keeping the company afloat during this time of adversity. Chapek helped the platform significantly exceed its subscriber growth projections without relying on popular IPs. Without this streaming success, Disney would have faced a much more difficult time during the pandemic.

Chapek as CEO: The Bad Chapek's biggest misstep to date, or at least his most publicized misstep, was his response to Florida's "Parental Rights in Education" bill, commonly referred to as the "Don't Say Gay" law. Almost all levels of Disney employees revolted when Chapek initially tried to avoid dealing with the situation altogether. Eventually, however, Chapek relented, suspending his political contributions in Florida and offering a mild apology to those who had felt let down by his previous inactivity. Early in his tenure, he was also involved in a PR battle with Black Widow Scarlett Johansson regarding her paycheck. More recently, controversy erupted when CEO Chapek fired Peter Rice, the head of the company's television content division, who many saw as a possible replacement for CEO Chapek if he were to lose his position for any reason.

Chapek as CEO: An Abomination Chapek's opposition to the Florida bill led to a feud with the state's governor, Ron DeSantis, who launched a weeks-long tirade against Chapek, Disney, and animation in general. Santis then drafted a bill that would strip Disney of its autonomy in Florida, which had been protected since 1967. Of more long-term concern is the fact that Republicans have made Disney a political point of contention.

They say:

Chapek:

It is a once-in-a-lifetime honor to lead this great company and I am grateful for the support of the board. I joined Disney almost 30 years ago and today I have the privilege of leading one of the greatest and most dynamic companies in the world, bringing joy to millions of people around the world. I am thrilled to work with the amazing storytellers, employees and cast members who make magic happen every day.

Susan Arnold, Chairman of the Board

Disney was hit hard by the pandemic, but with Bob at the helm, our business, from parks to streaming, has not only weathered the storm but emerged stronger. During this critical period of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob's leadership is key 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 leadership team.