Nov 21, 2022

Bob Iger returns as Disney CEO; Bob Chapek steps down

Bob Chapek has stepped down as CEO of Disney, leaving his former boss, Bob Iger, to take the helm of Disney once again.

Iger, who spent more than 40 years at Disney, including 15 years as CEO from 2005 to 2020, has agreed to return as CEO for two years while the company searches for a long-term replacement. Iger will assume the position with a mandate from the board to "provide strategic direction for the company's renewed growth and work closely with the board to develop a successor to lead the company after his term ends." Iger succeeds Bob Chapek, who has retired.

This move comes as a bit of a shock, though not as much as Chapek's appointment in 2020. This is because Disney's board of directors just renewed his contract this past June, which at the time seemed like a strong vote of confidence.

But now that vote of confidence is gone. In a release issued by Disney on Sunday evening, Board Chair Susan Arnold said:

We appreciate Bob Chapek's contributions to Disney over his long career. The Board concluded that Bob Iger is uniquely positioned to lead the company through this pivotal time as Disney embarks on a period of change in an increasingly complex industry.

Iger has earned the deep respect of Disney's senior leadership team, most of whose members worked closely with him until he stepped down as executive chairman 11 months ago, and is well respected by Disney employees worldwide.

Iger added:

I am very optimistic about the future of this great company and am thrilled that the board has asked me to return as CEO. Disney and its unparalleled brands and franchises hold a special place in the hearts of many people around the world. I am especially moved by the company and its employees who are dedicated to its mission. I am deeply honored to be asked to once again lead this incredible team with a clear mission focused on creative excellence, inspiring generations through unrivaled and bold storytelling.

One of Iger's main tasks in returning to his former role will be to reverse the steep decline in Disney's stock, which had tipped into its worst annual loss in decades. With Disney reporting losses in consumer streaming, a grim outlook for the company's linear channels, and stagnant growth prospects on its fourth-quarter earnings call, the returning CEO will be stepping into a bit of a hornet's nest.

Immediately following the conference call, Disney shares plunged to their lowest level in over two years, closing at $86.75 per share. This was the lowest closing price for Disney stock since March 23, 2020. However, inspired by Iger's announcement, the company's stock rose 10% in pre-market trading Monday after falling more than 40% this year.

The market's bullish reaction to Iger's return is not surprising. During his 15 years as CEO, Iger oversaw the acquisitions of Pixar, Marvel, Lucasfilm, and 21st Century Fox, which increased the company's market capitalization fivefold. [The following is the full text of Iger's note to Disney employees:

Dear Employees and Cast Members,

It is with incredible gratitude and humility that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer. It is with incredible gratitude, humility and, I must admit, a little surprise.

The creative success of the studios, Disney General Entertainment, ESPN, and International teams, the rapid growth of our streaming services, the phenomenal rebuild and revitalization of our parks, the continued great work of ABC News, and our many other accomplishments across the business, I am in awe of your achievements and excited to embark on many new endeavors with you.

I know that this company has asked a lot of you over the past three years, and these times certainly remain very challenging, but as I have said before, I am an optimist, and if there is one thing I have learned from my experience at Disney, it is that in the face of uncertainty If there is one thing I have learned from my experience at Disney, it is that even, and perhaps especially in the face of uncertainty, our employees and cast members make the impossible possible.

You will hear more from me and your leaders in the weeks starting tomorrow. In the meantime, let me express my deep appreciation for all that you are doing. Disney holds a special place in the hearts of people around the world because of you, and your dedication to this company and its mission to bring joy to people through great storytelling inspires me every day.

Bob Iger