Bob Iger, who has become synonymous with Disney over the last 15 years, stepped down as chief executive of the Mouse House on Tuesday in an abrupt departure that is raising eyebrows from Wall Street to Hollywood.
Disney said Iger, 69, has taken on a new title of executive chairman and will help lead the company’s creative endeavors until his contract runs out at the end of 2021. Bob Chapek, the 60-year-old head of Disney’s parks and products division, was named the new CEO.
The suddenness of Iger’s departure from the media empire he helped build sent Disney’s shares down 2.4 percent in after-hours trading to $125.14 as investors tried to digest the company that owns ABC, Mickey Mouse, Pixar and Marvel without Iger.
“I just can’t comprehend it,” said Rich Greenfield, an analyst at LightShed Partners. “This to me is just odd. The timing in the midst of everything is just odd.”
Greenfield said he’s concerned that Disney has named Chapek, the head of Disney’s parks, as CEO at a time when it’s seeking to transform its entertainment business to a streaming model to compete with Netflix.
“It seems strange to spend two years talking about how the focus is winning in streaming and to choose someone who does not have experience in streaming,” Greenfield said.
The suddenness of the announcement also contrasts with Disney’s past promises to provide investors and employees with a carefully laid out succession plan, watchers said.
“This caught me by surprise,” said CFRA analyst Tuna Amobi. “I know there have been questions about management succession. Over the years, Iger’s contract has been extended, but I thought we’d start to get clarity closer to 2021.”
Iger tried to assuage concerns during what the company referred to as a “short notice” conference call following the announcement of the changeover. He explained that he had been thinking about his succession plan and that the timing was “actually quite simple.”
“The company has gotten larger and the company has gotten more complex in the last 12 months. I felt with the asset base in place and our strategy essentially deployed that I should be spending as much time as possible on the creative side of our businesses,” Iger said. “What I want to accomplish before I leave the company in ’21, getting everything right creatively right would be my No. 1 goal. I could not do that if I was running the company on a day-to-day basis.”
But analysts didn’t take Iger’s matter-of-fact answer on its face and pressed multiple times on why he is departing as head of Disney.
“We felt the need was now,” said Iger, who explained that the board conducted a “thorough process” and identified Chapek and others as possible successors in order to get the transition moving.
Chapek, a 27-year Disney veteran, previously oversaw its studios and home entertainment divisions. He’s known for spearheading Disney’s strategy of suppressing the release of iconic movies in order to drum up demand and then selectively re-releasing them. He also opened Disney’s first theme park and resort in mainland China in Shanghai.
Whatever the reason for Iger’s departure, Hollywood insiders say he is leaving Disney in great shape, including a stock that was trading near all-time highs until the coronavirus fears hit.
“I think Iger is leaving on top,” one Hollywood exec said. “Coronavirus is no fun and he has been on the front lines of so much … and is too rich and successful to deal with that s–t.”