Bob Iger had a $10 million consulting contract at Disney – to advise the CEO he eventually replaced
Before Bob Iger returned to the helm of DisneyThe entertainment giant signed him to a $10 million contract to advise his successor Bob Chapek—although the two executives said little.
Iger, who joined the company as CEO last week after Chapek’s ouster, signed a $2 million a year contract until 2026 to advise “on matters of the future.” which his successor as chief executive may require from time to time,” according to terms disclosed in Disney. company profile reported by the Financial Times. The deal goes into effect when Iger leaves his role as executive chairman at the end of 2021.
The much-loved Iger personally chose Chapek to take over the Mouse House after he had led the company for 15 years. But after Chapek took over as CEO of Disney in February 2020, his relationship with Iger deteriorated rapidly and the Live-to-People division’s growing losses. Disney’s consumer (DTC), including Disney+, Hulu and ESPN+, which eventually led to calls for Chapek’s head.
According to Disney’s SEC filings, a five-year consulting contract that gives the company and Chapek “access to Mr. Iger’s unique skills, knowledge and experience related to the media and entertainment business” and includes includes monthly and yearly “maximum time commitments” of indefinite duration. Disney also paid Iger’s security costs as a former employee totaling about $750,000 a year. FT report.
Iger’s return rocked Hollywood and sent Disney shares up more than 6% after the announcement was made. Disney didn’t reply Luckrequest comment.
How the relationship between Bobs broke down
Iger and Chapek’s relationship started to go bad right after Chapek took the top job at Disney. According to a CNBC reportRelations between outgoing and incoming Disney leaders soured after Iger announced that he would not be leaving the company entirely in March 2020 to help the company through the pandemic.
Chapek is said to be “angry” at Iger sticking around. Expressing no desire to help, Chapek felt that Iger was once again delaying his retirement and reducing him to second-in-command.
Tensions within Disney were further aggravated in March 2022 when Chapek is silent Florida’s “Don’t Say Gay” Bill – a law that bans classroom discussion of sexual orientation or gender identity in elementary schools in the state where Chapek just ordered 2,000 of his Disney employees to move out to take advantage lucrative tax credits.
Chapek later apologized for his silent response to the bill, but it marked a marked departure from Iger’s style, where most of Disney’s views on political issues and society all derive directly from him.
Chapek then decided to strategically reorganize the company’s media and entertainment businesses by depriving content creators of budgetary power and instead centralizing it under one arm. his right, former Goldman book Bank employee Kareem Daniel. The move has taken away the profit-and-loss decision of many of Disney’s veteran division leaders and consolidated that control under Daniel, a change that has been met with backlash from longtime employees. by Disney.
Another nail in Chapek’s coffin appeared when he abruptly fired Peter Rice — the head of the company’s television division — for not fitting in with Disney’s corporate culture. While Disney’s board supports Chapek and his overthrow of Rice, Disney insiders say Moving increases morale and further divided the CEO with Disney and Iger veterans.
As tensions around Chapek increase, the relationship between the Bobs worsens, FT reported, with Iger reportedly complaining to friends that his successor did not seek his advice at key moments.
“Iger never forgave Chapek for the way Chapek separated himself and took control of the company,” a Disney executive told the newspaper. FT. “In a way, Iger thinks he will still be the coach. Chapek was unwilling.”
Iger is back after a break
Confidence in Chapek’s leadership collapsed when the CEO announced earlier this month that “difficult and uncomfortable decisionsincluding layoffs, came to the company after its Direct-to-Consumer division reported that losses more than doubled to $4 billion for the financial year ending October 1.
Iger then received a call on November 18 from board chairman Susan Arnold and two days later agreed to return to Disney for two more years to steer the ship back on track.
Iger will return to Disney with a slightly reduced salary package, which includes a $1 million base salary, a $1 million target bonus, and a $25 million stock award. This compares to an average salary package of about $47 million during his last five years as chief executive, FT report.
“Basically, he got a 40% pay cut. . . to come back,” said Tom Gosling, an executive fellow at the London Business School who founded PwC’s method of paying executives. FT “He has to love his job, love the company, or see a lot of upside in the stock price. Maybe all three.”
The first moves Iger made after being reinstated as CEO this week were to roll back Chapek’s strategy, return the benefits and losses to content creators, and fire Kareem Daniel.
This story was originally featured on Fortune.com
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