The Walt Disney Co. said it has named CEO Bob Chapek to its board of directors, just weeks after being selected for the top spot and amid reports that executive chairman and chairman of the board Bob Iger has taken a greater day-to-day role in the company.

Disney named Chapek CEO in February, succeeding Iger who will remain executive chairman of Disney through December 2021. Chapek had most recently been in charge of Disney Theme Parks, and is a 27-year veteran of the company. 

"Bob Chapek has demonstrated remarkable leadership in the face of unprecedented challenges that were unimaginable when he became CEO just seven weeks ago, and we’ve watched him navigate this very complex situation with decisiveness and compassion,” the board’s independent lead director Susan Arnold and Iger said in a press release. "We are pleased to add Bob to the board, as we stated we would when he was named CEO.”

Disney has been hit hard by the COVID-19 pandemic, and has said it will furlough “non-essential” workers, most likely in its theme parks that have been closed since March and its retail operations, beginning on April 19. Company executives, including Iger and Chapek, also have taken pay cuts to ease the financial burden.

Chapek’s appointment also comes less than a week after an April 12 story in the New York Times said that Iger has reasserted control, which the chairman appeared to confirm in an e-mail message to the paper. 

“A crisis of this magnitude, and its impact on Disney, would necessarily result in my actively helping Bob [Chapek] and the company contend with it, particularly since I ran the company for 15 years!” Iger told the Times in an email message, according to the paper.

Chapek, who joined Disney in 1993, has a long history with many of the units impacted most by COVID-19. As head of the Disney Parks, Experiences and Products, Chapek oversaw the opening of Disney's first theme park in China, and led the operation of its six resorts across the U.S., Europe and Asia. He has also served as president of Disney's Consumer Products and was president of distribution at Walt Disney Studios, where he spearheaded the "vault strategy" of its classic films.

Walt Disney Co.’s top brass are biting the bullet during the COVID-19 pandemic, with executive chairman Bob Iger foregoing his $3 million salary in fiscal 2020, while newly minted CEO Bob Chapek will reduce his pay by 50%.

Chapek outlined that and other executive pay changes in a memo to employees Monday. According to the memo, Disney executives at the VP level will see their compensation reduced by 20% beginning April 5, with SVPs taking a 25% pay cut and EVPs taking a 35% cut.

“This temporary action will remain in effect until we foresee a substantive recovery in our business,” Chapek said in the memo.

Iger received total compensation of about $45.7 million in fiscal 2019, more than 90% of that through stock awards and other compensation tied to company performance. The year before, when his salary was $2.875 million, his total compensation was $65.6 million. Iger has said he will retire at the end of 2021. 

Chapek, who had been head of Disney’s Theme Parks before being named CEO in February was expected to receive about $2.5 million in salary in fiscal 2020, and could receive up to another $22.5 million in performance-related incentives.

The salary reductions come as the coronavirus continues to keep Americans confined to their homes to stem the outbreak. Disney has had to close its domestic theme parks and hotels, suspended its cruise line, halted film and TV production and theatrical content distribution, and is weathering a lack of live sports programming at its flagship cable channel ESPN. In a research note, MoffettNathanson media analyst Michael Nathanson estimated Disney would take a $1.4 billion revenue hit in fiscal Q2 and Q3 2020 as a result of the virus.

“While I am confident we will get through this challenging period together and emerge even stronger, we must take necessary steps to manage the short- and long-term financial impact on our company,” Chapek wrote in the memo.

Disney shareholders appeared to be pleased, driving the stock up about 3.5% ($3.40 per share) to $99.80 each on March 30. 

The Walt Disney Co.’s new executive chairman Bob Iger said the decision to step aside as CEO with more than a year left on his contract was one that has been a long time coming and was necessary for him to properly focus on the entertainment giant’s creative strategy.

Iger gave up the CEO title Tuesday after 15 years, passing the baton to Disney Parks chief Bob Chapek, effective immediately. Iger will remain with the company through Dec. 31, 2021, and will lead its board of directors as executive chairman.

Iger had tried to retire on at least three occasions over the past five years, but something always brought him back.  Since being named CEO in 2005, Iger has brought such iconic brands as Pixar, Lucasfilms and Marvel under the Disney umbrella. In the past year alone he has led the purchase of certain assets of 21st Century Fox for $71.3 billion and launched its wildly successful streaming service Disney+ in November.

Related: Disney Names Parks Chief Chapek as CEO

In a conference call with analysts after the market close on Feb. 25, Iger said the decision to step down now wasn’t made out of any particular sense of urgency, “other than we felt the need was now to make this change.” He added that Chapek had been singled out as his successor “for quite some time.”

Iger said after the completion of the Fox deal and the launch of ESPN+ and Disney+, the company’s asset base is in place and that the No. 1 priority is now to focus on the creative side of the business.

“Thinking about what I want to accomplish before I leave the company at the end of 2021, getting everything right creatively would be my No. 1 goal,” Iger said. “I could not do that if I were running the company on a day-to-day basis.”

Chapek, who spent the bulk of his 27-year career tenure with Disney on the studio side -- he served as president of Walt Disney Studios Home Entertainment and as president of distribution for The Walt Disney Studios before joining consumer products in 2015 -- said that he and Iger have worked closely through all aspects of the business.

“Bob [Iger] has been great in terms of giving me exposure across the many segments of the company,” Chapek said on the call. “I spent 19 years at the Studios and then moved on to consumer and then on to parks, so I had probably a fairly broad overview of how the company operates, regardless of the different industries that we work in. That said, obviously I have not spent as much time on the media side or the direct-to-consumer side, but we have some really great experienced leaders that are in place in those businesses. The way that Bob manages his direct team is we have a lot of cross fertilization. We meet every single week and discuss each other's businesses. While I certainly have an opportunity to immerse myself more inside those media businesses, I have a bit of fluency just like my peers have some fluency in our business and familiarity with the opportunities and some of the challenges that they all face.”

In a research note, Evercore ISI media analyst Vijay Jayant wrote that although the announcement was somewhat abrupt, it has been common knowledge for quite a while that Iger would step down after his employment contract was up.

“We think a quick transition makes sense and effectively eliminates the need for a transitional period, and we do not expect any meaningful strategic shifts for the company as a result of the change,” Jayant wrote.

As far as Chapek, Jayant noted that the parks chief supervised a massive capital investment that doubled the size of its cruise ship fleet and led to the construction of several theme parks around the globe. And more importantly, the 22-month lead time between now and Iger’s departure gives the outgoing CEO ample time to show Chapek the ropes.

“[T]he ~22-month lead time between now and the end of Iger’s contract gives Bob Chapek plenty of time to assume and learn day-to-day CEO responsibilities,” Jayant wrote, adding that he doesn’t anticipate any major structural changes at the company. “As mentioned, we think the abrupt nature of this evening’s press release announcing Chapek as CEO stems only from the goal of making the transition as swift and smooth as possible. We fully expect Iger to remain engaged in executing the company’s long-term strategy and note that Chapek appears to have been named CEO after a long and thorough search conducted by the company’s board.” 

The Walt Disney Co. said it has named Disney Parks chairman Bob Chapek as chief executive officer, effective immediately. The 27-year company veteran replaces Bob Iger, who will become executive chairman of the company.

The appointment of Chapek to the CEO spot solves what has been a corporate dilemma for the company for years, finding a successor to the well-respected chairman and CEO. Iger is a tough act to follow — Disney has added iconic brands like Pixar, Lucasfilm, Marvel and most recently 21st Century Fox, since he was named CEO in 2005. Iger will continue to direct Disney creative projects and will finish out the remainder of his contract, which expires on Dec. 31, 2021. As executive chairman he will also lead Disney’s board of directors.

In Chapek, Disney gets a company veteran that has served on the distribution and consumer products sides of the business. He joined the company in 1993 and has served as president of Walt Disney Studios Home Entertainment, president of distribution for The Walt Disney Studios and 2011 to 2015, he was president of the former Disney Consumer Products segment. In 2018, he was named chairman of Disney Parks, Experiences and Products.

“With the successful launch of Disney’s direct-to-consumer businesses and the integration of 21st Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” Iger said in a press release. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”

Chapek will be the seventh CEO in Disney’s nearly 100-year history.

“Throughout his career, Bob has led with integrity and conviction, always respecting Disney’s rich legacy while at the same time taking smart, innovative risks for the future,”Iger continued. His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio.”

In his new role as CEO, Chapek will directly oversee all of the Disney’s business segments and corporate functions. He will report to Iger and the board of directors. He will be appointed to the board at a later date. A new head of Disney Parks, Experiences and Products will be named at a future time.

“I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees,” Chapek said in a press release. “Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team. I share his commitment to creative excellence, technological innovation and international expansion, and I will continue to embrace these same strategic pillars going forward. Everything we have achieved thus far serves as a solid foundation for further creative storytelling, bold innovation and thoughtful risk-taking.”

There are more than 10 million reasons why The Walt Disney Co. chairman and CEO Bob Iger is Multichannel News’s executive of the year for 2019.

The first 10 million are the larger-than-expected number of people who signed up for the Disney+ streaming service on Nov. 12, the first day it was available.

Disney+ is the result of Iger, who started his career as a weatherman in Ithaca, New York, forecasting that technology was splintering the pay TV environment. The cord-cutting that resulted from viewers getting more choice about how they consume video was eating into Disney’s most profitable unit, ESPN.

“I think he’s done an incredible job of getting Disney+ off the ground,” said analyst Rich Greenfield of LightShed Partners, who is outspoken about the impending demise of the traditional TV business. “Technically, the quality of service is great and the breadth of content, especially old library content, is incredible.”

When Iger admitted on Disney’s fiscal third-quarter earnings call in 2015 that ESPN’s subscriber count was falling, the company’s stock dropped 7%. The same forces would impact the other TV businesses owned by Disney and those of its competitors.

After 13 years as CEO, Iger decided to be the disruptor instead of the disrupted. He bet the company on the idea that Disney could build a direct-to-consumer business on its trove of iconic content. His strategy was to turn Disney inside out. It stopped selling movies and shows to streaming competitors like Netflix, bought BAMTech to get a platform to launch ESPN+ and acquired 21st Century Fox to control even more content and streaming service Hulu.

Disrupting the Disruptors

With all those elements in place, Iger laid out the plans for Disney+ at an investor day held April 11 on the Burbank, California, movie lot where films like Mary Poppins were made.

“My grandparents took me to see Cinderella when I was a young boy, and just this last Christmas, I watched it with my grandchildren,” Iger told his audience. “That’s five generations of my family all entertained by the same film. And a perfect illustration of what evergreen means to us and just how much value it generates.”

While its films are timeless, Iger said it was time for Disney to find a new way to do business.

“A core tenet of ours since Walt founded the company is to create change and not just to sit back and watch it happen,” he said. “Now that’s not easy. It takes commitment, it takes perseverance, it takes patience and a lot of talent. And borrowing from one of Walt’s greatest strengths, it takes courage.”

Investors and analysts were shown the product, which would become the home for content from the company’s extraordinary brands: Disney, Pixar, Marvel, Star Wars, National Geographic, The Simpsons. It would have hit films like Avengers: Endgame, classics like Cinderella and original content like the Star Wars series The Mandalorian. They were told it would cost consumers just $6.99 a month and that the company expected it to have between 60 million and 90 million subs and turn profitable by 2024.

The next day, Disney stock jumped 12% to a then-record $130.06 per share.

By the time Disney reported its fiscal fourth-quarter earnings on Nov. 7, just days before the launch, Iger said that Disney+ was “the most important product that the company has launched” since he was in charge. Disney was “all in” and determined to “launch big and scale fast.”

Launch big and fast it did. Signing up 10 million subscribers in one day was “astounding,” said analyst Todd Juenger of Sanford C. Bernstein. “Before investor day, we were debating with investors whether Disney would get 10 million subs in the first year,” he said. “In recent months, the debate was whether Disney would be at 10 million subs when they reported fiscal first-quarter earnings in February. Nobody — not even the biggest bulls in their wildest dreams — expected 10 million signups in one day.”

According to Juenger, the launch added $18 billion to Disney’s market valuation in the four hours of trading after the company disclosed how many subscribers it had. (The company said it would not update the subscriber count until its next earnings report.)

Disney+ was not the first big bet Iger has made since becoming CEO in 2005. Iger was with ABC when it was acquired by Capital Cities and joined Disney when it purchased Capital Cities/ABC in 1995.

Picking a successor to then-Disney chairman and CEO Michael Eisner in 2005 was a difficult process, with the company going through a number of heirs apparent. Eventually Iger emerged as the only internal candidate for the top job. In a MasterClass presentation about business strategy released in November, Iger said a key part of convincing Disney’s board was outlining his priorities for the company, which he boiled down to three points: investing in creativity, using technology in ways to bring content to consumers in innovative ways and expanding internationally. “I got the job and the next step was to articulate them to the company and then ultimately to implement them,” Iger said.

A proponent of the value of brands, Iger convinced the board that Disney should buy Pixar for $7.4 billion in 2006, Marvel for $4 billion in 2009 and Lucasfilm, creator of Star Wars, for $4 billion in 2012. In 2019, those powerhouses would help Disney smash records by taking more than $10 billion at the box office, with Star Wars: The Rise of Skywalker set to open on Dec. 20.

Disney this year outbid Comcast for 21st Century Fox, paying $71 billion. After the acquisition, Iger continued to reorganize the company to emphasize streaming.

The new direction means big changes for many longtime Disney TV executives, some of whom had to leave the company following the Fox deal.

A former Disney executive who worked with Iger said that Iger is well-liked and good at getting the company to follow his lead.

“It’s one thing to go along with the company plan [and] another thing to believe it,” the executive said. “Bob’s good at that. They believe him. Everything he’s done, whether it’s Pixar, whether it’s Lucas, it’s worked out. He’s got more than the benefit of the doubt.”

That kind of communication is important to Iger. “Strategy is only as good as your ability to articulate it,” Iger said in his MasterClass presentation. “Clarity becomes incredibly important. Clarity actually is an essential ingredient to good leadership as well.

“When you lead people you need to be very, very clear about what you expect of them,” Iger added. “It’s very, very important that you communicate quite effectively with a set of people that ultimately are going to go out and implement your vision or your strategy across the company and I believe that that’s something that needs to happen. Not just once but on a constant basis.”

While Disney+ is off to a fast start, its future is not determined. IMA Research said that after five days Disney+ was up to 15 million subscribers. That compares favorably to 1.1 million subs for Apple TV+, which launched Nov. 1. On the other hand, a poll conducted by Express VPN found that 23% of Disney+ subscribers were likely to cancel within six months. If forced to choose, 35% said they’d pick Netflix over Disney+.

The streaming push also impacted Disney’s profits. Disney’s fiscal fourth-quarter earnings from continuing operations were down 72%.

“I think the unanswered question is: is Disney+ and Hulu just accelerating the collapse of the legacy ecosystem?” said analyst Greenfield. “Bob deserves credit for pivoting and finally realizing that the company had to make a meaningful shift and really lean in hard. But he still has a lot of assets tied to that legacy ecosystem. What happens to those? I don’t even know why he wants to own ESPN.”

Eyeing the End of the Ride

As for Iger’s future, the executive has already delayed his retirement to oversee the acquisition of 21st Century Fox and launch Disney+. He received $65.5 million in compensation for 2018. He was asked about how long he’d stay at the company during the Investor Day presentation in April.

“I have been CEO since October of 2005 and as I’ve said many times, there’s a time for everything and 2021 will be the time for me to finally step down,” said Iger, 68, who titled his recent memoir The Ride of a Lifetime. “I have been engaged with the board for quite some time in discussion about succession. And they’ve been engaged in a succession process, and we continue to feel that they will be able to identify my successor on a timely enough basis so that this company has a smooth transition.”

Subscriber losses at The Walt Disney Co. were about 3% for fiscal Q1, a “modest” improvement over the previous quarter and driven largely by deals the programmer has struck with emerging digital multichannel video programming distributors.

Disney has taken it on the chin over the past few years over subscriber losses, particularly at its ESPN sports network, once thought to be a must-have channel for distributors.

On a conference call with analysts to discuss FYQ1 results, Disney chairman and CEO Bob Iger said subscriber losses were rounded up to 3% in Q1, representing a slight improvement over FYQ4.

ESPN had been expected to improve its subscriber erosion largely due to new carriage deals, which in some instances include a step-up in the mandatory minimum carriage requirements for the networks.

On the conference call, Iger said there is another factor at play.     

“We’re noticing that people are coming into the multichannel world that were previously considered to be cord-nevers,” Iger said. “Clearly the lower price, the fewer channels and the more mobile-first and improved user experience are all having an impact on attracting new consumers. We believe the trends in terms of growth in the new over-the-top or digital platforms will continue and hopefully they’ll continue to offset – because the growth is getting compelling – the losses on the traditional side.”

Disney is going all-in on digital delivery of content. It is planning to drastically alter its ESPN app and its planned direct-to-consumer offering ESPN Plus, slated for a spring release, will include thousands of hours of additional live sports content and original programming for $4.99 per month. ESPN Plus will be available through the ESPN app, which will also include highly personalized scores, highlights and podcasts as well as access to live streams of all of ESPN’s networks.

It hasn’t been a good week to be Philippe Dauman.

The Viacom executive chairman and CEO is a regular target of irate shareholders who blame him for the content company’s precipitous fall over the past few years. Now, he’s even taking shots from his onetime friend and mentor, and Viacom’s largest shareholder, Sumner Redstone.

Redstone’s moves to oust Dauman and longtime Viacom board member George Abrams from the trust that will manage Redstone’s controlling stake in Viacom after his death or incapacitation has fueled mounting speculation that Dauman is being forced out.

While Dauman works hard to repair his reputation, signs point to a showdown with Redstone’s daughter and Viacom nonexecutive vice chair of the board Shari Redstone, who has been gaining influence in the trust. Lawsuits have traded back and forth: Dauman to block Redstone’s moves, Shari Redstone to have her father’s wishes upheld.

As the palace intrigue roils on, it might be time to take a closer look at Dauman’s performance by comparing his often-criticized pay package with the rise or fall of Viacom’s market capitalization over the past five years.

Related:Viacom Board Prepared to Fight

There has been much talk of Viacom’s mismanagement and how executives were more interested in cashing massive compensation checks while ignoring trends in the TV business. That is all a matter of perception, though: Few current pay TV executives could have anticipated the rise of OTT players and skinny bundles five years ago, and most didn’t.

At the same time, whether or not its youth-oriented channels make it a canary in the coal mine for the rest of the TV business, one unmistakable fact is that under Dauman and his top lieutenant, chief operating officer Tom Dooley, Viacom has faltered in the past few years.

A quick look at the stock price is evidence of that. Viacom shares are down about 25% since May 2011, shedding about $19 billion in market cap. At the same time, Dauman has received nearly $200 million in total compensation over that span and Dooley received $154 million in salary, stock-and-option awards and incentive compensation.

Since 2014, when Viacom stock was trading in the $80 range, the falloff is more dramatic. Since March 10, 2014, when Viacom shares closed at $88.90 each, the stock is down more than 50% to $39.95 on May 24, subtracting about $20 billion in market cap. Dauman and Dooley reaped a combined $145.8 million in total compensation over that period.

Dauman and Dooley aren’t the only media executives who have been criticized over their pay packages — and they aren’t even the highest paid. That distinction belongs to Discovery Communications CEO David Zaslav, who has received $324.1 million in total compensation in the past five years, skewed mostly because of one-time awards in 2014 that inflated his total pay to $156 million that year. Viacom’s sister company CBS was second, with chairman and CEO Les Moonves receiving $313 million in total compensation in the past five years.

But while Disney chairman and CEO Robert Iger received $199 million in total compensation between 2011 and 2015, for instance, Disney’s market cap soared 144.6% from $41.1 billion to $100.5 billion. CBS is up 105.6% to $54.2 billion from $26.4 billion in 2011; 21st Century Fox is up 69.6% to $28.9 billion from $17.1 billion in 2011; and Discovery is up 23% to $26.8 billion from $21.8 billion in 2011. Viacom’s market cap has fallen from about $35 billion in 2011 to $16.7 billion as of May 25.

Whatever the outcome, some analysts believe Dauman’s days are numbered. In a research note last week, Telsey Advisory Group media analyst Tom Eagan charted out several scenarios that ultimately end with Dauman’s ouster.

In a piece titled “Jersey Shore Has Nothing on This,” Eagan noted board changes at Viacom and National Amusements (the vehicle that holds Redstone’s Viacom stock). “We expect that Sumner and Shari Redstone will attempt to make changes in Viacom executive management, chiefly replacing CEO and chairman Phillippe Dauman,” Eagan wrote. “Although Mr. Dauman has the support of the Viacom board, we expect changes in that board.”