So you just found out The Walt Disney Co. has a new CEO. You might be a die-hard Disney fan with an annual parks pass, or you might just happen to enjoy a Marvel movie once in a while. In either case, it’s likely that the news of Bob Chapek assuming the role of CEO at Disney has crossed your timeline. But Bob Iger was already going to retire, you might note. Are we surprised or are we not? Why should we care?
Because Disney stands on the forefront of media in 2020.
Disney has the biggest films and theme parks on the planet, and is trying to conquer everything from live sports to streaming video. Who runs Disney and how they do so will have a considerable impact on our entertainment for the foreseeable future. That’s why it’s important to know about Bob.
So, we’ve put together a simple, readable primer.
Before we talk about Bob Chapek, why is Bob Iger such a big deal?
The first big thing Bob Iger did as chief executive of The Walt Disney Co. was acquire Pixar Animation Studios. He went on to acquire Marvel Entertainment, Lucasfilm, and, most recently, 21st Century Fox. His time at Disney saw him make very high-risk investments that paid off in billions and billions of dollars. You have Iger to thank for the Marvel Cinematic Universe, for the Star Wars sequel trilogy, and for the parade of intellectual property that makes up Disney Plus. To really get the full experience of Iger’s legacy, take a look at his Twitter banner, wherein classic Disney characters frolic with Bart Simpson, a Na’vi from Avatar, Black Panther, Deadpool, BB-8, and Baby Yoda.
Why did Bob Iger leave Disney?
Iger’s original contract only had him as CEO through 2018, but his tenure got extended to 2019, after which he would spend three years as a consultant. Then it got extended again through 2021. We don’t know exactly what prompted Iger to call it quits midway through the second extension, stepping back from the CEO position and assuming the role of executive chairman. He cited plans to focus on the “creative” side of the company and not the humdrum management of operations.
Wait, if we knew Iger was leaving eventually, why is this surprising?
Here’s the thing: Yes, Bob Iger was scheduled to step down in 2021, but he was still expected to remain CEO throughout that time, not yeet out after 14 months. If anything, this was supposed to be announced sometime in 2021, with Iger staying on for some time afterward to help ease in the new CEO. A random Tuesday afternoon in February is an unusual time to make an announcement of this scale, especially considering Disney had a regularly scheduled earnings call just last month.
There’s another surprising element, at least for folks who follow the industry closely. While Bob Chapek is a very reasonable choice for CEO of Disney, having been part of the company for 27 years — see more on this in a subsequent section — many experts assumed that Iger’s eventual successor would be Kevin Mayer, who is currently the chairman of Disney’s Direct-to-Consumer & International division.
Ooh, intrigue! So why did everyone assume Kevin Mayer would be the next CEO of Disney?
As Disney moves aggressively into the streaming and direct-to-consumer space, many thought that Mayer would be a natural choice for CEO, given his work on Disney Plus. But retrospectively, it’s evident that while Mayer has been crushing it in his current role, he doesn’t really have experience in other areas of the company — divisions like parks, home media, and handling IP. Chapek, though, checks off all those boxes.
Is Bob Iger leaving Disney entirely?
As Iger (repeatedly) said in an investor call following the big announcement, he will not be leaving Disney just yet. His contract continues to have him involved with Disney through the end of 2021, but he’s taking a back seat from the day-to-day management of the company and will serve as “executive chairman.” Executive chairmen guide the CEO, sharing both operational and board responsibilities. Past CEO changeovers at Disney have often involved the new CEO taking over operational duties while the old CEO remains onboard for a bit as chairman in order to ease the transition.
Iger said that taking on this role will allow him to focus more on the “creative side” and not be bogged down by operational responsibilities. Chapek will report directly to Iger through 2021.
So what did Bob Chapek do at Disney before becoming CEO?
Bob Chapek has worked at Disney for 27 years. His most recent gig was chairman of Disney Parks, Experiences and Products, but before that — between 2011 and 2015 — he was president of the former Disney Consumer Products division. Before 2011, he was president of distribution for Walt Disney Studios.
All of these roles speak to Chapek’s strength in consumer-forward products and experiences, something he says will be a great asset in this new age of direct-to-consumer businesses. But Chapek’s career also points to his savvy at packaging Disney’s growing arsenal of IP — though some might argue that that came at a cost to nurturing those varied brands.
Wait, what does chairman of whatever have to do with packaging IP?
During Chapek’s tenure of almost five years as chairman of Disney Parks, Experiences and Products, the company opened Shanghai Disney. More importantly, various Disney-owned IPs made their way into Disney Parks around the world, from full-on themed lands like Star Wars: Galaxy’s Edge to more one-note rebrands such as the Disneyland Tower of Terror’s transformation into a Guardians of the Galaxy attraction. This has made him something of a controversial figure to Disney parks enthusiasts, who feel that Chapek is more concerned with maximizing profits than maximizing guest experiences.
While president of distribution for Disney’s film division, Chapek supervised the company’s content strategy from theatrical to home release. Remember Disney’s “vault” strategy, wherein classic films were locked up and not available for purchase until a Platinum/Diamond/Super Mickey Whatever edition with two minutes of previously unseen footage was released for a limited time?
Please don’t tell me Bob Chapek invented the Disney Vault.
That’s Chapek, baby, flexing his skills at managing existing assets and packaging them up in new ways for consumers — and profitable ways for the Big Mouse in Charge. Iger even bragged about the Disney Vault during the post-announcement investor call.
“As president of home entertainment for the Walt Disney Studios, he spearheaded the highly successful vault strategy that brought Disney’s iconic films and characters to new generations of viewers,” said Iger.
Chapek comes into the role of CEO handling not just Walt Disney Studios, but Pixar, Marvel, Lucasfilm, and 20th Century Studios. That’s a whole lotta IP for him to package up in this new direct-to-consumer age. (If you’re wondering where Searchlight Pictures — the indie division formerly known as Fox Searchlight — fits in, it was acquired by Disney in the Fox deal but operates somewhat independently, outside the Walt Disney Studios umbrella.)
What does this mean for Star Wars/Marvel/Pixar/[insert personal beloved franchise here]?
As one anonymous Disney exec told The Verge, it’s unlikely that Chapek will aggressively acquire IP in the same way that Iger did. Instead, Chapek will manage the existing IP and figure out how to package it up for this new era of Disney. But no, Star Wars/Marvel/Pixar/20th Century Studios are not going anywhere — in fact, be prepared to see even more of them. Essentially, think of Chapek as the Tim Cook to Iger’s Steve Jobs.
So how much is Bob Chapek making as CEO?
Chapek’s base salary is now $2.5 million per year, according to his employment agreement as filed with the U.S. Securities and Exchange Commission. He’s also eligible for annual bonuses that will be targeted to be at the very least 300% of his salary, although the actual amount will be based on his performance. (For those of you at home, that adds up to potentially $10 million a year.)
Chapek will also be eligible for Disney’s equity-based long-term incentive compensation plan for senior executives, where he’ll get “an annual award with a target accounting award value of $15 million” — again, depending on performance and other factors. This additional compensation typically takes the form of stock options, restricted stock, performance shares, cash, and/or stock-settled performance units.
Wait, how old is Bob Chapek?
Chapek is 60, according to Disney’s SEC filing. A news story published Nov. 12, 2009, by the Northwest Indiana Times says that he was 50 at the time and that he graduated high school in 1977. That suggests that Chapek was born in 1959, and will thus turn 61 later this year. For now, though, his exact astrological sign remains a mystery.
How many times is Bob Chapek mentioned in Bob Iger’s memoir?
Iger published a memoir, The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company, in September 2019. Chapek’s name appears in it just twice. The first time is in the prologue, in which Iger recounts the moment he learned from Chapek that a child had been attacked by an alligator at Disney World’s Grand Floridian resort. The other is in the acknowledgments of the book. (For reference, Kevin Mayer appears in seven different chapters.)
Is this the first time Disney has had back-to-back CEOs with the same first name?
Yes! Congrats to both Bobs, who get to not only live out the legacy of being Disney CEO, but also embody the Two Spider-Mans Pointing meme on a daily basis. Fun fact: There are currently three separate C-suite executives at Disney named Alan.
How have CEO transitions at Disney worked in the past?
The first Disney CEO was Walt Disney’s brother, Roy Disney. The two enjoyed a similar creative-visionary-and-corporate-businessman pairing as Iger and Chapek now have. Technically, they were equal partners in position and status till after Walt Disney’s death. Roy Disney took the title of CEO two years after his brother’s passing, and even postponed his retirement to see Walt Disney World through. He retired literally right after it opened in October 1971, and died later that year.
Donn Tatum, Roy Disney’s successor, had been Disney’s production business manager, basically Roy’s right-hand man in the formation of Disney World and other theme parks. When Roy Disney died, Tatum became CEO. No drama there, though it’s notable that he was the first non-Disney family member to assume the role. Card Walker, who would become the next Disney CEO in 1976, took over as company president. This next transition also played out smoothly: Much like in the Iger/Chapek situation, Walker took over CEO duties while Tatum remained chairman for some time. When Walker’s own retirement came, he did the same thing with his successor, Ron W. Miller — though here’s where things start getting spicy.
Miller was Walt Disney’s son-in-law and not a popular choice for CEO, since he originally wanted to be a professional football player and only really started working at Disney because his father-in-law was like, Hey, I can get you into the Directors Guild, and he was like, Oh, word? After he took over in 1983, the company began to flounder. Just one year later, Miller’s cousin-in-law Roy E. Disney and two shareholders ousted him in favor of Michael Eisner, Frank Wells, and Jeffrey Katzenberg.
It gets juicier.
This brings us to Eisner assuming the position of CEO, placed there directly by Roy E. Disney in his coup. Eisner oversaw the company during the Disney Renaissance — and then into the era where the studio was pumping out direct-to-VHS sequels to its beloved animated films.
In an almost Shakespearean parallel, Eisner was himself nearly ousted by Roy E. Disney and his pals; they felt that under Eisner’s leadership, there were too many box office flops into the new millenium, too much micromanagement, and no clear succession plan. The takeover attempt didn’t quite work, but Eisner stepped down from the CEO position in 2005 — a year before his contract expired — and named Iger as his successor. He didn’t want to do it, but he did, because Disney’s board wanted him out of there.
And that brings us to Iger, who has spent the last 15 years dramatically reshaping The Walt Disney Co. before handing off the reins to Chapek. All things considered, although this announcement was sudden and Disney in this new era is vast and unknowable, Iger appears to be doing things as close to the traditional way as possible.
Despite the recent palace intrigue, Disney does have a history of peaceful transitions of power. In short, the future of Disney will depend on Bob’s willingness to work with Bob.