In a stunning shakeup Sunday night, Disney gave CEO Bob Chapek the boot and brought back his popular predecessor, Bob Iger, to steer the ship. It’s a shocking reversal from less than five months earlier when Disney called Chapek the “right leader at the right time.”
Disney’s 15-year CEO Iger had handpicked Chapek, who was head of parks, as his successor back in February 2020. Iger stayed on as executive chairman through 2021 to help with the transition but reports came out that he became increasingly frustrated with the new CEO. Disney announcing Iger’s return to the chief position means the boomerang CEO was only separated from the company for less than a year. His current plan is to stay for two more.
Chapek’s rise and fall
Chapek’s tenure was tumultuous from the start, with the global pandemic forcing nationwide lockdowns less than a month into his job. But while Chapek scored a series of wins during his two-plus years – overseeing a full rebound of park attendance and consistent growth in streaming – his loss column weighed heavier.
First, it was his high-profile fight with Black Widow star Scarlett Johansson over a pay dispute. Then, it was his complete botched response this last spring to Florida’s so-called “Don’t Say Gay” legislation, which prompted employee walkouts and fired up Florida’s Republican Gov. Ron DeSantis, who retaliated by stripping away Disney’s special tax status in the state.
But even after those two headline-making gaffes, Disney’s board gave Chapek a unanimous vote of confidence by renewing his contract for another three years in June, even though his previous contract wasn’t set to expire until February 2023.
“Disney was dealt a tough hand by the pandemic, yet with Bob [Chapek] at the helm, our businesses – from parks to streaming – not only weathered the storm, but emerged in a position of strength,” Disney’s board said at the time. “Bob is the right leader at the right time for The Walt Disney Company, and the Board has full confidence in him and his leadership team.”
That sentiment would last not even five months. Now Disney is on the hook for paying out his 3-year contract and more, totaling at least $23 million in walk-away compensation, according to Bloomberg.
The bottom line
After surviving all of those controversies, Chapek’s dismissal comes less than two weeks after investors learned Disney’s streaming service lost $1.47 billion in the fourth quarter, despite adding 12.1 million new subscribers. The loss more than doubled the figure from a year earlier and was far greater than analysts anticipated.
The company announced cuts to marketing and content budgets to get in line. But on the Nov. 8 earnings call, Chapek remained cheery in his outlook and was even described as “happy go lucky.” This tone prompted calls to fire him as the stock fell 12% after the call. Year to date, Disney shares were down more than 40%.
Now Iger is back in, the unicorn CEO who just can’t quit Disney. The company announced Iger will be in the seat for two years with two goals: get back on the growth track and find another successor. Disney’s stock jumped 9% in premarket trading Monday before settling up 6% by market close.