Disney CEO Bob Chapek has gotten a new long term contract as the the board meets this week. Directors voted unanimously to replace his current deal, which expires in Feb. of 2023, with a new three-year agreement starting July 1.
"Disney was dealt a tough hand by the pandemic, yet with Bob at the helm, our businesses—from parks to streaming—not only weathered the storm, but emerged in a position of strength," said Susan Arnold, Chairman of the Board. "In this important time of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob's leadership is key to achieving that goal. 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," the board said.
Chapek has been having a rough ride and some wondered whether a longer term future for him atop the media giant was in the cards. Board chairman Susan Arnold came out in support of Chapek earlier this month after an executive shuffle that included the firing of Peter Rice.
"Leading this great company is the honor of a lifetime, and I am grateful to the Board for their support," Chapek said.. "I started at Disney almost 30 years ago, and today have the privilege of leading one of the world's greatest, most dynamic companies, bringing joy to millions around the world. I am thrilled to work alongside the incredible storytellers, employees, and Cast Members who make magic every day."
Chapek, 63, was named CEO in Feb. of 2020 just as Covid shuttered the global economy. He took the reins from Bob Iger in what was a rocky transition as the former chief remained on to oversee Disney's creative businesses before exiting.
Prior to becoming CEO, Chapek headed Disney Parks, Experiences and Products. He ran Disney Consumer Products and served as president of Distribution for The Walt Disney Studios, and president of Walt Disney Studios Home Entertainment.
Chapek's promotion to the top job was a surprise to Hollywood and Wall Street since he was not well known to either. Since then he took reputational hits in a high profile legal scuffle with Scarlett Johannson and perceived waffling around Florida's Parental Rights In Education bill (dubbed Don't Say Gay). Disney became Florida Gov. Ron DeSantis' punching bag and lost a special economic zone in the state after Chapek spoke out at the annual meeting in March, but not before alienating many employees by his public silence.
The contract announced today puts to rest at least for now the issue of his ongoing tenure at Disney.
Disney stock has wobbled, along with other media shares. Recently, Disney passed on costly rights to hugely popular streaming cricket in India, a controversial move that will make it tough to meet its longer-term DTC subscriber growth targets. Lightyear , the latest film in the Toy Story franchise, disappointed. But Shanghai Disneyland is about to reopen amid a vigorous upswing in parks.
In an SEC filing, the company said the new contract calls for Chapek to be granted a long-term incentive award with a target value of "not less than $20 million annually." Also, the proportion of his long-term incentive award comprised of performance-based restricted stock units will be increased to 60%. (It noted the awards don't guarantee any minimum amount of compensation since they're based on achieving certain metrics or stock price.)
The remaining details of his new contract, including base salary, are still being worked out.
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