Former Disney CEO Iger battled with the board, unhappy with Capek’s succession

  • When Bob Iger stepped down as Disney CEO, he planned to mentor his successor, Bob Chapek, through a two-year handover.
  • Disney’s board instead wanted to make Chapek the company’s chief operating officer before elevating him to CEO.
  • Iger disagreed with many of Capek’s moves and lobbied the board to strengthen his authority as executive chairman.

Bob Iger thought he would spend his final year as Disney CEO on a global farewell tour, saying goodbye in person to the dignitaries and employees who helped create Shanghai Disney and theme parks from Tokyo to Paris.

Instead, according to several Disney sources and others familiar with Iger’s thinking, the CEO is spending 2020 and 2021 watching as COVID-19 ravages the company he’s led for 15 years — and regretting what he calls one of his worst business decisions: choosing Bob Chapek as his successor.

The company was facing an unprecedented crisis and had two men with their hands on the wheel steering in different directions. One of them had to prevail.

In the press release announcing Chapek’s appointment, the company said the new CEO will report to Iger, now Disney’s executive chairman, and to the board (chaired by Iger). Iger’s intention was to mentor his successor, especially as the COVID crisis deepened.

But the transition didn’t go as Iger had planned, and he remains unhappy with the way it was handled, said a person familiar with his thinking.

Disney, known for its superior marketing and public relations and investor relations, began to stumble. Chapek and Iger had different ideas about how to deal with COVID, how the company should be structured, and where Disney’s policy should be. They even had different corporate consulting teams, sometimes working against each other.

Even after he finally ended his story with Disney in December, Iger found ways to voice his disagreement with Capek’s decisions and his concerns about the company’s performance. From an ugly contract dispute with “Black Widow” star Scarlett Johansson to a fight over Florida’s so-called “Don’t Say Gay” law to the departure of top executive Peter Rice, Chapek has made some notable missteps — and Iger pointed out, privately and in one instance on Twitter, his disagreement with the choice of his successor.

Last week, both men were spotted at Allen & Co.’s tycoon retreat. The two exchanged cordial greetings, but that was all, according to a person present.

Why did Iger move up in his exit timeline?

Iger’s fateful February 2020 handover of the CEO role, though expected for years (and repeatedly delayed), came as a surprise — with the wording “effective immediately” — to Wall Street and Hollywood. Paul McCartney even called his friend Iger to see if he was okay or facing an illness.

On the day of the announcement, the company’s share price fell by more than 2%. The mastermind of massive acquisitions like Pixar, Lucasfilm and Fox, Iger has driven Disney’s stock to stratospheric heights, and the company’s market capitalization has grown 400 percent during his tenure. He was expected – and contracted – to stay on as CEO until 2021.

“Bob Iger’s wish was to move the timeline up — and if COVID hadn’t happened, none of the things between [him and Bob Chapek] was going to happen,” said one Disney executive, referring to the friction that arose between the two men before Iger’s final departure. “The board was surprised; it was several months before the date of his departure.”

“He got tired of all the things you have to do,” added the Disney executive, who recalled going to Iger with mundane business problems in recent years — only to be told the boss didn’t want to commit. . “He really wanted to play creatively and not worry about all the business nonsense.”

The person familiar with Iger’s thinking disputed that, saying the CEO is still committed and simply thinks that with the successful launch of Disney+ in 2019, the company is in good shape to deliver.

In April 2020, just two months after Chapek’s promotion, Iger told the New York Times that it was still in his hands. “A crisis of this magnitude and its impact on Disney would necessarily lead to me actively assisting Bob [Chapek] and the company is struggling with it, especially after I ran the company for 15 years!” he wrote in an email to Ben Smith, then the paper’s media columnist.

Iger’s public assertion of power came as a “slap in the face” to Čapek, an executive familiar with Čapek’s thinking previously told Insider. Iger also lobbied the board, according to the Disney executive, to enforce a chain of command and have him participate in decision-making.

Three days after Smith’s Times column appeared, the board gave Chapek a directorship, with lead independent director Susan Arnold and Iger singing his praises. (Arnold would later take Iger’s place as chairman of the board.)

Two former Disney executives told Insider they were angry at their former leader for stepping down when he did. They are powerless to do anything but wring their hands as their stock prices and 401(k) plans weaken. A close associate of Iger’s told Insider that it still hurts to see Chapek tear down Disney from everything he built.

Iger’s succession planning was a ‘remarkable failure’

It was soon after the November 2019 launch of Disney+, which hit 10 million subscribers in its first day, that Iger pitched the idea to Disney’s board to speed up the succession plan, the person familiar with his thinking said.

Iger’s relationship with the board was not so rosy in the years before he stepped down. “The board bullied Bob about his succession plan, and his plan was a spectacular failure,” said a former Disney executive.

Although Iger was an extremely capable CEO, his blind spot appears to have been identifying the best person to succeed him.

Iger had lined up a series of potential successors, most prominently CFO Jay Rasullo to COO Tom Staggs, but both had left Disney by 2016. One person close to the company said former Disney CEO Michael Eisner is made life difficult during Iger’s own ascension and felt that any successor should be properly tested in battle.

Three months after Chapek’s elevation, Disney lost another executive who had been considered a candidate for CEO: the head of


streaming

Kevin Mayer, who – after a brief stint at TikTok – partnered with Staggs to create a Blackstone-backed production vehicle to acquire Candle Media.

In talks with the board in late 2019, according to a person familiar with his thinking, Iger pointed to the succession plan at Nike, where Mark Parker stepped down as CEO and became executive chairman when a new CEO stepped in . (Parker has been a Disney board member since 2016.)

Iger offered to continue to ensure there was a content pipeline for the company’s multiple distribution platforms while Chapek stepped up to run the other parts of Disney’s business, according to a person familiar with Iger’s thinking.

The board was unimpressed with Iger’s proposal and suggested that he consider making Capek COO instead, with Iger remaining CEO until he was ready to relinquish his operational duties entirely.

The board and Iger continued to field multiple candidates. But Iger pushed for Capek as CEO, the person familiar with his thinking said. After all, Čapek was in charge of two major units — parks and consumer products — and there was faith in his integrity, this person said, and that “he wasn’t going to screw it up.”

Capek was not considered a “visionary,” this person added, but neither was Iger at the start of his tenure.

The former Disney executive said that in the years leading up to his departure, Iger felt the board did not fully appreciate his leadership. “He said he was tired of being driven [succession] and said, “Okay, you’ve got somebody else running the business.”

That was Iger’s mindset when he suggested Capek, this person said, adding: “He was very sorry as soon as COVID hit.”

Disney board chairwoman Susan Arnold and other board members referred questions to the company’s in-house PR executive.

The transition of power from Iger to Čapek “was not smooth”

Iger began to regret his decision to step down, insiders said, as it became clearer with each passing week in early 2020 that COVID would bring a wrecking ball to the company. He also questioned Chapek’s restructuring, which will split the content business into two halves: “creative engines,” the company said in a statement, and a centralized distribution group.

“If he knew and understood the scope of the pandemic, he would never have stepped down when he did,” said a second former Disney executive, who cited the executive’s leadership qualities and high EQ.

Disney’s board backed Chapek rather than enforce the original agreement, which had Iger guiding and mentoring his successor.

“It wasn’t smooth sailing,” said the person familiar with Iger’s thinking. After 47 years with the company, Bob Iger felt his final years at Disney were a disappointment.

And the board’s decision to renew Chapek in June — even after a series of miscommunications and amid an ongoing political battle with Florida Gov. Ron DeSantis — appears to be an attempt to put the Iger years firmly in the rearview mirror.

While morale has been described as dire among many content-side managers, Wall Street is giving Capek the benefit of the doubt for now, counting on a recovery in the company’s parks, where margins are expanding thanks to big price jumps. After hitting an all-time high of over $200 in March 2021, Disney’s stock price has fallen 41% year-to-date.

Meanwhile, Iger continued to express his regret. He said he didn’t know Čapek was such a “newbie” when it came to dealing with complex issues like talent management and political battles, and that Čapek was arrogant and uninterested in other people’s opinions, the former executive said director of Disney. Chapek’s defenders say he has made bold moves in restructuring Disney and led massive capital spending projects at the parks. A Disney spokesman declined to comment.

“For many of us who are deeply loyal to him,” Iger’s choice of Čapek was “confusing,” this person said. “No one expected it to fall apart so quickly.

These days, Iger has been sailing and biking, including long walks around Santa Ynez and a cruise in the Panama Canal. He’s based in the Los Angeles office of ex-Goldman Sachs banker Gerry Cardinale’s RedBird Capital Partners and is investing in startups with his former Disney chief of staff, Nancy Lee. Despite pleas to join private equity firms, he prefers to strike out on his own.

“He’s still figuring it out,” the former Disney executive said. “He’s got a lot of money, he’s got great skills. I expect him to do great things. I don’t think he needs to rush.”

Iger is still fighting to beat Disney, whoever is at the helm, the person familiar with his thinking said — and friends say he’s still making notes on movies and still checking Emmy nominations and talking to company executives.

At 71, Iger is also at work and writing a second book.

The subject? Leadership in times of crisis.

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