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Bob Iger presented his memoir, titled The Ride of a Lifetime, in 2019 as a means of sharing the valuable lessons he acquired while leading Disney, the most successful entertainment company worldwide.
“Good leadership isn’t about being irreplaceable; it’s about empowering others to potentially take your place,” he wrote. However, Disney seems to consider Iger exceptionally irreplaceable. The board recently extended the 72-year-old’s contract until December 2026, marking 21 years since he became chief executive.
While such a long tenure at the top may be seen as an accomplishment, there’s one issue: for the past decade, Disney directors have claimed that finding a successor is a priority, yet one candidate after another has departed. Apart from Bob Chapek, who lasted for 33 tumultuous months, the only person they found to succeed Iger was Iger himself.
Today, Disney faces numerous challenges, from its Pixar studio to its ESPN sports network. However, in one aspect, it remains remarkably familiar: Iger’s contract extension resembles those granted by the board in 2013, 2014, and twice in 2017.
Once again, the directors felt the need to enhance his incentives to convince him to stay in a role that most observers believe he enjoys. This time, they replaced an annual bonus scheme, which could match his $1 million salary, with one that could be worth up to five times that amount.
During his first term, when Iger’s pay was on the rise, he could attribute it to a streak of successful hits and deals unrivaled in the media industry. However, in 2018, he faced a shareholder vote against his pay. Now that Disney’s stock has dropped by half since March 2021, justifying larger rewards may prove more challenging.
When Iger returned in November, the company stated that his main tasks were to chart a path for renewed growth and collaborate with the board in finding a successor. As a company that has already dealt with activist investors, it will need to explain to shareholders why it is rewarding him despite not fulfilling the second part of that mandate.
Critics may suspect that anyone who has been running the magic kingdom for this long has a strong attachment to the throne. However, Jeffrey Sonnenfeld, a Yale management professor who has known Iger for years, believes this is a misunderstanding. Sonnenfeld describes Iger as someone who won’t want the job when he is in his eighties, comparing him to a returning general like Steve Jobs.
Disney is not the only company struggling to find a suitable candidate to lead a media conglomerate during a time of significant disruptions to revenue streams. “The challenges are greater than I had anticipated,” Iger stated in an interview with CNBC this week, referring to the broken nature of the television business model. Few potential successors will feel confident in their ability to tackle streaming losses, Hollywood strikes, and political storms all at once.
Iger has been given more time to complete his tasks, but for him to be remembered as a great leader rather than just an indispensable one, he will need to deliver a turnaround comparable to his first-term achievements and ensure a successful succession process.
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