Examining Reasons Why Bob Iger May Have Quit as CEO
I’m not one for conspiracy theories. On the contrary, the moment somebody starts talking about secret societies and hidden government facilities, I stop making eye contact and back away slowly. I think most of us are like that. However, speculation is sometimes unavoidable.
For example, Robert Iger spent the body of five years trying to find a logical successor as CEO of The Walt Disney Company. Then, on a random Tuesday, he suddenly announced that Bob Chapek would replace him starting immediately.
This turn of events confused everyone, and it’s caused people to wonder…loudly. A few theories have emerged that at least merit consideration. Let’s examine the possible reasons why Iger may have suddenly quit Disney.
Upcoming Financial Struggles
Here’s the conspiracy theory that gets passed around the most. A few (loud) critics believe that Disney’s in trouble. They feel that a conflagration of events will cause the company to struggle mightily in fiscal 2020 and 2021.
Within hours of the announcement, Disney closed its third theme park, Tokyo Disneyland, due to Coronavirus concerns. Now, The Oriental Land Company owns and operates the Japanese version of Disneyland. Still, Disney receives lucrative licensing rights from the deal.
Combined with closures at Hong Kong Disneyland and Shanghai Disneyland, Disney’s currently out a lot of theme park revenue. However, I must stress that this is a trivial concern relative to the suffering of thousands of infected patients. It’s financially inconvenient for Disney’s new CEO, Bob Chapek, but it’s a living nightmare for many.
With the virus impacting tourism, some observers whispered rumors that the Board of Directors isn’t happy with the early returns from the Fox deal. Now, I think that’s utter nonsense, as these pieces have anchored Disney+, whose launch is successful beyond Iger’s wildest dreams.
Still, the criticism centers on the movie division, where almost all Fox movie projects have failed. I cannot disagree with that, but I also believe it’s a sunk cost. Meanwhile, The Simpsons has become the dominant force on Disney+. It wouldn’t be an option on the channel without the Fox deal.
This critique involves Disney+, too. Some wonder whether the service has done as well as Disney has claimed. Now, that’s an ignorant criticism, as executives have stated numbers in the earnings report and accompanying conference call. Disney would violate federal law if they lied about such matters.
So, I don’t buy that Chapek is a fall guy. Besides, Iger’s is still working through 2021. Any financial struggles would look bad for him, too.
Political Aspirations
One of Iger’s most trusted advisors doubles as a political operative. For more than a decade now, associates of the (former) CEO have expected him to run for office at some point. In fact, many believed that he might run for POTUS in 2020.
However, the Fox acquisition and the launch of Disney+ forced Iger to delay those plans. He couldn’t very well integrate a $71 billion company and a new over-the-top streaming service while running for President of the United States.
Photo: Masterclass.com
Something had to give, and the CEO chose to carry his company to the finish. He’d led them for nearly 15 years and didn’t want to see anyone fumble the ball at the goal line. Since that announcement, the situation has changed a bit, though.
As I write this, former Vice President Joe Biden appears likely to become the Democratic nominee for POTUS. A couple of weeks ago, the picture seemed much cloudier. Betting odds suggested a brokered convention, a political term that means no one was a favorite.
When no candidate earns the majority of delegates after a couple of rounds of voting at a political convention, literally anyone is eligible afterward. Conspiracy theorists – and I mean political ones, not just Disney observers – believed that Iger might have his eye on a back-door nomination.
While I have no idea about whether this idea ever entered Iger’s mind, he has denied the possibility. The New York native has stated that he will finish his tenure with Disney as contractually obligated.
(Photo by Chip Somodevilla/Getty Images)
That would carry him past the inauguration ceremonies, meaning Iger can’t be on a Presidential ticket in any way. And he can’t very well run for office while working as a Disney employee, right?
Health Issues
Many people worried about this one. The immediateness of the change struck a lot of people as strange. Iger went from having no heir-apparent to giving the job to Bob Chapek overnight. The timing didn’t seem right.
Photo: D23.com
So, people speculated about the health of Iger. I’m not going to spend a lot of time on this one. Instead, I’m going to dismiss it out of hand. During a cast member meeting, Iger eliminated this argument. He indicated that his health is excellent.
I have no reason to think that Iger would lie on this topic. As such, I understand the trail of whispers, but I must believe the man. According to the source, his health isn’t an issue.
Anger over Salary Cuts
Less than one year ago, Disney cut Iger’s bonus payout by $13.5 million. At the time, reports suggested that the Board of Directors and the CEO mutually agreed to this move. It came in the wake of Abigail Disney’s scathing criticism of Iger’s pay. She expressed outrage that cast members earned so little while he made so much. The heiress wasn’t the only one, either.
Iger came a long way from his earliest days as CEO. Back in 2007, he effectively doubled his pay during his first full year. That fact garnered headlines when the amount was “only” $17 million. Now, Iger receives the same media attention when his bonuses get cut by nearly that much!
Here’s the thing about high-profile corporate executives. They’re a competitive bunch, driven to demonstrate their excellence. Salary exemplifies overall job performance, which means that massive bonuses stroke egos.
Forbes estimates Iger’s net worth at $690 million. He doesn’t need the $13.5 million. However, Iger certainly believes that he’s earned it due to job performance. And he absolutely has a strong argument here.
Photo credit: CNBC.com
Disney’s Executive Chairman is caught in a broader social argument about pay inequities at the top of the corporate food change. He’s the rare executive who has earned every dollar his company has paid him, but he may be tired of the negative headlines.
Nobody wants to read about how selfish they are in the media, especially when the criticisms are unfair. To a larger point, not many people would enjoy the topic of their salary becoming a part of the national conversation about wealth distribution.
He’s Over It
I’ve discussed all of the other main reasons why Iger might have quit his gig. Now, let’s talk about the likeliest one. Disney’s Executive Chairman turned 69 in February. He first joined ABC Television in 1974. The man has worked at the same company since the Richard Nixon administration.
At some point, people decide that they’re ready to do something different. And I feel reasonably confident that the former CEO has reached that point. After all, Iger started championing candidates as his replacement more than five years ago.
Photo: TheWrap.com
Potential CEOs Tom Staggs and Jay Rasulo battled in a bake-off to decide who would follow Iger. Staggs “won” this contest, only to leave Disney barely one year later. The company’s Board of Directors soured on him, too. Friends, all of this happened by April of 2016.
Iger wanted to leave all the way back then. He’s felt stuck in the role ever since, and then the Fox acquisition delayed his departure even longer. As part of that deal, Rupert Murdoch requested that Iger extend his contract through 2021.
Robert Iger and Rupert Murdoch
credit: Disney
Observers have speculated about Murdoch’s motives with this demand. However, Iger willingly agreed. It’s the primary reason why the man is still Executive Chairman at Disney. If not for that, I honestly believe he would have left sooner.
At the end of the day, Iger has accomplished much more than he ever could have expected. He’s the most successful CEO at his company since Roy O. Disney. And he’s ready to go. He’s earned whatever comes next, and we should all express our gratitude for the way that he’s secured the future of Disney.
Photo: Masterclass
