Who Is This Person Deciding Disney’s Future?

Who is this person deciding Disney’s future?

Seriously, this dude didn’t even work at The Walt Disney Company a year ago.

How is he suddenly in charge of making THE decision that will influence all aspects of the company?

Who is James Gorman, and how did he suddenly get this much power at Disney?

Who Is James Gorman?

On November 29^th, 2023, James Gorman joined Disney’s Board of Directors.

At the time, the Disney community collectively went, “Who?!” But that’s not new.

Generally, when Disney adds Board members, the names are only recognizable to people in the business industry…and sometimes not even then.

For Wall Street analysts, the arrival of Gorman and another Board member, Sir Jeremy Darroch, signaled a change.

Disney was taking its criticisms seriously by including outsiders with a fresh perspective and new ideas.

Both of them possessed resumes that were beyond reproach. Even better, they fit Disney’s perceived needs at the time.

Darroch had worked at the C-suite at British Sky Broadcasting, a company so well-known that it’s internationally known simply as Sky.

Darroch became CFO in 2004 and Group Chief Executive in 2007. He was later the Executive Chairman of their Board.

Somehow, Gorman’s track record was even better. He had been CEO of Morgan Stanley starting in 2010.

When Gorman arrived, the investment firm possessed a market valuation of $40.27 billion.

To be fair, the cap had been $85.4 billion in 2006, but the Wall Street crashes wrecked the industry.

Morgan Stanley’s Board believed it needed new leadership to lead the next generation.

Gorman proved astonishing in that role, leading the company back to $75.4 billion by 2014.

While there were hiccups along the way, Morgan Stanley’s valuation stood at $153.1 billion when Gorman ended his tenure as CEO.

Somehow, that’s not the most remarkable part, though.

Gorman handled his company’s succession so smoothly that the company is now worth more than $190 billion today.

You can understand how that grabbed Disney’s attention, as its succession attempts have been a debacle.

How Gorman Came into Power at Disney

Some corporate intrigue led to Gorman’s upcoming position of power at Disney.

On January 2^nd, 2025, the executive will become Disney’s new Chairman of the Board, the most prestigious position at the company.

Gorman will have worked at Disney for less than a year when that moment comes. He technically started at Disney on February 5^th, 2024.

To understand this odd turn of events, we must circle back in time to when Bob Iger retired from Disney.

Iger had planned for Bob Chapek to succeed him. However, Iger would remain as Executive Chairman of the Board.

When Disney fired Chapek and restored Iger as CEO, Iger didn’t become the Chairman of the Board again.

Susan Arnold held that position, which led to an odd dynamic. Iger and Arnold had a falling out over Chapek’s performance.

In fact, the duo hadn’t spoken for the body of a year before Arnold called to offer Iger his old job back.

Iger had reason not to want Arnold as the Chairman, and she was technically term-limited anyway after 15 years on Disney’s Board.

So, Arnold and Iger agreed that former Nike CEO and current Disney Board member Mark Parker would replace her as Chairman.

We likely would have witnessed that structure indefinitely if not for problems outside the company.

Nike is a mess right now, having recently fired its CEO and brought back a popular former executive.

Yes, that should sound familiar to you. Disney just did the same thing in 2022.

Since Nike is dearest to Parker’s heart, he wants to aid with the transition and focus exclusively on his former company.

So, Parker will leave Disney at the end of 2024. Given his track record, Gorman makes the most sense as his successor.

Disney Establishes a Timeline 

The oddity of this entire discussion is the timeline, with Disney indicating it won’t choose a successor until 2026.

Many analysts believed that Disney would select its next CEO by the end of 2024.

Earlier in the year, I fell into this camp, but once we reached September, I recognized that Disney would likely wait until next year.

Like everyone else, I never expected Disney to take an additional year beyond that, although it does make sense.

On the topic of succession, Gorman has met with Disney’s Board on six occasions.

Since Disney has named him the person in charge of the selection process, he’s been laser-focused on this task.

The difference between Parker and Gorman is that Parker has an eye cast toward Nike at all times. That’s his first love.

Gorman handled his succession so smoothly that the company has reached historic highs.

Part of the reason for this is Gorman persuaded all the top candidates at Morgan Stanley to remain, even after they lost CEO.

By “persuaded,” I should probably say bribed. The company gave all three candidates $20 million as a reward for participating in the process. It’s good work if you can get it.

Disney faces something similar now, with four high-quality internal candidates attempting to win the succession race.

Gorman was largely unfamiliar with them before February of this year. So, he’s starting from scratch.

To make an informed decision, Gorman has slowed down the process. So, Disney must wait until 2026 for its next leader.

In the interim, Bob Iger will run the show. And yes, some people insist he’ll get another extension.

Please remember that Gorman has no loyalty to Iger, though, and it’s unclear whether Disney’s CEO will have significant input on succession this time.

Why Wall Street Doesn’t Like the Timeline

Presuming Disney’s goal was to confuse everyone with its recent announcement, they’ve succeeded beyond their wildest dreams.

Even though the company clearly telegraphed that Gorman would handle succession, few analysts really believed them.

That philosophy changed after Disney went public that Gorman was making the call and announced a 2026 timeline.

Since Iger leaves the company in 2026, this window seems tight.

In fact, some Wall Street analysts have expressed disbelief about the timeline.

Hollywood’s creative industry faces unprecedented change due to the perceived growing threat of Artificial Intelligence (AI).

Needham’s Laura Martin spoke to The Wrap and stated the following:

“The timeline of this board is completely out of step with the rapid technological changes impacting the media business.

“You should get a new CEO now, when generative AI is only 12 months old, not 18 months from now.”

Now, I would argue that Disney may want to evaluate how each of its leaders incorporates AI into the business. Still, it’s a fair point.

Even for those of us who feel that Wall Street is overreacting regarding AI, the new technology will impact Disney as much as anyone.

Disney recently faced criticism for incorporating AI into the opening credits of Secret Invasion.

Marvel chose this path just as the Hollywood strikes were beginning. Many in the industry took it as a warning shot.

In the process, Disney showed that it was ready to embrace the future, with or without human-created content.

Now, the company isn’t selecting new leadership at a time when some analysts perceive the industry as undergoing dramatic change.

One explanation could be that Disney trusts Iger more during this time than someone new, which is justifiable.

Remember that Chapek faced historically unprecedented changes, and he…*ahem* struggled.

What Will Gorman Do?

Here’s the fun part. Gorman is known on Wall Street because he has demonstrated such shrewd investment and leadership skills.

At Disney, he’s still quite the mystery since he’s an outsider with only nine months of experience on the job thus far.

In two months, he’ll become the company’s leader, even though he’s a Disney rookie.

Thus, all the people evaluating this race are producing conflicting information about what’s happening.

Some say that Gorman most assuredly will pick an internal candidate. Others swear that it’ll be someone outside Disney.

A few folks – and I’m one of them – don’t believe this race will last into 2026. Instead, we think a decision will come sooner.

By saying 2026, Gorman shrewdly buys himself some time to evaluate everyone outside the limelight.

If/when he picks earlier, the quicker nod creates the perception that one candidate easily stood out from the rest.

Should Gorman wait until 2026, that likely hints that he’s at least putting out feelers to non-Disney executives, gauging their interest.

Also, as ridiculous as the statement sounds, Iger could stay. Few expect that right now, but history suggests the possibility.

But Who Is James Gorman?

Long story short, as of this January, James Gorman is the Chairman of the Board of Disney.

He’s also someone with no direct ties to any of the current candidates, although many Wall Street executives tend to run in the same circles.

Gorman is an Australian native who moved to the United States and earned his Master’s from Columbia in 1987.

He initially worked for a law firm where his primary account became Merrill Lynch.

The bankers at Merrill Lynch were so impressed with Gorman that they poached him in 1999, creating the role of Chief Marketing Officer for him.

In 2006, an opportunity presented itself at Morgan Stanley, and the rest is banking history.

Gorman joined the company during the worst financial crisis in 80 years.

His steady hand and poise earned him widespread acclaim, so much so that he was running the place within four years.

Under Gorman, Morgan Stanley achieved record heights. And more impressively, he left the place well-positioned to excel without him.

For all Bob Iger’s strengths as an executive, that’s the one thing he cannot claim.

Still, in the past, I’ve mentioned that my primary concern with Dana Walden’s candidacy is that she’s not from the Disney farm system.

Walden has only worked for Disney for five years, having earned her reputation at Fox.

Well, Gorman isn’t Disney at all. So, there’s at least some cause for concern about the type of candidate he’d prefer.

As long as Gorman picks one of the internal candidates, this is fine.

If he selects someone from outside the company, it’s the This Is Fine meme.

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