Bob Iger will remain as CEO of The Walt Disney Co. through the end of 2026, agreeing to a two-year contract extension that will give the entertainment and theme park company some breathing room to find his successor.
Shares rose 30 cents, or 0.3%, to $90.45 in early afternoon trading.
Iger rejoined Disney as CEO in November, taking over control of the company from Bob Chapek, whose short tenure had been met with much criticism. Disney park loyalists had openly criticized Chapek on social media, voicing their perception that he had a "business first, customer last" mentality.
Iger had previously served as Disney's CEO and chairman from 2005 to 2020 and then as executive chairman and chairman through 2021. Iger wasted no time once back in the CEO role, making one of his priorities reconnecting with the Disney theme park die-hards and restoring their faith in the brand.
Wall Street analysts said they viewed the contract extension as a positive for the company, which is battling a number of issues, ranging from a fight with Florida Governor Ron DeSantis to the need for cost-cutting across its businesses.
"Given Bob Iger's track record and stature in the media industry, we view this announcement as a positive as it provides Disney steady leadership as the company and industry manages through a turbulent transition period," noted Bank of America analyst Jessica Reif Ehrlich in a Thursday research note.
In a statement, Iger said he planned to stay on longer partly to ensure succession planning for choosing the next CEO.
"Because I want to ensure Disney is strongly positioned when my successor takes the helm, I have agreed to the board's request to remain CEO for an additional two years. The importance of the succession process cannot be overstated, and as the board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful transition," Iger said in a statement.
Iger is also seeking to protect the company from a takeover of Disney World's theme park district by DeSantis. Disney, alleging the governor waged a "targeted campaign of government retaliation" after the company opposed a law critics call "Don't Say Gay."
Last month attorneys for DeSantis, a state agency and his appointees to a revamped board that governs Disney World asked a judge to dismiss the federal lawsuit.
Disney's board gave Iger their full support, voting unanimously to extend his contract.
"Bob has once again set Disney on the right strategic path for ongoing value creation, and to ensure the successful completion of this transformation while also allowing ample time to position a new CEO for long-term success, the board determined it is in the best interest of shareholders to extend his tenure, and he has agreed to our request to remain Chief Executive Officer through the end of 2026," Chairman Mark Parker said in a statement.
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