In perhaps a sign that the search for a successor to The Walt Disney Co., chairman and CEO Bob Iger may take a little longer than expected, the content giant extended his employment deal for another year, sweetening the deal with a $5 million cash bonus if he stays in the top spot until 2019.
This is the latest in a string of employment extensions Iger has received from the company since he first announced his intention to retire in 2015. But since then Disney’s succession plans have hit a snag. The former heir apparent, Chief Operating Officer Thomas Staggs resigned in 2016 after reports said that he had lost the backing of Disney’s board of directors. And Iger said earlier his year after agreeing to stay on until 2018 that he was open to extending his tenure.
Disney is in need of a steady hand, as subscriber declines at its flagship cable network ESPN have overshadowed strong performance at its film studio and theme park divisions. And Iger has been the one to provide it.
“Given Bob Iger’s outstanding leadership, his record of success in a changing media landscape, and his clear strategic vision for Disney’s future, it is obvious that the Company and its shareholders will be best served by his continued leadership as the Board conducts the robust process of identifying a successor and ensuring a smooth transition,” Disney independent lead director Orin Smith said in a statement.
According to documents filed with the Securities and Exchange Commission Thursday, Disney amended Iger’s already amended employment deal on March 22, extending the period of the contract another year from June 30, 2018 to July 2, 2019.
Iger’s annual base salary of $2.5 million will be the same as he received in 2016, as will his targeted annual bonus and target equity awards. The terms of any equity grants made for fiscal 2019 will be on the same terms and conditions as would have applied to the grants made in fiscal 2018.
According to Disney’s annual proxy statement, Iger received $43.88 million in total compensation in fiscal 2016, including $20 million in non-equity incentive plan compensation, stock awards of $8.8 million and option awards of $8.45 million.
According to the most recent SEC document, if Iger stays until 2019, he will receive a cash bonus of $5 million in addition to his other incentive awards. Following his termination of employment in 2019, Iger will serve as a consultant to Disney for three years, where he will provide assistance to the new CEO as requested. For those services he will receive a quarterly fee of $500,000 for each of the first 8 quarters during the Consulting Period and $250,000 for each of the last four quarters of the Consulting Period. For the three years following termination of employment, Disney will provide Iger with the same security services (other than the personal use of a company provided aircraft) as was made available to him as CEO.