- Disney’s board reached out to Bob Iger on Friday about coming back as CEO.
- Senior Disney leadership, including CFO Christine McCarthy, had concerns with Chapek’s management of the company.
- Chapek and his inner circle were caught off guard by the news, which broke Sunday night.
Disney chose to rehire Bob Iger as chief executive after receiving internal complaints from senior leadership that Bob Chapek was not fit for the job, according to people familiar with the matter.
The executive change came together quickly, blindsiding Chapek and his closest allies. Disney’s board reached out to Iger on Friday, without any other serious candidates in mind to replace Chapek as CEO, CNBC’s David Faber reported Monday, citing sources.
The board’s outreach to Iger and discussion to replace Chapek came after the board married internal complaints about Chapek’s leadership with concerns following Disney’s most recent quarterly earnings report, said the people, who asked not to be named because the discussions were private. One of the executives to express a lack of confidence in Chapek was Christine McCarthy, Disney’s chief financial officer, two of the people said.
McCarthy was Iger’s CFO before he departed as CEO in 2020, holding the role since 2015. She has an established relationship with the board given her longevity in the position, the people said.
A Disney spokesperson declined to comment. Chapek didn’t respond to a request for comment.
On Sunday, Disney said it would replace Chapek with Iger as chief executive, effective immediately.
Iger has agreed to serve as CEO through the end of 2024, and will earn a $1 million base annual salary, Disney said in a regulatory filing Monday. The compensation package includes an annual bonus target of 100% of his annual salary, with an annual target of $25 million for a long-term incentive award.
Chapek had a base salary of $2.5 million, with an annual target of $20 million, which was increased from $15 million when his contract was renewed earlier this year. He is reportedly in line to receive a severance package of at least $20 million.
Chapek had come under fire for his management of Disney in the last few years. Chapek was notified on Sunday night, Faber reported.
Chapek and his inner circle were caught off guard by the news, one of the people said. The status of Chapek’s right-hand man, Kareem Daniel, is murky and dependent on the direction Iger wants to take at the company, two of the people said. Daniel leads Disney Media and Entertainment, a division created through Chapek’s reorganization of the company. Iger has never been a fan of the reorganization, which has caused internal consternation for nearly two years.
Chapek complaints
Iger has consistently heard complaints from his ex-colleagues throughout the year about Chapek’s leadership style and decision to pull away budgetary power from Disney’s creative executives, according to people familiar with the matter. Several specifically noted Chapek’s plan to move 2,000 Disney employees from California to Florida, which was then delayed, showed a level of callousness toward employees’ lives that didn’t jive with Disney’s family-friendly culture.
While some internal CEO candidates were identified who might be able to take the job over time, the board didn’t want to put someone new in that position given all various pressures on the company, Faber reported.
Disney reported fiscal fourth-quarter earnings earlier this month, disappointing on profit and certain key revenue segments. The company had also warned that its strong streaming numbers would likely taper off in the future. Three days later, Chapek told executives that Disney would cut costs through hiring freezes, layoffs and other measures. The memo about cost-cutting led to some internal pushback against Chapek, one of the people said.
The company’s shares rose Monday following the news of Chapek’s replacement.
— CNBC’s David Faber contributed to this article.
Source: Business - cnbc.com
