The Walt Disney Company has extended CEO Bob Chapek’s contract for three more years, the board of directors announced. The vote was unanimous and occurred during a meeting at Walt Disney World ahead of the Disney Wish debut. (Updated July 6, 2022 with contract and compensation details.)
“Disney was dealt a tough hand by the pandemic, yet with Bob at the helm, our businesses — from parks to streaming — not only weathered the storm, but emerged in a position of strength,” said Susan Arnold, chairman of the Walt Disney Company’s board of directors, in a statement Tuesday.
“In this important time of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob’s leadership is key to achieving that goal. Bob is the right leader at the right time for The Walt Disney Company, and the Board has full confidence in him and his leadership team.”
“Leading this great company is the honor of a lifetime, and I am grateful to the Board for their support,” said Bob Chapek, Chief Executive Officer. “I started at Disney almost 30 years ago, and today have the privilege of leading one of the world’s greatest, most dynamic companies, bringing joy to millions around the world. I am thrilled to work alongside the incredible storytellers, employees, and Cast Members who make magic every day.”
Chapek has worked for the Walt Disney Company for nearly 30 years and is the 7th CEO in nearly 100 years. He took over the position from Bob Iger in 2020 just as the pandemic had closed the parks in Asia, and only weeks before the closure of both Walt Disney World and Disneyland.
“On June 28, 2022, the Board of Directors of The Walt Disney Company (the “Company”) and Robert A. Chapek, the Company’s Chief Executive Officer, agreed to extend the term of Mr. Chapek’s employment agreement with the Company to three years, beginning from July 1, 2022.
The employment agreement will be amended to provide that Mr. Chapek will be granted a long-term incentive award having a target value of not less than $20 million annually. The proportion of his long-term incentive award comprised of performance-based restricted stock units will be increased to 60%. These awards do not guarantee Mr. Chapek any minimum amount of compensation.
The actual amounts payable to Mr. Chapek in respect of such opportunities will be determined based on the extent to which any performance conditions and/or service conditions applicable to such awards are satisfied and on the value of the Company’s stock.
Accordingly, Mr. Chapek may receive compensation in respect of any such award that is greater or less than the stated target value, depending on whether, and to what extent, the applicable performance and other conditions are satisfied, and on the value of the Company’s stock. No agreement has been made to amend any other terms of Mr. Chapek’s existing employment agreement, including his base salary.”
Chapek’s contract as Chief Executive Officer of the Walt Disney Company will now expire on July 1, 2025. Per the SEC filing, Chapek’s base salary of $2.5 million per year remains unchanged. The long-term incentive award included in the contract has increased from $15 million annually to not less than $20 million annually–meaning it could be higher than $20 million if the company outperforms.
For the sake of comparison, former Disney CEO Bob Iger’s compensation package for the 2020 fiscal year amounted to $21 million (a bad comparison due to the pandemic and Iger stepping down as CEO during that time). More relevant numbers are the two prior years, when Iger earned $47.5 million for the 2019 fiscal year and $65.6 million for the 2018 fiscal year.
Those numbers were boosted largely by stock packages that Iger was awarded as incentive to remain with the company past his originally planned retirement date. His base salary during those years increased from $2.5 million to $3 million.
Since becoming CEO, Bob Chapek has endured multiple controversies. This began with a rumored falling out between Chapek and former CEO and then Executive Chairman Bob Iger. There were several articles about the tensions between Bob Iger and Bob Chapek.
This year, there have been high-profile political standoffs between the Walt Disney Company and Florida, with Chapek and Governor Ron DeSantis at odds. It wouldn’t be partisan to say that Chapek managed the rare feat of alienating pretty much everyone across the political spectrum.
With regard to the theme parks, Chapek has developed or advanced several unpopular initiatives. He announced Disney Genie a few years ago as head of Parks & Resorts, and the paid FastPass service debuted while he was CEO.
Other controversial decisions have also been made under Chapek’s tenure as CEO. These include the end of Disney’s Magical Express, the Disney Park Pass reservation system, construction delays, an underwhelming 50th Anniversary celebration, a variety of price increases, and more that I’m probably forgetting at this particular moment.
Prior to becoming CEO, Bob Chapek served as Chairman of Disney Parks, Experiences and Products. In that role, Chapek oversaw the Company’s largest business segment, with operations around the globe and more than 170,000 employees worldwide. The segment includes Disney’s travel and leisure businesses, encompassing six resort destinations in the United States, Europe and Asia, Disney Cruise Line, Disney Vacation Club, and more.
Disney’s global consumer products operations include the world’s leading licensing business across toys, apparel, home goods, digital games and apps, the world’s largest children’s print publisher, Disney store locations around the world, and the shopDisney e-commerce platform.
During his tenure at the Parks segment, Mr. Chapek oversaw the opening of Disney’s first theme park and resort in mainland China, Shanghai Disney Resort; the addition of numerous guest offerings across Disney’s six resort destinations in the U.S., Europe and Asia.
This included the creation of the Star Wars: Galaxy’s Edge lands at Disneyland and Walt Disney World. It also encompassed the development of Marvel lands and attractions around the globe and the expansion of Disney Cruise Line with the announced construction of three new ships.
From 2011 to 2015, Mr. Chapek was President of the former Disney Consumer Products segment, where he drove the technology-led transformation of the Company’s consumer products, retail and publishing operations.
Prior to that, he served as President of Distribution for The Walt Disney Studios and was responsible for overseeing the Studios’ overall content distribution strategy across multiple platforms including theatrical exhibition, home entertainment, pay TV, digital entertainment and new media.
As for our thoughts on Bob Chapek as CEO of the Walt Disney Company…ehhh.
We don’t normally offer commentary about executive leadership at the Walt Disney Company because it’s tough to do so from the outside looking in. Quite simply, fans see what we want to see. We view things in reductionist terms, and can be manipulated by agendas both internal and external to the company. Consequently, it’s easy to paint leadership in the familiar terms of Disney fairytales.
There’s always a villain—the one blamed for the gratuitous injection of IP in attractions. There’s also usually an underdog hero—the one who “gets” Disney and would save the parks and restore Epcot’s original vision if they just had a little more power.
There’s perhaps a kernel of truth to some of this, but just as much is attributable to media savvy (or lack thereof) and how executives present themselves and mold their own public image. Just look at how much scrutiny Chapek receives as compared to new Parks & Resorts Chairman Josh D’Amaro. The latter has almost certainly been the one to actually make and execute a lot of unpopular decisions in the last 2 years, and yet he largely flies under the radar and escapes fan criticism.
With all of that said, our outsider’s perspective on Bob Chapek is not exactly glowing. In fact, my perception from the beginning was that Chapek was viewed even internally as a hatchet man. Meaning that he was likely brought in to execute tough and unpopular decisions during the pandemic to give the company a reset of sorts.
Once that unpleasant task was accomplished, I fully expected Chapek to ride off into the sunset, enjoying his riches while the company brought forward a fresh face to take credit for popular and more positive changes.
This was only reinforced in recent months. So many of Chapek’s decisions, even from the outside, appeared to be made with only an eye toward the short term. His handling of so many things has felt clumsy, to put it charitably.
I also have to admit that he was dealt a losing hand from the outset, taking control of the company at a time when unpopular decisions would have to be made. Some of what has happened during his tenure (like paid FastPass) was years coming, an inevitability sooner or later.
He certainly has had his share of unforced errors and bad decisions, which is why this extension and vote of confidence is somewhat surprising. Although it doesn’t seem like Disney has a deep bench due to other recent departures and terminations, surely Chapek is not the only long-tenured executive who could helm the ship. To the contrary, it seems like someone else could probably navigate recent controversies more competently.
With that said, Chapek has also been in plenty of no-win situations. Some of the recent rockiness and unpopular decisions would’ve occurred or been made under any CEO. (Honestly, I’m more than a little bitter that Iger kept extending for years, but jumped ship when he knew things were about to get bad. I think a lot of this could’ve been better handled with him at the helm, handing off to Chapek right about now.)
I still can’t I’m thrilled about this news. Nothing Chapek has done has given me any reassurance that he’s the right leader or that he “gets” the Walt Disney Company or its rich creative legacy. I have concerns about what the company, Walt Disney World, and Disneyland will look like 3 years from now under his stewardship.
What do you think of Bob Chapek having his contract as the Walt Disney Company’s CEO extended for 3 years? Think this is appropriate given the job he’s done, or did this news catch you by surprise? Any questions? We love hearing from readers, so please share any other thoughts or questions you have in the comments below!