Disney Extends CEO Bob Chapek’s Contract
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.”
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.
July 6, 2022 Update: In a filing with the United States Securities and Exchange Commission, the Walt Disney Company revealed the following about CEO Bob Chapek’s contract extension:
“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.
All of that was exacerbated by the bombshell Black Widow lawsuit filed by Scarlett Johansson against Disney, with insiders blaming CEO Bob Chapek for the handling of that embarrassing incident.
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.
That made headlines for weeks, and culminated in Florida Passing Bills to Dissolve Walt Disney World’s Reedy Creek Improvement District. Books will someday be written about this saga, but we’ll leave it at only a couple of brief paragraphs here as you’re undoubtedly aware of what has happened!
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.
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Your Thoughts
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!
“or did this news catch you by surprise?”
Oh Tom…If I woke up tomorrow with my head sewn to the carpet, I wouldn’t be more surprised than I am now.
Many are upset by this, but I do not see it as any type of endorsement of Chapek’s leadership. This is simply a matter of fact for what the company is facing in the next 1 to 3 years. Disney faces a very difficult time in the short to medium term due to continued supply chain/staffing constraints and a looming economic recession. You are correct that Chapek is the hatchet man, but he is also a perfect fall guy once we get through the tough times and they don’t have a replacement for him anyway. If things turn around before his contract is up, there is nothing to keep him in the job if the negative sentiment is still there (and we all know it will be). This contract is no different than what you see in most of the sports world. Disney can force him out and pay his remaining years and/or golden parachute and we can all move on to a hopefully better World.
Chapek was probably Disney’s best worst option. I completely agree that many of the unpopular decisions made for the Parks should fall solely on Josh D’Amaro but he always gets a pass while Chapek gets all the blame. They’re both sleezy and scummy!
Those were two of the original dwarves.
My words Disney!! This man cares only about one thing and one thing only- how to make as much money as possible. All the wonderful things that made Disney so special now eroded away. It’s just about how much money they can get. So sad to see and this man is a big part of it
You know money is the Board’s primary concern too, right? I’m not a Chapek fan either but in the eyes of the company being solely focused on profits is almost assuredly a plus, not a minus.
What is board smoking??? They need to share so we forget how we get screwed by disney on regular basis.
Unbelievable! I have to guess the main reason for his extension is that they had no one ready to take his place although I think they could have left it at a 1 or 2 year extension while they figured out who to move into the top position. This does not bode well for the company or my stock in it.
Well that’s a shame. They may regret this decision with the economy circling the toilet.
So another 3 years to royally give it to the Disney fans. If there was a chance to lose the pass reservation system, it’s gone for good at this point. That will never go away and at some point they’ll start allowing less and less ppl in. Quality is going to go away and the food portions will basically turn into a carrot stick, a bologna sandwich, and a small 5 oz bottle of milk for $30. Thought Fla had issues getting locals to do anything….wouldn’t be surprised to see more out of towners not going. Time to buy stock cause it’ll become more affordable at some point. Just stupid stupid stupid on their part.
Chapek and Karey Burke are the TWO WORST execuatives in the world. The two are totally responsible for the Disney unreset, They need to go!
Seems like the board of directors are giving the middle finger to all of the true Disney fans around the world.
WOW ! that SUCKS !
Was the board actually told what they were voting for? Maybe right before the vote someone asked “who wants ice cream cake for lunch?’.
“All in favor of Bob’s cheesecake?”
That sucks there goes more greed, expect price increases, good bye disney to the average joe.
Tom, time to throw your hat in the ring!
Absolutely HORRIBLE! He is a disgrace! Disney is for kids,NO to politics or any form of sexual orientation. He has ruined the Disney name!
*sad trombone sound effect*
My read on this is that a three year extension is faint, damning praise. Five years seems like a nice, round, “standard” length of extension. Three years feels more like a probationary extension and a warning. For me, the truly problematic issue with Chapek as a CEO is the unforced errors. These are so absolutely preventable, just by simply taking a few moments and considering all of the possible outcomes of an action/response. He has simply failed the “think before you speak” test to many times.
Disappointing at least. Disgusting at best.
Wow.
Just … wow.
If you want someone who is financially savvy, smart, puts forth a positive view and pays close attention to customers and details it’s time to appoint a women.
You mean like Christine McCarthy, Disney’s CFO who basically said all Disney parks goers are too fat?