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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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!
Simply the wrong man at the wrong time. You summed up the whole of it when you said, ” 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.” Until we get someone who does, the only magic we will get is what is left over from times past.
I agree with all this but what is just so unbelievable is that any employee, including Chapek, could be elevated to a position of power and not “get” the company philosophy. He’s been there for 30 YEARS.
Oops, Disney has made another mistake.
Next year when everyone gets their wits about them and the recession hits, Disney might actually do the right thing. It will have to in order to survive LONG TERM.
We are HUGE fans, DVC members, go at least once a year, but after our May trip, we are going to sit it out while Disney implodes on themselves. It was our “well let’s see what it is really like” trip. Well, between Genie + (which I did figure out and worked it well, but lost all rest because I had to wake up at 6:45 every morning!), all of the drunks throwing up in the Ratatouille Fountain, and worrying about men in the restrooms with my daughters, I’m done. In the real world, Chapek would be fired.
I beg your pardon? “All” of the drunks throwing up in the Ratatouille fountain? As in you really witnessed that happening more than once? Worrying about men in the bathroom with your daughter – seems a bit paranoid, or did you also actually see “all” those men pretending to be transgender so they can use the same bathroom as your daughter? Get a grip.
Anna has her head buried in the sand. There isn’t a single day that passes that Disney is I’m the news for some sort of debauchery
This us a very bad move, they just announced they are not going to build a Brightline Station at Disney Springs and insteed it will be at the Orange County Convention Center. Universal is giving land for that project and is happy to be apart of it. Very disappointing and lake of commitment to the Future growth of the Transit in Orlando.
Chapek seems like a humorless corporate type focused on the bottom line. In almost every photo I’ve seem of him his smile seems forced. But…in the end Disney has become just another media company (Disney Parks are not a priority) that is focused on added value for its shareholders.
That said, I concur that Disney has gotten more money-grubbing over the past few years. They have a unique talent in being able to monetize everything. And it seems that customers go along with it.
UK resident. Pre COVID we took two weeks every year for a stay in OKW. Started in 1998 and only missed one year. I have been watching in horror at what has happened to our beloved vacation. Even pre COVID it was the introduction of parking fees – and remember we stayed for 14 nights at a time, so a not insignificant sum. That was outrageous enough. Then after COVID the dreadful fast pass system and the non-return of DDPs. The magic has been systematically drained and frankly we will not be returning. Some friends who used to do a similar regular trip from the UK made the mistake of coming last month. Their conclusion on return? – never again! I can’t imagine we are unique and I suspect that the number of “regulars” as we were, will diminish significantly. Well done Bob, you’ve ruined Walt’s legacy.
We are also UK residents and we have decided not to go to Disney World for the foreseeable future , for the reasons you have stated above. We loved the work of the imagineers and the cast members were always great. But we feel as if Disney management just want to ‘gouge’ the us now, to price us out. They have succeeded.
Tom, I couldn’t wait to hear your take on this and, as is usually the case, I couldn’t agree with you more. I especially like your calling out of D’maro. He must have a much better PR team than Chapek because he generally gets ZERO blame for any of the negatively perceived changes and cuts in the parks and resorts. For some reason, he’s the darling of the fans. Thank you for saying what a lot of us are thinking.
I feel like this is one of the things that Bob Chapek is paid to do: to be the focus for all the negative PR so the rest of the corp can be free to carry out the actions without personal repercussions. “Professional scapegoat”, if you will 😉
Unfortunately once new things are implemented they are rarely removed. Increased pricing with food and rooms, parking fees, pay for fast pass, no Magical Express. The list goes on and on of pay more and get less. I think after the people starving for vacations post Covid and things level out Disney will start to experience what damage has been done. Was a big fan and refuse to return. In the meantime Universal is headed in the right direction.
Would be so great if everyone put their negative comments in an email to Disney in addition to here, Disney has a place to do this in their site. Disney needs to hear from us so we don’t continue to have the Chapek Disney for the better part of our lifetimes…we’ve lost too much of the magic already.
I agree! We just returned from our trip yesterday and we’re definitely disappointed that the magic of what it once was is lost. I will be including all of my thoughts about the changes and lack of magic in a letter to Disney. If we don’t see or hear of a change, we will most likely not return.
(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.)
Thank you for saying this! As much as I dislike Chapek, Bob Iger all but spoiled his legacy by jumping ship when he was most needed, and I wish it was talked about more when Chapek is getting dumped on
How many CEO’s survive the stock price drop that has occurred under Chapek’s leadership. The market cap has taken a 50% hit in 52 weeks. Stock price 52w high of $187 and low of $92. Today it is at $95. Does the board care what is happening to the owners or does their arrogance exceed their intelligence? Fortunately I sold at $143 and a profit.
“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.”
The Walt Disney Company is too big to have failed completely due to the pandemic. Let’s be realistic – the company would have survived with or without Chapek. So, to claim that as a reason to keep him on for another three years is ridiculous. I agree with you, Tom, I have concerns about the next three years, too. I may be waiting another 4 years before my next Walt Disney World trip… the last trip (October 2021) was not like the previous ones.
Hard to be excited about this given the past few years in the parks. I dont really see much change coming unless Universal ends up forcing their hand as you mentioned yesterday in the high speed rail article.
“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.”
THIS. I was halfway through Iger’s book when he very quickly resigned and, while I had loved the first half, the second half was undeniably tainted by his “Quick! This can’t hurt my legacy!” departure.
The board still hasn’t named him President, so this sounds more like a football coach getting one more shot to prove that the boss’s faith is justified. To me, this seems like a sure sign to expect an outside hire after the recession, unless “hiring someone from outside the company to a #2 position as CEO-in-waiting” somehow counts as being an internal hire. I *guess* this beats grabbing a random ex-Warner executive (so many of them nowadays!); what are Rasulo and Staggs up to now?
Not a strategist (do y’all remember those strategic priorities?!)
Not a Wall Street darling (look at the stock price)
Not beloved by fans or CMs. Not an external brand ambassador (is there anyone in the world he hasn’t upset yet?)
It’s not really clear to me what Bob brings to the table or why his services merit retention, let alone a raise.
They’re kidding, right?
Tom: Unfortunate but perhaps inevitable interim act until the Bob and Chairman both go. They might survive long term but…. Let’s revisit if we hit a recession, Disney Common hits 80, and they realize they are bleeding millions in India. Or if it just hits the “tipping point” in customer dissatisfaction. Sigh.
Dennis – losing weight is just one of the ways Disney wants to make its guests into better people.
If I had never visited Disney, before my December vacation, I would never go back. It was a horrible stay, and through the roof expensive. One experience after another was sub-par, compared to my earlier visits. And the mistaken changes they have made can not be put down to post-Covid restraints, they reflect a lack of understanding – or a disregard – of what their guests need to experience for an enjoyable experience.