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!
This was a given since the board is only focus is share holder equity. The guests, or employees are not a priority but quarterly statements. This is the endemic problem with most corporations in America.
Furthermore, this is not going to change till consumers stop spending at these companies and start looking at a B corporations which have multiple goals for good. Currently there are 5,267 companies in a 156 industries.
You know, the problem here is that, in the sea of frowny faces, no one is willing to make the changes necessary, none of us are willing to quit going and quit giving our money to Disney. Chapek and company has not earned our money, Walt did. They did not earn anything they bought it. The only reason Chapek is going to potentially make what 90 mil in the next three years, is because we keep rewarding him. We keep accommodating them. The takeaway Magic express, we complain with fist full of dollars, and accommodate their decision. Get rid of extra magic hours, that’s ok, we will complain but here is more of our money, hope you feel accommodated. Has anyone noticed that Epcot is now only open till 9, used to be open an hr later than all the parks. No DDP, No EMH, no ME, here is our money. Chapek has done nothing but cut perks, and raise prices, and they praise him like a hero, we are being treated like garbage by people in fur coats and sunglasses. They don’t pay their employees well, don’t care for imaginers, built a cheap 6000 dollar a night hotel slapped Star Wars on it and people flock to them. Again what has Chapek has done to earn our money, we owe them nothing, yet, we are all still gonna keep on giving. Chapek has it right, we don’t need perks etc, we will give them whatever they want. We are so accommodating to these rich millionaires.
Totally agree. We are in the UK and are staying away purely because of the above reasons . Voting with your feet is the only thing they will understand .
Totally agree, we have decided not to go for the time being. We all need to vote with our feet.
Well put. We continue to want and desire our Disney Experience which continues to feed their greed. Sadly we are adding to the problem instead of fighting it. Until we all rise up and say enough, we will not see Mr Chapek gone and Disney returning to Walt’s Dream – a place where families can be together for fun and not break the bank”. Wake up Disney Fans!
Actually, as we can see just by reading many of the comments on this post alone, there are many of us who have already and will continue to vote with our wallets. Following other news letters and youtubers that post Disney content, many many people (and more all the time) have made the decision to stop supporting Disney. We used to go at least once and often twice a year, but we haven’t gone to WDW since 2015 because of the increasing price and decreasing perks. The commenters on this blog post are a tiny fraction, but part of a much larger group, that is continuing to grow in response to decisions that Disney is implementing. The parks are still experiencing high crowd levels, or so we are being led to believe, but with us formerly dedicated Disney lovers leaving in droves that won’t be sustainable. The stock is tanking, recently released movies are not drawing the revenue that Disney movies used to, Disney doubling down on their woke, SJW agenda. If we continue to stand firm and take our vacation, entertainment and other fun dollars elsewhere, it will eventually affect Disney and they will be forced to take action to win back the hearts and minds of the fans they lost.
Walt Disney emerged in a position of strength on the backs of loyal fans and families. Nickel and diming and out of control price increases. Lets see how WDW handles the low demand as families struggle with food, gas and everyday living expense. But then again he can’t relate because he is making millions
Current Disney practices continue to generate customer alienation, while at the same time special events, and ticket sales (‘park reservations’), and $100,000 exclusive flights around the world sell out without hours. I don’t know what to think of this.
Tom, this is a well rounded post, but you’re forgetting the biggest blunder of all. Im referring of course to when mr bob LAMEchek gave a speech at the university of Indiana and in the biggest mistake of the year said that Walt Disney world was “the happiest place on earth”, when WDW is IN FACT “the most magical place on earth”. This is unforgivable. The title of this article shoulda been “bob Chapek is going to hell”
I read your comment about 30 minutes ago and came back to write this because I am still cracking up
There is no joke? We are dealing with someone who does not respect the rich creative heritage of the Walt Disney company. Heimlichs chew chew train was shuttered under this man! Need I say more?
Not knowing the basis for the stock value incentive given to Chapek, it’s difficult to compare his compensation to former CEO Iger. When Chapek took over from Iger in Feb, 2020, Disney’s stock was trading around $140/share. Today it’s about $96/share and continues to fall. If Chapek’s basis for stock value compensation is the price this past week at $96/share, he will reap a windfall if the stock rebounds to the $197/share it was trading at in Mar, 2022. Very few shareholders and customers have been pleased with changes made the past 2 years under Chapek. Granted, the changes during his first year were a reaction to the pandemic. The changes made this past year however are all his without the pandemic as a major influence and strictly an effort to increase revenue. Disney is a business and trying to increase revenues is Business 101. However, in the process they have lowered their customer satisfaction ranking considerably. Blame it on no more FP, social issues, rising prices or whatever, it is not likely a single issue but more death by a thousand cuts. Hopefully, Chapek will take the criticism as constructive and give some weight to customer satisfaction and not solely bottom line profits. Without customers, no price increases or cost cutting moves will suffice.
Let me start by saying, I have no clue what is happening inside Disney. What I see on the outside is many opportunities for better. These have been expressed by many of the fans. Here is my wish list. (1) I would like Disney to improve their tech … why are there so many apps? Why can’t I have a “My Disney Experience” in Disney+? Why can’t I shop for all things Disney in Disney+? Why can’t Disney extend the story telling IP into games and make them available on Disney+? If Disney did this, it would be better equipped to both enhance the customer engagements (including feedback) and monetize these relationships – aka increase profits (2) I would like each tier of Disney hotel to come with something extra for that tier of reservation. I am sending my daughter and two nieces to Universal for a weekend this August and booked one of the premier hotels because it comes with Express Pass (an equivalent of unlimited Lightening Lanes). Wouldn’t it be amazing if during my February 2023 booking at AKL, it came with unlimited Lightening Lanes too! What matters here is not the pricing, but perception of value. Packaging is what matters. Disney can always figure out the pricing that will give them the profits that they want. (3) I would love another theme park inside World that goes on all in on LARPing: each Land could be a different themed environment with rides that enhance that theme. Now back to Chapek. Why Chapek does not have the imagination for at least some of this or other imaginative directions is beyond me. This is particularly puzzling from a company with a whole division called Imagineering! … Chapek was likely renewed because Disney stock is holding up better than Netflix and viewed as a Buy by most of Wall Street.
First I think Chapek should be canned and is not the right person for the job, it just shows how ignorant the board is. As for the money, it was actually less than what I thought it would be. It’s still ridiculous, but to put it perspective, basketball and baseball players are making 30 and 40+ million a year to play a sport, and not running a global company. Big companies, WDW is just 1 of maaanny, do not care about their customers until they stop spending money on them. And yes all companies are focused on shareholders and prophets, heck if I owned a company, so would I. Unfortunately, companies are not just content on making a prophet, they are greedy and are always trying to have a “Record” profit quarter or year, oil companies is a good example. We have went to WDW over 40 times but our last 4 family trips have been to Universal.
I can’t help but wonder if all the money grabbing by Disney right now is akin to the old say, “Strike while the iron is hot”. They know people are sick of being pent up due to Covid and are now flocking to the parks to let off steam over the last several years. So, hey, stick it to them while they can. Soon the crowds will dwindle and then Disney will more than likely start making “cuts” and discounts to lure customers back. I just hope people remember all the terrible decisions and things taken from them and tell Disney “No” but not returning.
Unfortunately with all the scandal that Disney has intentionally embroiled itself in it appears that the rotten core of Disney is beginning to eat its way to the surface. Such darkness cannot be hidden forever, and alas for me an my family and extended family (we typically bring about 40 with us each year–and I assist many people with their Disney planning) this year’s trip will be our last. It is sad seeing such a huge legacy collapse in on itself from poor leadership and a flawed direction.
I totally agree. It upsets me that they renewed his contract. Disney has went downhill since returning from Covid and I wholeheartedly believe it has everything to do with Chapek. We have been huge Disney fans as well, foregoing all other trips to go there. Not anymore.
They saw Covid as a way to money grab and they have done it. Sad that they would take advantage and basically price middle class families out of the ability to visit.
Sad that the “board” is so money driven – granted every company has a right to make a profit, but when doing their bidding the smart board sees the value of it’s support in its customers. When that is eroding and you stay status quo with a leader that not only does not seem to have the customers in mind but also only sees things in dollars is sure to doom any organization. I have been a park goer two to three times a year for many years which now is not going to happen. Why would I want to spend more money for a less than satisfying experience due to management that really does not care what those that pay the freight think!
Shame on the BOD and Disney is falling fast. Sorry Walt!
So true
Tom,
Thank you so much for your commentary on the renewal of Bob Chapek contract. It helped me as the family planner decide again this year NOT to go back fir another year or more. We are DVC Boardwalk , past annual pass and past D23 members and stock holders. . This contract extension has left us in mourning for our old WDW with no hope for anything magical in the foreseeable future. We used last years cancelled trip money for a European River cruise and still came out ahead!
We will stay tuned! Your blog remains our guiding light lol!
He is running Disney into the ground. Disney stock is way down, and going with the woke culture is driving more and more people away. He is not a visionary like previous CO’S, and is ruining Disney, high prices, and not caring about guests.
Nailed it
Disney must have 3 more years of wanting to do things that make the guests enraged,
The probably think they will use him to make all of the horrible announcements then hopefully appoint someone we all would like and give us a fairy tale ending .
I’m still so mad I’m staying away, of which I thought would never happen. Hold on to your hat… er… ears! Here comes more bad news!
I’m a stockholder, and visited DWR many times and camped in Ft. wilderness. This was 20 years ago. I feel for this new generation they have to break the bank with parking, ticket prices fast pass and hotels. Yep everyone likes the mouse. but really how much is enough to enjoy the mouse. One response was to freeze out Disney until they can come to grips with the CEO Chapek does not have the consumer in mind. Alas it has become all about the money. People give Disney a rest and go to Universal!!!!
If walt was alive he would be discussed. I agree with you. It about how much money he can pockets while people is struggling. He knows times are tough but Bob chapek doesn’t care. The only way to make him see what’s going on is everyone stop patronizing DW && go to Universal Studios, then he will know. Sometimes action is better than words
It’s like tyrants whi raise taxes when their economies are failing…
I was most disappointed that the Board of Directors voted to extend Chapek’s contract for another three years. It demonstrates their lack of understanding of the guest experience, lack of concern for the continuous price increases, and disregard for the challenges and stress imposed by park reservations, Genie+, Park Hopping, and increases in unsafe guest behavior.
Someone commented above about writing to Disney leadership. I have done that. Makes no difference. I believe that Chapek has no understanding of the needs of Disney guests and I also believe that he lacks concern for a positive guest experience. For whatever reason, his aim seems to be to virtually make it financially impossible for many people to ever visit Disney. He commented (in one of his speeches) that ” as long as people are willing to pay he will continue to raise prices” speaks for itself. He is running a profit based organization, not a guest-centered vacation location.
That is not what Walt Disney intended. But Chapek is too far removed from the original Disney philosophy to have any desire to keep Disney a family oriented experience. Just look at the menus, there are more alcohol options than food options. Of course people will be out of control, Drinking does that. Children are no longer the target population. If they were, alcohol would not be the focus on the menus. Sad times for Disney and for those who believe in Walt’s philosophy for a place where all families (not just the rich) would have a place to spend quality time together.
I understand that change is necessary for a company to survive and change can be difficult to implement. But change, managed properly, can be successful if the impacted constituents opinions are heard and compromises are considered. Equally important is understanding and meeting the needs of the company’s guests. But Disney seems focused on taking away benefits and perks that make a Disney vacation special and implementing changes that create a less affordable and more stressful vacation.
Disney is focused on shareholders, period !!!!!
For the Board to extend Chapek is evidence that they too could care less about the company (parks) as they continue to pursue an agenda that is inconsistent with the founder’s message. Quickly losing 50% of market cap in 1 year indicates that the board is also incompetent. Either the shareholders must revolt or seek a white knight acquisition. Current price is less than half of the real book value. Sad but I may have seen the last of my trips with the grands after some 30.
Well said!