Stephen Desaulnier | CNBC
Disney The board’s decision to replace Bob Chapek with Bob Iger as the company’s CEO may be the right thing for the company’s future. But the process to make that choice makes everyone involved look less than stellar.
No sudden change in CEO is easy, but the particularities that led to Iger replacing his successor were full of mistakes, deceit and awkwardness.
On June 28, Disney’s board of directors extended Chapek’s contract for another three years.
“The pandemic has hit Disney hard, but with Bob at the helm, our business — from parks to streaming — not only weathered the storm, it’s in a strong position,” Disney chairman Susan Arnold wrote in a statement for the time being. “At this important time of growth and transformation, the Board of Directors is committed to maintaining the successful path Disney 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 management team.”
Less than five months later, the board decided that none of the above statements were true. The board of directors could allow Capek’s contract to expire in February. Instead, since he renewed his contract, the company was on the hook to pay Chapek. tens of millions of severance pay.
In addition, the board of directors will have to tell employees and investors what has changed. Either Disney’s board wasn’t being truthful in its confidence in June, or something so drastic happened during that time that it changed its mind. Disney’s fiscal fourth quarter results weren’t great, but Chapek also told investors that losses from streaming have come down and reaffirmed that the company’s consumer-facing products will be profitable by 2024. Achieving streaming profitability by 2024 has been his vision for the past three years. .
Capek can also reasonably claim that he has a losing hand. He took over as CEO in February 2020, just as the coronavirus pandemic kicked in, bringing attendance to a halt at the theme park. He successfully oversaw a full recovery in park attendance, so much so that he began to introduce ways to limit crowds increase consumer happiness.
Disney+ has been consistently gaining subscribers in the past year, often over 10 million in a quarter, even if Netflixadditions stopped. But in January, investors turned on the idea of growth at any cost to streaming, making Disney+’s subsequent growth less compelling.
Perhaps Čapek’s biggest mistake was getting rid of Aiger instead of making him a trusted advisor. Throughout Čapek’s tenure, he could not help but be compared to the man he replaced. three times beforeIger postponed his retirement to remain CEO of Disney. In this sense, it is not surprising that he returned again, despite his words to the contrary.
Pushing Aiger away instead of accepting his help was always risky. This appears to have led to Čapek’s premature departure as CEO.
WATCH: CNBC’s Jim Kramer and David Faber trade notes on Bob Iger’s return to Disney