DIS Walt Disney Co

By Rachel Emma Silverman 

For Walt Disney Co., power plays are nothing new.

The media conglomerate has had a history of leadership fights and succession struggles befitting a plot of the fairy tales associated with the company.

In the latest twist, on Monday the company's succession planning was thrown into turmoil when Tom Staggs, Disney's chief operating officer and the heir apparent to Chief Executive Robert Iger, unexpectedly announced he would step down. The news shocked many company employees and media watchers, who assumed Mr. Staggs, a close personal friend of Mr. Iger, would be named to succeed him.

But behind the scenes, Disney directors concluded in recent weeks that Mr. Staggs was unlikely to get the CEO job based on a year of performance as chief operating officer. Now, after Mr. Staggs' resignation, Disney's board will "broaden the scope of its succession-planning process to identify and evaluate a robust slate of candidates for consideration," the company said Monday.

A CEO's expected successor rarely resigns so close to the expected transfer of power, according to succession experts. In rising to the No. 2 slot, Mr. Staggs already had beaten out another rival, former Chief Financial Officer Jay Rasulo, when Mr. Staggs was appointed chief operating officer last year. In June 2015, Disney said Mr. Rasulo would step down.

Mr. Iger was named CEO more than a decade ago, in 2005.

Before Mr. Iger's tenure, his predecessor as CEO, Michael Eisner, was snared in a series of cinematic leadership battles. In 1994, after then-president Frank Wells died in a helicopter crash, Disney Studio chairman Jeffrey Katzenberg abruptly resigned and formed DreamWorks SKG because Mr. Eisner wouldn't appoint him to the open president post. Mr. Katzenberg also sued Disney over the terms of his contract.

Mr. Eisner instead recruited his friend, Creative Artists Agency co-founder Michael Ovitz, to be president; Mr. Ovitz's tenure lasted a little more than a year, although he received a rich severance package that led to a lengthy shareholder suit.

Mr. Eisner also tangled with Roy E. Disney, the son of Disney co-founder Roy O. Disney, in a fractious board dispute. In 2003, Mr. Eisner didn't want the board to renominate Mr. Disney, citing a mandatory retirement age of 72. Mr. Disney resigned from his position as the company's vice chairman, accusing Mr. Eisner of multiple management failures. Another board member, Stanley Gold, also resigned and urged the board to oust Mr. Eisner.

The following year, at Disney's March shareholder's meeting, some 45% of Disney's shareholders -- rallied by Mr. Disney and Mr. Gold -- withheld proxies to re-elect Mr. Eisner to the board.

The company's occasional struggles at the top goes back to the death of Walt Disney in 1966, which ushered in nearly two decades of unsettled leadership.

The company clung fervently to his vision, preserving his office exactly as he left it and adding few new animated features. That left the company creatively dormant. By the 1970s, Disney was the object of hostile takeover attempts.

It wasn't until the board recruited Mr. Eisner from Paramount Pictures to be chairman and CEO in 1984 that the company was seen regaining focus.

In September 2005, Mr. Eisner stepped down as the CEO of Disney, and Mr. Iger has been at the helm ever since. Mr. Iger, 65, has said he plans to retire in June 2018.

Whether Mr. Staggs' announced departure this week means that Mr. Iger will stay on past his announced retirement date remains to be seen, although Mr. Iger hasn't indicated that he plans to do so.

--Ben Fritz, Joe Flint and Joann S. Lublin contributed to this article.

Write to Rachel Emma Silverman at rachel.silverman@wsj.com

(END) Dow Jones Newswires

April 05, 2016 15:15 ET (19:15 GMT)

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