By Ben Fritz and Joann S. Lublin
With 16 months until his planned retirement and no successor in
sight, Walt Disney Co. Chief Executive Robert Iger may extend his
tenure for a third time, according to people close to the
company.
Since former chief operating officer and presumed Iger successor
Tom Staggs departed last spring, Disney's board has made no public
comments about its progress or process to find a new CEO.
Inside Disney, few think any executives are currently poised to
ascend. There also is a widespread belief that it would be
difficult for an outsider to get their hands around the world's
largest media conglomerate in less than a year and a half.
"The prevailing theory is that Bob will have to extend to train
his replacement," said one Disney executive. "There will be a steep
learning curve for whoever comes in and no one believes Bob or the
board wants to set someone up to fail."
A further extension of Mr. Iger's tenure may be discussed March
3, when Disney holds its annual shareholder meeting, and its
directors typically meet. March also will mark a year since Mr.
Staggs decided to leave after learning Mr. Iger, who also is
chairman, and the rest of the board had lost confidence in him,
according to people with knowledge of his departure.
Disney -- which runs Hollywood's most successful film studio,
the world's biggest theme parks and a massive television operation
dominated by ESPN -- has prospered under Mr. Iger, who turns 66
years old on Friday.
Disney's total shareholder return during his tenure has been
nearly twice as high as other large media conglomerates, according
to the company. Still, succession questions are sure to only grow
the longer Mr. Iger, who received total compensation of $43.9
million last fiscal year, stays. Disney will report its quarterly
financial results on Tuesday.
"Everyone would be happy with Bob Iger continuing to be the
CEO," said Dan Salmon, a managing director at BMO Capital Markets.
"But it would just push out the issue we're dealing with
today."
When Mr. Staggs left Disney, the company said its board would
"broaden the scope of its succession-planning process to identify
and evaluate a robust slate of candidates for consideration."
Mr. Iger originally was scheduled to step down as CEO in 2015,
after 10 years on the job, and then in 2016. When his exit was
pushed back again to June 2018 just more than two years ago, he
said "this time I really mean it" and has since given no indication
he has changed his mind.
It is unusual but not unprecedented for successful chiefs to
postpone their exits multiple times. Joe Tucci flirted with giving
up the top spot at EMC Corp. for several years. Named CEO of the
data-storage giant in 2001, he remained in command even after
saying he and fellow directors might settle the succession question
by February 2015. Mr. Tucci stepped down last September after Dell
Inc. completed its $60 billion takeover of EMC. The deal was
announced in October 2015.
Mr. Iger's only serious move toward a post-Disney job, chairing
a venture to build a stadium for National Football League teams
near Los Angeles, fizzled when a competing option won last
year.
Mr. Staggs was named COO in February 2015, giving him three
years to prepare for the CEO role after 26 years at Disney. Another
potential successor, Jay Rasulo, left following Mr. Staggs's
promotion.
Last June, Disney directors considered retaining a major
executive-search firm for help finding a new leader but ended up
not doing so, according to people with knowledge of the talks. The
company hasn't said whether it has since retained a search
firm.
The list of outside media executives seemingly prepared to
replace Mr. Iger on short notice is slim, and includes Steve Burke,
CEO of Comcast Corp.'s NBCUniversal, and Peter Chernin, a former
News Corp president who is now a producer and digital media
investor. It is unclear whether either would be interested. Both
declined to comment through their spokesmen.
Another option could be to look to the technology world, as the
lines have blurred between that industry and media. Among the few
possible candidates with relevant experience are Facebook Inc. COO
Sheryl Sandberg, who is on the Disney board. Ms. Sandberg declined
to comment through a spokeswoman.
"A lot of people assume Iger will continue on," said Tony Wible,
a media and entertainment analyst at Drexel Hamilton LLC. "That's
just because there's no better solution to be found right now."
It is possible Mr. Iger could step down as CEO on the current
timetable but remain as chairman to help guide a new leader, a
scenario envisioned in one of his earlier contracts.
Whoever is running the company in 16 months will face a mounting
set of challenges in Disney's television business, as the company
grapples with how aggressively to offer its ESPN and other channels
directly to consumers via the internet.
Questions about the growth of ESPN and other networks were a
drag on Disney's share price for more than a year, beginning in
August 2015. Recently the stock has been on an upswing, gaining
about 19% since November. It was trading at $110.30 a share on
Friday.
Analysts, however, remain divided about how big a problem
slowing ESPN growth will be and how to weigh that against other
factors, such as a promising slate of movies in fiscal 2018 that
includes four Marvel and two Star Wars films.
Write to Ben Fritz at ben.fritz@wsj.com and Joann S. Lublin at
joann.lublin@wsj.com
(END) Dow Jones Newswires
February 06, 2017 05:44 ET (10:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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