Disney needs to plan for a future where Bob Iger is not indispensable

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Bob Iger pitched his 2019 memoir, The Ride of a Lifetime, as his way of sharing the lessons he had learned while running Disney, the world’s most successful entertainment company. 

“At its essence, good leadership isn’t about being indispensable; it’s about helping others be prepared to possibly step into your shoes,” he wrote. That lesson has apparently been lost on Disney, which seems to find Iger unusually indispensable. This week, its board extended the 72-year-old’s contract by two years to December 2026 — 21 years after he became chief executive. 

That long an almost-unbroken run at the top might count as an achievement except for one thing: for a decade now, Disney directors have been saying that finding a successor is a priority — even as one contender after another has left. With the exception of Bob Chapek, who lasted 33 unhappy months, the only person they could find to succeed Iger was Iger. 

Today’s Disney is in many ways dramatically different from the one Iger handed Chapek in 2020, with serious challenges everywhere from the Pixar studio to its ESPN sports network. But in one respect, it looked remarkably familiar this week: Iger’s contract extension echoed those the board gave him in 2013, 2014 and twice in 2017.

Once again, directors felt the need to sweeten his incentives to persuade him to stay in a position most observers think he relishes. This time, it replaced an annual bonus scheme that could match his $1mn salary with one worth up to five times that.

When Iger’s pay was climbing in his first term, he could point to a value-creating run of hits and deals that was unmatched in media. But even then, he lost a shareholder vote on his pay in 2018. Now that Disney’s stock has halved since March 2021, bigger rewards may be harder to justify.

When Iger returned last November, the company said his two main tasks were to set a course for renewed growth and to work with the board on finding a successor. A company that has already tangled with activist investors will need to explain to shareholders why he is being rewarded having not fulfilled the second part of that mandate. 

Critics will inevitably suspect that anyone running the magic kingdom for this long is regally fond of the throne. Jeffrey Sonnenfeld, a Yale management professor who has known Iger for years, said this misreads someone who won’t want the job when he is in his eighties. 

“There are . . . monarchs [in business] who don’t leave office unless there’s a palace revolt. That’s not Bob Iger,” he insisted, describing the latter as more of “a returning general” in the mould of Steve Jobs. 

Disney is not alone in having trouble finding someone ready and able to run a media conglomerate in a period of maximum disruption to revenue streams. “The challenges are greater than I had anticipated,” Iger told CNBC this week, describing television’s business model as “broken”. Few potential successors will be confident that they can tackle streaming losses, Hollywood strikes and political storms at the same time. 

Iger has been given more time to finish the job, but it will take a turnaround worthy of his first-term efforts and a succession process that works if he is to be remembered as a great, rather than just indispensable, leader.