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Bob Iger’s sensational return as Disney’s CEO came as a shock to even some of the media conglomerate’s senior executives — who only found out about the change in leadership while at an Elton John concert Sunday night.
The company’s board of directors announced Sunday night that Iger would ‘replace’ Bob Chapek as head of the House of Mouse, putting an end to the two-year reign of the new CEO who was once hailed as the Disney heir apparent.
But some senior officials were unaware of the shakeup, The Wall Street Journal reported, only learning about the change in leadership while attending Elton John’s concert at Dodgers Stadium in Los Angeles, which was livestreamed on Disney+.
Among those expected to attend the concert were Dana Walden, the head of general entertainment content; Craig Erwich, head of content for Hulu; Ayo Davis, head of Disney Branded Television; and newly appointed Disney+ President Alisa Bowen.
Chapek was also expected to attend the event, and the company had originally planned for him to introduce the British singer-songwriter from the stage. But CNBC reports he had been told earlier in the day of his demise, after Iger met with the board on Friday.
It is not clear whether Chapek showed up that night, but John was introduced instead by a host for the Dodgers TV network.
Meanwhile, other Disney employees said they were startled when they saw Iger’s email announcing his return, asking others whether the message was real or if it had come from a hacked account.
The shakeup comes as an abrupt return to power for Iger, 71, who had served as Disney’s head exec for more than 15 years before he stepped down in February 2020. He later also stepped down as chairman of the board at the end of last year, receiving compensation of $45.9 million.
But since Chapek, 62, took over the company has been struggling financially, losing a full one-third of its value under his tenure, according to Reuters, even as prices at its theme parks skyrocketed.
He is now expected to receive a $23 million exit package, and will receive even more if share prices bounce back up after falling more than 40 percent over the past year.
Shares are now back up more than 6 percent on Monday, following the news.
Bob Iger made a sensational and sudden return as the Disney CEO on Monday, after stepping down last year
Former Disney CEO Bob Chapek said he initially chose not to speak out against Florida’s Don’t Say Gay bill to balance the needs of customers and employees
Iger had long pegged Chapek as his successor, handing him over the keys to his kingdom in 2020 – despite a slew of false starts that saw him continue to steer the company for more than two years after airing plans to retire – reportedly to the frustration of a waiting Chapek.
At the time, Iger, who famously caused ructions on his way out by forcefully speaking out against Florida’s so-called Don’t Say Gay bill, asserted his retirement was permanent, and that he would not return to the role.
But since Chapek took over the company, it has been blasted as becoming too woke as the House of Mouse further mishandled its relations with Florida Gov. Ron DeSantis over the bill, which bars teachers of students in third grade and below from discussing sexuality.
As a result, DeSantis decided to strip Disney World of its special tax privileges.
The company has also been slammed for becoming more woke, with scenes of a lesbian kiss in kids’ movie Lightyear, and a transgender man buying tampons in TV series Baymax – although those productions were likely signed off during Iger’s tenure.
By Friday, CNBC reports, the board reached out to Iger without any serious candidates in mind to replace Chapek as concerns mounted over Disney’s most recent quarterly earnings report.
The ousted CEO is now expected to receive at least $23 million as part of an exit package, Bloomberg reports, based on calculations using disclosures from regulatory filings.
It reports that Chapek’s contract — which was recently renewed through mid-2025 — entitles him to collect a salary for the full duration of his term even if he is ousted prematurely. Those paychecks add up to about $6.5 million, according to Bloomberg’s calculations.
He is also entitled to a pension, which was valued at $16.9 million last year. And he holds a trove of stock options and stock awards that haven’t yet been vested.
In addition, Bloomberg reports, Chapek has a so0called nonqualified deferred compensation plan, akin to a large 401(k) that lets employees invest some of their earnings into equity and bond funds. Last year, he had about $8.5 million in the account.
Some top Disney executives only found out about the sudden change in leadership while attending an Elton John concert at Dodger Stadium, that was being livestreamed on Disney+
Disney shares shot up on Monday, increasing more than 2 percent over the past five days, after plummeting 40 percent over the past year
Chapek’s reign at Disney was originally hailed, as he helped the media giant through the COVID pandemic.
For fiscal year 2021, Disney posted revenue of $67.4 billion, up 3 percent from the year before, and net income of $2 billion following a net loss of $2.8 billion in 2020, when the pandemic hit.
In its filing at the time, Disney executives said: ‘Mr. Chapek, as Chief Executive Officer, delivered strong performance given the unprecedented challenges resulting from the COVID-19 pandemic and meaningful shareholder value, driven by exceptional execution of the company’s key strategic initiatives.’
CFO Christine McCarthy tempered investor expectations for next year by forecasting growth of less than 10 percent in the most recent quarterly earnings report last year
They said that since March 2020, when the pandemic arrived in the United States, Chapek has ‘adeptly managed the significant disruption of the company’s businesses resulting from the COVID-19 pandemic and guided the company’s new management team leading to our direct-to-consumer efforts.’
And, they added, Chapek ‘took meaningful and innovative steps at our parks and experiences business, while reopening our parks, including the development of Disney Genie and new Magic Key offerings.’
With Iger still serving as the chairman of the board through December of last year, the company’s stock climbed to just above $200.
At the time, Variety reports, Chapek saw his compensation package hit around $32.5 million, while Iger more than doubled his intake with a compensation package worth $45.9 million — up from $21 million the year before.
Iger also received $3 million in salary for Fiscal Year 2021, up from $1.6 million the year before. And his compensation included a $22.9 million cash bonus, plus $9.5 million in Disney stocks and another $9.3 million in stock options.
That does not include the stock Iger was entitled to receive when his contract expired at the end of the year.
But the company has been struggling in recent months, announcing in its fourth-quarter earnings report earlier this month that while its streaming platform, Disney+, added 121 million new accounts, its streaming business lost $1.47 billion — more than twice the year-earlier loss, the Wall Street Journal reports.
CFO Christine McCarthy also tempered investor expectations for next year by forecasting growth of less than 10 percent, causing shares to plummet to a 52-week low on November 9.
In the aftermath, Chapek vowed to cut costs through hiring freezes, layoffs. He also told executives they should limit business travel to essential trips and conduct meetings virtually whenever possible.
‘I am fully aware this will be a difficult process for many of you and your teams,’ Chapek wrote in a memo, obtained by CNBC. ‘We are going to have to make tough and uncomfortable decisions.
‘But that is just what leadership requires, and I thank you in advance for stepping up during this important time.’
It remains unclear whether the company will move forward with the potential layoffs under Iger’s rule.
In the aftermath of Disney’s dismal fourth-quarter report, Chapek vowed to cut costs with layoffs. It remains unclear whether Iger will move forward with those layoffs under his rule
Susan Arnold, Chairman of the Board, announced the change in a statement Sunday night, in which she thanked Chapek, 62, for his short-lived service in the role.
‘We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,’ the statement read.
The press release cited that Iger already ‘has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as executive chairman 11 months ago.’
Also influencing the company’s decision, according to the statement, was Iger’s illustrious career at the entertainment giant that saw him build it into ‘one of the world’s most successful and admired media and entertainment companies’ in the world.
It further cited the re-crowned CEO’s ‘strategic vision focused on creative excellence, technological innovation and international growth.’
It added that Iger ‘is greatly admired by Disney employees worldwide – all of which will allow for a seamless transition of leadership.’
Actor Josh Gad, who had played Olaf in the Frozen movies and LeFou in the live action Beauty and the Beast film, praised the news on Monday tweeting: ‘I don’t think I’ve ever been so happy.
‘Welcome home @RobertIger — the GOAT is back!!!!’
Adam Aron, the CEO of AMC Theatres, also tweeted: ‘Let me shout this from the mountain top: I have the absolute highest respect for Bob Iger.’
And Matt Braly, the creator of Disney’s Amphibia, expressed his gratitude that Chapek was out as CEO, writing: ‘I cannot tell you how elated the entire animation industry is to see this man gone.’
Actor Josh Gad, who had played Olaf in the Frozen movies and LeFou in the live action Beauty and the Beast film, praised the news on Monday
Adam Aron, the CEO of AMC Theatres, said he has ‘the absolute highest respect for Bob Iger’
Matt Braly, the creator of Disney’s Amphibia, expressed his gratitude that Chapek was out as CEO
In an email Sunday evening, Iger confirmed his return to staffers – in a pointed correspondence that saw him make no mention of his nixed successor.
‘Dear Fellow Employees and Cast Members, It is with an incredible sense of gratitude and humility-and, I must admit, a bit of amazement-that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer,’ the email, obtained by The Ankler, read.
‘When I look at the creative success of our teams across our Studios, Disney General Entertainment, ESPN and International, the rapid growth of our streaming services, the phenomenal reimagining and rebound of our Parks, the continued great work of ABC News, and so many other achievements across our businesses, I am in awe of your accomplishments and I am excited to embark with you on many new endeavors.
‘I know this company has asked so much of you during the past three years, and these times certainly remain quite challenging, but as you have heard me say before, I am an optimist,’ wrote the CEO, who sparked controversy in 2019 when it was revealed he earned $66million a year – about 1,000 times the salary of a typical Disney employee.
‘If I learned one thing from my years at Disney,’ he continued, it is that even in the face of uncertainty-perhaps especially in the face of uncertainty-our employees and Cast Members achieve the impossible.’
The notice added that staffers would be hearing more about the shifting arrangement and what it entails in the coming weeks.
‘In the meantime,’ Iger wrote, ‘allow me to express my deep gratitude for all that you do.’
Under Chapek’s rule, Walt Disney World nixed phrases ‘ladies and gentleman, boys and girls’ during shows
The company’s ‘Lightyear’ spinoff also drew backlash after it showed a same-sex kiss between two characters – a scene insiders said Chapek initially took out, but reinstated following complaints from offended staff
No additional details about the shift were provided by Iger or the company, which has battled a slew of controversies over the past year amid its changing power structure under Chapek – who championed ‘inclusion’ as his foremost focus as CEO.
His ‘inclusion’ campaign – which was widely criticized as a means of pandering to the company’s increasingly outspoken progressive customer base – would see the company nix phrases ‘ladies and gentleman, boys and girls’ during shows at Disney World’s iconic Magic Kingdom.
Rides like the Jungle Cruise, a staple of Disney’s theme parks for nearly 70 years, also got an overhaul to address years of complaints that it offered a racist view of indigenous people as uncivilized ‘savages’ – decisions reportedly made without Iger’s input.
And the company’s ‘Lightyear’ spinoff drew backlash after it showed a same-sex kiss between two characters – a scene insiders said Chapek initially took out, but reinstated following complaints from offended staff.
The family film was subsequently banned in multiple counties in the Middle East and Asia due to its contentious content.
Chapek landed in hot water last spring when he took no public stance on Ron DeSantis’ Don’t Say Gay bill, which barred schools from discussing sexuality or gender with children between kindergarten and third grade
Chapek was criticized for not condemning the bill, to try and quell the backlash with a backtracking statement to staff. (Pictured: Disney employees in California rallying against the bill on March 22)
Insiders at the time described a rift forming between Iger and Chapek, with the former mentor reportedly growing increasingly frustrated with his protegee’s decisions.
Among the calls Chapek made without the chairman’s blessing, according to the outlet, was a dramatic reorganization of the company in October that saw 28,000 theme park staffers laid off to deal with accruing costs spurred by pandemic related closures, and a shift in focus to the company’s streaming service, Disney+.
They also included the revelation of actress Scarlett Johansson’s $35 million salary for starring in Marvel movie Black Widow, which was leaked after Johansson sued over the movie’s release on Disney+, rather than at movie theaters, alleging she was being stiffed and underpaid when compared to her male counterparts.
The conflict reportedly embarrassed Iger, sources told NBC, who remarked that while he is no longer CEO, the company chairman still prided himself on the company’s relationships with A-list talent.
Most importantly, however, Chapek was criticized for not condemning DeSantis’ Parental Rights in Education Act, dubbed by detractors as the Don’t Say Gay Bill.
He had tried to maintain a working relationship with the Florida government following the backlash, but Chapek eventually gave into his employees’ demands, releasing a statement declaring Disney’s opposition to the bill.
In the memo, Chapek reiterated the park’s policies: ‘I want to be crystal clear: I and the entire leadership team unequivocally stand in support of our LGBTQ+ employees, their families, and their communities.
‘We are committed to creating a more inclusive company – and world.’
Disney World lost its special zoning status — known as the Reedy Creek Improvement District — which allowed it to save billions in tax dollars
Weeks prior, Iger, whose reign was largely unmarred by such disputes, notably took a public stance against the legislation.
Several longtime Disney staffers said Chapek’s handling of the situation led to ‘the worst week they’ve ever had working at the company,’ Deadline reported at the time.
According to the outlet, sources close to the company at the time said that employees were calling Iger to air complaints and their dissatisfaction with Chapek.
A rift apparently formed between Iger and Chapek after actress Scarlett Johansson sued the company over Black Widow’s release on Disney+ rather than in theaters and claiming she was being underpaid
Chapek, meanwhile, remained adamant that the company could better advocate for inclusivity through its increasingly woke content – and by working with legislators behind the scenes, an internal memo sent to staffers during those struggles revealed.
The memo’s revelations, however, were met with outrage by senior staff, who called Chapek’s decision weak and disappointing. Chapek later was forced to apologize, publicly decried the bill and announced Disney had paused all its political donations within Florida, where Disney World has operated for more than a half century.
Chapek explained he wanted Disney to be a brand that could ‘rise above’ the political fray, and serve as a beacon of optimism and harmony in the world.
‘What we try to do is be everything to everybody,’ Chapek said at the time. ‘That tends to be very difficult because we’re The Walt Disney Company.’
‘We certainly don’t want to get caught up in any political subterfuge, but at the same time we also realize that we want to represent a brighter tomorrow for families of all types, regardless of how they define themselves,’ he said.
After Chapek announced the halting of Florida political donations in his apology, Florida governor DeSantis responded by beginning the legislative process of stripping away Disney’s special zoning status – known as the Reedy Creek Improvement District – which allowed it to save billions in tax dollars over the years.
This rapid surfacing of these controversies would contribute to the company’s failure to rocket back to its former wealth this year as Wall Street had expected, as well as tensions between Iger and Chapek, who, once the best of friends, were reportedly not even on speaking terms at the time of Chapek’s succession.
Late last year, tension between the pair was palpable at a going-away party for Iger, held at his posh Los Angeles estate in Brentwood.
At the gathering, which saw roughly 50 guests – most of them Disney staffers – Iger spoke at length about his time at Disney in front of the crowd, spending more than 10 minutes praising former colleagues.
However, noticeably absent from the exec’s songs of praise was Chapek, who Iger barely mentioned, sources told NBC.
‘It was extremely awkward,’ said one of the guests, who asked to remain anonymous because the party was private. ‘The tension was palpable.’
Their rift, according to insiders, was said to have caused issues for Chapek – who sought to ingratiate himself among other Disney executives who remained loyal to Iger because of his glittering tenure at the helm of the entertainment giant.
Chapek’s subsequent mismanagement of the Don’t Say Gay Scandal seemed to only worsen the situation, with Iger reportedly unhappy by his successor’s weak, flip-flopping response.
With that said, neither Disney nor Iger have offered an explanation behind Chapek’s apparent dismissal. Chapek has also yet to comment on his apparent ousting.
DailyMail.com reached out to Disney for comment on the sudden shakeup Sunday night, but did not immediately receive a response.
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