As soon as Disney finishes its proxy war with activist investor Nelson Peltz, it will be ready for a corporate succession battle. Bob Iger has pledged to appoint a successor to lead the company before he leaves at the end of his current contract in 2026, and investors who supported Disney's slate ahead of tomorrow's meeting are likely to hold him to it. Disney's board thought it had solved the question of who would lead the company after Iger. Iger had to come back to run the company after Bob Chapek was fired by the board, which was one of the sticking points in the fight with Disney. After tomorrow's vote, the Disney board will need to find a new CEO and execute a transition in order to appease potential activists. The prospect of being the CEO of one of the world's most influential entertainment companies and one of its most famous brands is a great prospect for any ambitious executive. According to CNBC, the candidates include the Disney parks business chair, Josh D'Amaro; the entertainment division cochair, Alan Bergman; and the long-time head of ESPN, Jimmy Pitaro. Disney has a well-established company culture, which would make it difficult for an outsider to transition. The Disney board's succession plan failed with Chapek in 2020, according to Peltz. Iger returned to Disney in the year 2022, after a rocky tenure in which he was unable to jell with the Hollywood creative community. The board has begun to plan for Iger's departure in about a year and a half. The Disney board has several highly experienced members, including Nike executive chair Mark Parker, former Morgan Stanley CEO James Gorman, GM CEO Mary Barra, and Lululemon CEO Calvin McDonald. Morgan Stanley's CEO, James Gorman, is being promoted by Disney to be part of the search for Iger's replacement. Should Iger win his proxy fight, the four leading internal candidates will have to prove themselves. Pitaro has experience running a large entertainment conglomerate in the past, and that is the strongest argument in his favor. The worldwide leader in sports has a media empire that spans the globe with broadcast channels in the U.S., Latin America, Africa, and Europe, as well as its own streaming service. Pitaro was an executive when he struck a deal with Warner Bros. Discovery and Fox to create their own sports streaming service. He knows a thing or two about the delicate process of negotiating talent contracts. The cable business has been on the decline, which is working against him.
The head of Disney's television and streaming businesses is a person who comes from the company's content engine. She became the first woman CEO of the company when she took over after the sale of his studio and television assets to Disney. She is already plugged into the creative community that is so vital to Disney's movie and television businesses. The board and investors would be reassured by her track record with filmmakers, producers, and actors. Sources told CNBC that she may lack the number-crunching prowess of her peers in the C-suite.
Bergman, the other cochair of Disney entertainment, was elevated alongside Walden in a major executive shuffle. Bergman oversaw all film productions in the U.S. and abroad. Bergman was involved in major acquisitions at Disney. M&A has been important to Disney in recent years, and that is an important feather in his cap. Disney's movie studios released the culmination of a decade-long project, which became the highest-grossing movie of all time, under Bergman's watch. Bergman and the movie studio are under pressure to turn around their performance after a string of flops.
The parks business is a financial powerhouse and the head of Disney is Josh D'Amaro. The division turned over $32.50 billion in fiscal 2023, accounting for a third of the company's overall revenue. Disney's parks business is a truly global enterprise with locations in the U.S., China, Japan, and France. During Disney's war of words with Florida Gov. Ron DeSantis over some of the state's laws targeting LGBTQ+ people, he exhibited a bit of that. The fact that Chapek came up from the parks division makes him inexperienced in the sort of relationship management needed for the entertainment industry. Disney shareholders will vote on Wednesday on whether to grant Peltz and a deputy board seats and accept his proposed changes for Disney.