It’s the end of an era at The Walt Disney Company.
The conglomerate said on Tuesday that it is naming Bob Chapek as its next CEO, succeeding Bob Iger immediately. Iger is assuming the role of executive chairman and will lead the board through his contract’s end on Dec. 31, 2021.
Chapek, who has been with the company since 1993, has been chairman of Disney Parks, Experiences and Products since 2018. His new contract began on Feb. 24 and ends on Feb. 28, 2023, with his annual base salary increasing to $2.5 million. Chapek, who will become Disney’s seventh CEO, will report to Iger and the board of directors.
On a call with Wall Street analysts Tuesday, Iger said that the Disney board had identified Chapek as his potential successor “quite some time ago.” Iger added that the succession plan, “was not accelerated for any particular reason other than we thought the need was now to make this change.”
Since Iger took over as CEO of Disney in 2005, he has presided over a period of dramatic expansion for the company, leading buys of Pixar for $7.4 billion, Marvel for $4 billion and Lucasfilm for $4 billion. That strategy, a focus on acquiring franchise intellectual property, paid off. In 2019 alone, Disney films grossed an unprecedented $13 billion at the global box office, including seven blockbusters that hit the $1 billion mark.
Disney’s market cap was roughly $55 billion when Iger took over in 2005, peaked at over $260 billion in January, and as of Feb. 25 sits at $231 billion. And Iger has been one of the highest-paid CEOs in entertainment, with his compensation package at $47.5 million for the last fiscal year, falling from $65.6 million in fiscal 2018.
In March 2019, Iger presided over the closing of Disney’s biggest acquisition: the $71.3 billion megadeal for Rupert Murdoch’s Fox assets, including the historic 20th Century Fox studio, Fox Searchlight, FX Networks and National Geographic. Months later, Disney assumed full operational control over streamer Hulu. (Also on Tuesday, Disney promoted Hulu chief marketing officer Kelly Campbell to president of the streaming service.)
“The company has gotten larger and more complex in the recent 12 months,” Iger told analysts on the call Tuesday. “With the asset base in place, and our strategy essentially deployed, I felt that I should spend as much time as possible with the creative side of our businesses … because that becomes our biggest priority in 2021.”
Iger, who joined Disney in 1996, added that he will spend time dealing with all of Disney’s creative endeavors, including at Hulu and Disney+. “My goal is that when I leave here [Chapek] will be just as steeped with all matters creative at the company as I am today,” Iger said.
“Bob, I feel very fortunate to be able to work closely with you during this transition, and I know I will be able to benefit greatly from your wisdom and expertise,” Chapek said on the call, adding that he will “embrace the same strategic pillars” that Iger championed.
Amid competition from Netflix, Iger prioritized the conglomerate’s efforts on its own direct-to-consumer platforms, leading to the acquisition of streaming tech provider BAMTech in 2017 and the launch of the Disney+ platform on Nov. 12 of last year. Since its U.S. debut, Disney+ has picked up 28.6 million paid subscribers.
Iger succession speculation had intensified in recent years following the departure of then-heir apparent COO Thomas Staggs in April 2016, just over a year after he had been promoted to the role. Iger then mulled the idea of running for president in 2017 and then, last year, embarked on a media blitz for his memoir The Ride of a Lifetime. Kevin Mayer, chairman of Disney direct-to-consumer and international, who oversees all streaming efforts, was also seen as an internal candidate for Iger’s CEO role.
“I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated castmembers and employees,” Chapek said. “Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team.”
Iger added on Tuesday, “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”
Michael Eisner, Iger’s predecessor who ran Disney from 1984 to 2005, wrote on Twitter as the news broke that his successor did a “fantastic job” and expanded “the breadth of the overall company, … orchestrating super growth. And he still has his hand on the creative rudder for almost two more years.”
This article was originally published by The Hollywood Reporter.