‘Bob is the right leader at the right time for Disney’: Chapek signs a three-year contract extension
Disney’s embattled CEO Bob Chapek has had his contract extended for a further three years, despite presiding over one of the most turbulent times in the company in recent memory.
Chapek, 61, took over the company in February 2020 and earned $32.5 million in the year to October 2, 2021.
His compensation was comprised of $2.5 million in salary, $10.2 million in stock awards, and $3.8 million in stock options – plus a $14.3 million bonus.
The pay for the next three years has not been revealed.
His contract was extended at the end of a two-day meeting of Disney’s board.
The directors voted unanimously to replace his current deal, which expires in February 2023, with a new three-year agreement starting July 1.
Bob Chapek, 61, CEO of Disney, is seen on June 2 during the opening ceremony for Avengers Campus inside Disney California Adventure. On Tuesday his contract was extended for a further three years
Disney’s shares closed down 0.71 percent on Tuesday at $95.92 – a far cry from their March 2021 high of $197
‘Disney was dealt a tough hand by the pandemic, yet with Bob at the helm, our businesses — from parks to streaming — not only weathered the storm but emerged in a position of strength,’ said Susan Arnold, chairman of the board.
‘In this important time of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob’s leadership is key to achieving that goal.’
The board said in a statement: ‘Bob is the right leader at the right time for The Walt Disney Company, and the Board has full confidence in him and his leadership team.’
Yet the stock market felt otherwise, with Disney’s shares closing down 0.71 percent at $95.92 – a far cry from their March 2021 high of $197.
Disney’s share price has fallen 38.06 percent in the last six months, as Chapek’s honeymoon phase ended, and he was forced to confront multiple crises.
Disney’s animated movie ‘Lightyear’ flopped in its first weekend in theaters, with the new Toy Story spin-off film earning $51.7 million in North America.
‘Lightyear’ opened in 4,255 locations domestically and in 43 markets overseas – but 14 Muslim-majority nations banned the movie from playing in their cinemas because Disney included a lesbian kiss
Not only did the movie open lower than expected, but it also failed to conquer ‘Jurassic World: Dominion’, which held on to the first-place spot with $58.7 million in its second weekend.
Tim Allen (pictured in 2020) was overlooked to reprise the role of Buzz Lightyear in the spin-off movie
Expectations were high for ‘Lightyear’, an origin story about the movie that inspired the space ranger action figure in the ‘Toy Story’ movies, with some analysts pegging the movie for a $70 million North American debut. But it didn’t come close to that figure.
The disappointing start came after controversy over Disney’s decision to include a brief kiss between a lesbian couple in the movie and to replace the conservative star Tim Allen with Chris Evans as the voice of Buzz Lightyear.
He has been at loggerheads with the governor of Florida – the state which, since the founding of Disney World in 1967, has granted special administrative status to the company on the site.
Ron DeSantis, the governor, in April revoked Disney’s special status after the company criticized his enacting of the ‘Don’t Say Gay’ bill, which prevents discussion of homosexuality in classrooms with young children.
Disney’s tepid response to the controversial bill led to protests and worker walkouts
Disney employees are seen protesting against the ‘Don’t Say Gay’ bill on March 22 in California
Chapek was initially unwilling to speak out publicly against the bill – something which his predecessor Bob Iger, 71, rebuked him for.
The bill, which Joe Biden called ‘hateful’ but which supporters say protects children, was signed into law by DeSantis in April.
On June 16, Disney announced it is delaying the opening of its Florida tech campus, which would have relocated 2,000 workers from California.
However, Disney officials insisted the delay had nothing to do with tensions with the clash with DeSantis and said they simply needed more time to build the campus.
It will house digital technology, finance, and product development employees – in the Orlando area and the company wanted to give workers additional time to adjust to the transition.
The new opening date for the Florida campus will be in 2026. The company’s giant theme park resort, Walt Disney World, is located about 20 miles away.
‘While a growing number of our employees, who will ultimately work at the campus, have already made the move to central Florida, we also want to continue to provide flexibility to those relocating, especially given the anticipated completion date of the campus is now in 2026,’ Disney said in a statement.
Chapek has come under fire for his clumsy handling of the row with DeSantis.
On March 7 he released a memo telling staff that Disney hadn’t released a statement sooner because ‘they are often weaponized by one side or the other to further divide and inflame.’
He later apologized for the company’s handling of the bill, saying Disney would pause all political donations in the state and increase support for advocacy groups working to combat similar legislation in other states.
Disney employees staged a series of walkouts earlier in the month in protest at Chapek’s failure to be more vocal on the issue – Disney employs 77,000 people in Florida.
Iger, meanwhile, tweeted his criticism of the new legislation.
He told CNN+ that he thought it was a clear-cut issue.
‘A lot of these issues are not necessarily political,’ said Iger.
‘It’s about right and wrong.’
Bob Iger appeared to take a swipe at his successor as Disney CEO and his handling of the ‘Don’t Say Gay’ bill controversy, insisting that the issue was ‘about right and wrong’
Iger (right) is seen with his successor Bob Chapek (left), who took over in February 2021
Iger was asked by host Chris Wallace whether he felt a ‘vanilla’ company like Disney, which is not known for being edgy or political, should weigh in on controversial social issues.
What is the Parental Rights in Education bill?
HB 1557 was introduced by two Republican members of the Florida Legislature – Representative Joe Harding and Senator Dennis Baxley.
They say the bill’s aim is to ’empower parents’ in their children’s education, and make teachers recognize the distinction between ‘instruction’ and ‘discussion.’
‘What we’re prohibiting is instructing them in a specific direction,’ Baxley said about how teachers lead students in a classroom.
‘Students can talk about whatever they want to bring up, but sometimes the right answer is, ”You really ought to talk to your parents about that.”’
The bill applies to children in kindergarten through third grade.
It states that ‘classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur.’
It also requires districts to ‘adopt procedures for notifying a student’s parent if there is a change in the student’s services or monitoring related to the student’s mental, emotional, or physical health or well-being,’ something LGBTQ advocates argue could lead to students being outed to their parents without the student’s knowledge or consent.
It was passed on March 8 in a 22-17 vote. The state House had approved the bill late February. DeSantis signed it into law on March 28 and it will come into effect on July 1.
‘I had to contend with this a lot,’ said Iger.
‘And the filter that I used to determine whether we should or should not weigh in, considered a few factors: What would its impact have on our employees, on our shareholders and our customers.
‘And if any one of those three constituencies had deep interest in, or would be affected by, whatever the matter was at hand then it was something that I thought we should consider weighing in on.’
Iger, who has reportedly irritated Chapek with his continued high-profile, setting the two men at loggerheads, said business leaders needed to be courageous.
He said that when dealing with right and wrong, or with something ‘that does have a profound impact on your business,’ he thinks one has to do ‘what is right and not worry about the potential backlash to it.’
Iger added: ‘I think CEOs, you know — one of the things that CEOs accept as a responsibility is that they’re going to have to weigh in on issues, even if voicing an opinion on those issues potentially puts some of your business in danger.’
On February 8, Biden spoke out against the bill, tweeting: ‘I want every member of the LGBTQI+ community — especially the kids who will be impacted by this hateful bill — to know that you are loved and accepted just as you are.
‘I have your back, and my Administration will continue to fight for the protections and safety you deserve.’
Several weeks later, on February 24, Iger tweeted: ‘I’m with the President on this! If passed, this bill will put vulnerable, young LGBTQ people in jeopardy.’
He told Wallace that he spoke out because he felt the bill was ‘potentially harmful to kids’.
‘So I happen to feel and I tweeted an opinion about this ‘Don’t Say Gay’ bill in Florida,’ Iger said.
‘To me, it wasn’t politics, it was what is right and what is wrong, and that just seemed wrong.
‘It seemed potentially harmful to kids.
‘And it seemed as though it would do exactly what it shouldn’t do.
‘And that is to foster compassion, and understanding and acceptance, and enable young kids who might be gay to feel more confident, more comfortable, more part of society, if it could be discussed freely, as opposed to kept in the closet.’
Chapek (left) and Iger (right) are pictured with the chief creative officer of Pixar, Pete Docter, on June 16
Chapek (left) and Iger are pictured on September 30 at the 50th anniversary of Walt Disney World in Lake Buena Vista, Florida
Iger was widely liked and appreciated in Hollywood, and admired in the industry for having presided over a series of intellectual property acquisitions — of Pixar, Marvel and Lucasfilm — which will likely go down in media history as three of the smartest deals ever.
The media mogul, worth an estimated $690 million, was originally set to retire in the summer of 2018.
The Board of Directors then extended Iger’s contract until 2019, to oversee the acquisition of Fox and the launch of Disney+.
His contract was extended even further until 2021, and Iger eventually stood aside in February of that year.
He remained with the company as Executive Chairman until December 31, 2021 – a move that apparently irked his successor, with Iger saying that he stuck with the company because they needed him, due to the pandemic.
‘A crisis of this magnitude, and its impact on Disney, would necessarily result in my actively helping Bob [Chapek] and the company contend with it, particularly since I ran the company for 15 years,’ Iger told the New York Times.
Chapek was furious, CNBC reported.
‘Chapek was furious when he saw the story, according to three people familiar with the matter,’ they reported.
‘He had not expressed a need or desire for extra help. He wasn’t looking for a white knight.
‘Chapek felt he was essentially doing it again, leaving him as a hapless second banana, according to people familiar with his thoughts.
‘Chapek was already reporting to Iger, the board’s chairman, anyway.’
It was also noted that, at a leaving party, Iger thanked his former colleagues while barely mentioning Chapek.
‘It was extremely awkward,’ said one of the guests. ‘The tension was palpable.’
Chapek also had a high-profile run in with one of Disney’s biggest stars, Scarlett Johansson, who was angered at Disney’s decision to release her film Black Widow straight to streaming.
Chapek defended the decision, but Johansson sued, with a settlement agreed in September 2021.