A day after Disney declared victory over activist investor Nelson Peltz, CEO Bob Iger said the board is proceeding with “urgency” in trying to identify the next chief executive with the “distraction” of the proxy fight over.
“This was decisive in terms of how shareholders voted,” Iger said in an appearance Thursday morning on CNBC from Disney’s Burbank, Calif., headquarters, about the results of the April 3 meeting.
Succession “is the board’s No. 1 priority,” Iger said, saying the board’s search committee to find a CEO successor met seven times in 2023 and plans to meet even more frequently this year. “They’re treating it with a sense of urgency because it is so important,” Iger said. The board is “taking it very, very seriously” because “I’m not going to be here forever.” Iger declined to provide a timeline for the selection of a new CEO; his contract extension with Disney runs through the end of 2026.
Internal CEO candidates the Disney board is said to be considering are its four division heads: Disney Entertainment co-chairs Dana Walden and Alan Bergman, ESPN chairman Jimmy Pitaro and Josh D’Amaro, head of Disney Parks, Experiences and Products. It’s possible the board also is casting a wider net to consider outside contenders.
“Not only is it important to choose the right person [as Disney’s next CEO], it’s really important to give that person all the opportunity in the world to be successful in the job,” Iger said.
Iger, interviewed by CNBC anchor David Faber, claimed that Peltz’s activist investor insurgency did not spur him or the Disney board to act more quickly on any strategic plans.
“If anything, it was distracting,” Iger said. He downplayed the effect of “personal animus” at play in the board fight — referring to former Marvel Entertainment head Ike Perlmutter, who pooled his 30 million Disney shares with Peltz’s Trian — and said he was defending the company and the board, rather than defending himself. “I tried not to consider it a personal attack on me,” he said.
Iger said one silver lining of the proxy fight is that it gave the board and some members of Disney’s management team the opportunity to meet with and listen to shareholders more actively. “If anything that came of this that’s positive,” he said, it was the ability to increase “engagement with shareholders, and that’s a very good thing.”
Speaking about Disney’s streaming business, Iger reiterated that the company is shooting for “double-digit profit margins.” He noted that Disney is launching a crackdown on password sharing this summer in some markets before rolling out more widely in September. He said Hulu on Disney+, the integration of the two services for bundle subscribers that launched last week, has been performing well. “We know what we need to do to be successful in streaming,” Iger said.
When Disney launches the standalone flagship ESPN service launches in 2025, Iger said, there is a “great bundling opportunity” with Disney+ and Hulu. Meanwhile, Iger said the sports-streaming bundle joint venture among Disney, Fox Corp. and Warner Bros. Discovery is proceeding with the belief that it will clear regulatory scrutiny. “We think it’s a sports fan’s delight,” Iger said, declining to discuss pricing of the sports service slated to debut this fall.
At the April 3 virtual meeting of Disney shareholders, investors voted to reelect the current 12-member board of directors by a “substantial margin” over the candidates nominated by Peltz’s Trian and a smaller investment firm, Blackwells Capital, according to Horacio Gutierrez, Disney’s senior EVP, chief legal and compliance officer.
Per the preliminary tally, Iger got 94% of votes cast in his favor for board reelection (Disney shareholders were able to vote their shares for up to 12 nominees). Peltz had 31% of shareholder votes in his favor and Trian’s other nominee, former Disney exec Jay Rasulo, got even less. Maria Elena Lagomasino, the incumbent Disney director whom Trian had urged investors to kick off the board (along with board member Michael Froman), received 63%, twice as many as Peltz.
The pricey proxy fight waged by Peltz, even though he lost his bid to get on Disney’s board, succeeded in shining a spotlight on investor concerns at the Mouse House — including with its CEO succession planning process. Influential proxy-advisory firm Institutional Shareholder Services had recommended Disney shareholders elect Peltz to the board citing in part the company’s “failed” CEO succession planning.
Iger said the COVID pandemic had presented his CEO successor — Bob Chapek, who was ousted in 2022 after less than three years on the job — an “enormous” challenge. The CEO transition four years ago could “not have happened at a worse time for the company,” Iger said.
In the CNBC interview, Iger claimed he doesn’t pay attention to commentary from Elon Musk, the megabillionaire owner of X who has accused Disney of producing “woke” films (and told Iger and other advertisers to “go fuck yourself” after they dropped ad spending on X over a Musk’s controversial comments on an anti-Semitic conspiracy theory). “I ignore it,” Iger said. “People have been coming after me and the company for years. I don’t get distracted by those things.”
Peltz also questioned Disney’s “woke” Marvel filmsfeaturing Black and women superheroes like “Black Panther” and “The Marvels.” “Why do I have to have a Marvel [movie] that’s all women?” Peltz said in a recent FT interview. “Why do I need an all-Black cast?”
Asked by Faber about critiques of Disney’s “woke” content, Iger said, “I think the term ‘woke’ is thrown around rather liberally… I think a lot of people don’t even understand really what it means.”
He continued, “The bottom line is that infusing messaging as a sort of No. 1 priority in our films and TV shows is not what we’re up to. They need to be entertaining. And look, where the Disney company can have a positive impact on the world, whether it’s fostering acceptance and understanding of people of all different types — great. But generally speaking, we need to be an entertainment-first company.”
Speaking about Disney’s $1.5 billion investment in Epic Games, Iger said the priority was to launch a Disney universe that will live alongside Epic’s “Fortnite” to “make sure that’s successful” and “see where we can invest further beyond that.”
