Disney hires back Bob Iger as CEO

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Disney announced a major surprise C-suite shakeup that sees CEO Bob Chapek exiting the company and Bob Iger returning to lead the company.

Iger was previously CEO of the company from 2015 to 2020. He originally worked for ABC prior to it be acquired by Disney in 1995. All told, he spent 50 years with Disney, including staying on for a period after stepping down as CEO in the role of executive chairman.

Chapek succeeded Iger as CEO in 2020, having spent 26 years with the company prior to that. He was tasked with leading the company during the COVID-19 pandemic, which sent the company’s theme park, cruise line, hospitality and film and TV businesses into upheaval.

His short tenure at the company was marred by controversy over its initial silence over a controversial Florida law that restricts select LGBTQ topics from the classroom — a law commonly referred to as the “Don’t Say Gay Bill.”

Disney, which has major operations in the state and has long been seen as supportive of the LGBTQ community, initially kept quiet when controversy around the bill began to circulate.

Employees, fans and shareholders all took notice of the company’s silence and the blame fell on Chapek for not taking action faster.

Disney eventually would publicly distance itself from the bill. Florida’s Republican government fired back by passing a law that will result in Disney losing the unique status the land its Walt Disney World resort operates on holds.

Known as the Reedy Creek Improvement District, the land was set up this way in 1967 through negotiations with local government and the company.

The special status gives Disney significant tax benefits and independence from certain state, county or local laws and regulations, but also requires the company to shoulder significant other expenses normally covered by tax dollars.

When the new law takes effect in 2023, RCID will become illegal, but there is significant concern over what will happen with over $1 billion in bond liabilities held by the district. Under some scenarios, Florida taxpayers could become liable for those debts.

While Chapek initially remained silent on the “Don’t Say Gay Bill,” Iger notably separately spoke out against the anti-LGBTQ legislation (though his stance had no official connection to the company).

Disney stock has suffered lately, though at least some of that could be attributed to overall economic conditions. However, despite rising prices and inflation, many travel and hospitality companies are seeing increased demand as COVID-19 restrictions ease worldwide.

Disney reported worse-than-expected financials for its fiscal fourth quarter — with warnings from management that layoffs and cost-cutting will be coming. Some of those cuts are expected to affect ABC and its owned stations division.

Wall Street appeared to approve of Iger’s return, however, with Disney shares rising after the announcement was made.

It’s not clear how long Iger will be CEO, but Chapek is parting ways with the company completely. He notably does not appear to have been given the title of “interim” CEO.

Chapek had been granted a three-year contract extension by the Disney board in June 2022, which would have kept him at the helm until 2025. Details about any severance packages — so-called “golden parachutes” — were not immediately available though it’s likely he will not walk away from the company without some significant compensation.