LOS ANGELES (Reuters) - Walt Disney Co Chief Executive Bob Iger will step down as CEO in March 2015 after nearly a decade at the helm, setting in motion a succession plan for the largest U.S. media and entertainment company.
The company did not mention possible successors, but industry speculation centered on Chief Financial Officer Jay Rasulo and the head of Disney’s huge theme parks and resorts division, Tom Staggs.
Iger, 60, succeeded Michael Eisner as Disney’s CEO in October 2005, which means his tenure as chief executive would be less than a decade long.
Eisner’s reign at Disney, which ranks among the longest and most storied — for better and worse — in CEO history, lasted 21 years, from 1984 until 2005.
Disney shares fell 1 percent to close at $31.70 on the New York Stock Exchange. The company has increased in value by more than a third since Iger began his term.
Disney, which generates some $40 billion in annual revenue, is grappling with economic uncertainty and its impact on its three largest divisions: media, its movie studio and theme park resorts.
In August, the company posted better-than-expected quarterly results, but Wall Street analysts warned that low consumer spending may pinch in coming months.
“It’s wise for Disney’s board to have a very clear succession plan,” said Miller Tabak & Co analyst David Joyce.
Still, he said, Iger’s plan to leave the CEO post is “a little surprising given he’s still a little young-ish CEO.”
Speculation that Iger might have identified a successor picked up in 2009 after Disney said Staggs and Rasulo were swapping jobs.
Staggs, 50, was known as a favored executive and is considered a potential successor to Iger, but the former Wall Street analyst lacked operational experience. By putting Staggs in charge of Disney’s all-important theme parks, analysts said, Iger may have been affirming Staggs as a strong internal candidate for the top job while giving the finance chief much-needed operating experience.
Iger will assume the post of chairman, in addition to CEO, starting in March 2012, when Chairman John Pepper retires. Iger will hold the jobs through March 31, 2015, and continue as executive chairman through June 30, 2016.
His annual salary rose to $2.5 million from $2 million now. Iger also could receive as much as $12 million in annual cash bonuses and up to $15.5 million a year in options and restricted shares.
Iger, who got his start as a TV weatherman, joined Disney after Eisner’s deal to buy Capital Cities/ABC in 1995, a $19 billion deal that caught everyone flat-footed when announced. Iger served as Eisner’s second-in-command for the last five years of his tenure.
His loyalty and deference to Eisner led to mocking from media insiders that Iger had no thought that Eisner did not already approve.
After taking over in 2005, however, Iger stunned the very same people with bold moves that betrayed his prior image. In a matter of months, he not only smoothed over the friction Eisner created with Apple Inc co-founder Steve Jobs, but also convinced Jobs to sell Pixar animation studios to Disney for $7.4 billion.
In addition to the studio, that deal also made Jobs the company’s largest individual shareholder and landed him on Disney’s board, giving Iger unfettered access to Jobs’ insights on how to re-orient an old media company to the digital world.
Iger bought Marvel Entertainment for $4.4 billion, aggressively moved Disney programing online through partnerships with online video service Hulu and others, and ousted longtime executives such as Dick Cook, David Westin and Stephen McPherson who he felt were underperforming.
In terms of style, Iger and Eisner could not have been more different. Eisner was brash, aggressive, confrontational and hands on in every aspect of Disney’s business. Iger is quiet, laid back, borderline robotic and prefers to allow those under him to run their fiefdoms as they see fit.
“He’s a very calm personality,” Wunderlich Securities analyst Matthew Harrigan said, adding that “people are very happy with Iger from a strategic perspective.”
Iger rose to the CEO role in part because of disenchantment among investors at Eisner’s leadership, particularly the way he handled the $66 billion hostile takeover offer from Comcast Corp in 2004.
At the company’s annual shareholder meeting following that offer, Eisner received a stunning 43 percent no-confidence vote from shareholders and was forced to relinquish his chairman of the board title.
Reporting by Lisa Richwine. Editing by Peter Lauria and Robert MacMillan