Disney’s board finally sacked incompetent CEO Bob Chapek and brought back superhero CEO Bob Iger, who ran Disney successfully for more than a decade. Iger wanted a rest after he was paid hundreds of millions of dollars for running one of the world’s most famous companies. However, the chance to rescue Disney must have been too tempting to keep him on the beach. At the heart of this story is the bungling Disney board, which elevated Chapek and recently gave him a three-year contract extension in June.
Iger was impossible to replace. He was one of the great CEOs of the last quarter century. He built up Disney, in part through M&A, adding the animation studio Pixar, and the Marvel and Star Wars franchises to its stable. In addition to Disney’s traditional business, this portfolio made it America’s entertainment company powerhouse.
Chapek was a disaster early on, but he saved his worst sins in recent decisions. He spent too much on Disney’s streaming business, which had grown to rival Netflix and Amazon Prime. However, as the streaming business slowed, Disney’s expenses did not. Chapek underpriced the service and spent too much on production.
Chapek’s decisions had consequences. Disney’s poor financial results, particularly recently, decreased the stock price by almost 50% in the last year.
Who is at fault more than anyone else? The Walt Disney Company (NYSE: DIS) board of directors.
Susan Arnold, Disney’s chairman, captains the board. Most of her business experience was at Procter & Gamble. Selling soap is not much like marketing movies and running theme parks.
Some members should have known better than to put Chapek into the top job. First among them is John Mark Parker. He has been on the board since 2016. He currently leads Nike. Mary Barra, CEO of GM, also should have known better.
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Iger can be blamed for one thing; he was instrumental in the selection of Chapek. At least, when Chapek stumbled, Iger agreed to return.
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