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Disney Extends CEO Bob Chapek’s Contract

Disney Extends CEO Bob Chapek’s Contract

Disney Extends CEO Bob Chapek's Contract

The Walt Disney Firm has prolonged CEO Bob Chapek’s contract for 3 extra years, the board of administrators introduced. The vote was unanimous and occurred throughout a gathering at Walt Disney World forward of the Disney Want debut. (Up to date July 6, 2022 with contract and compensation particulars.)

“Disney was dealt a tricky hand by the pandemic, but with Bob on the helm, our companies — from parks to streaming — not solely weathered the storm, however emerged ready of energy,” stated Susan Arnold, chairman of the Walt Disney Firm’s board of administrators, in an announcement Tuesday.

“On this essential time of development and transformation, the Board is dedicated to preserving Disney on the profitable path it’s on right now, and Bob’s management is essential to attaining that purpose. Bob is the appropriate chief on the proper time for The Walt Disney Firm, and the Board has full confidence in him and his management workforce.”

“Main this nice firm is the respect of a lifetime, and I’m grateful to the Board for his or her help,” stated Bob Chapek, Chief Govt Officer. “I began at Disney virtually 30 years in the past, and right now have the privilege of main one of many world’s biggest, most dynamic corporations, bringing pleasure to thousands and thousands all over the world. I’m thrilled to work alongside the unbelievable storytellers, staff, and Forged Members who make magic day by day.”

Chapek has labored for the Walt Disney Firm for almost 30 years and is the seventh CEO in almost 100 years. He took over the place from Bob Iger in 2020 simply because the pandemic had closed the parks in Asia, and solely weeks earlier than the closure of each Walt Disney World and Disneyland.

July 6, 2022 Replace: In a submitting with the United States Securities and Change Fee, the Walt Disney Firm revealed the next about CEO Bob Chapek’s contract extension:

“On June 28, 2022, the Board of Administrators of The Walt Disney Firm (the “Firm”) and Robert A. Chapek, the Firm’s Chief Govt Officer, agreed to increase the time period of Mr. Chapek’s employment settlement with the Firm to a few years, starting from July 1, 2022.

The employment settlement can be amended to supply that Mr. Chapek can be granted a long-term incentive award having a goal worth of not lower than $20 million yearly. The proportion of his long-term incentive award comprised of performance-based restricted inventory items can be elevated to 60%. These awards don’t assure Mr. Chapek any minimal quantity of compensation.

The precise quantities payable to Mr. Chapek in respect of such alternatives can be decided based mostly on the extent to which any efficiency circumstances and/or service circumstances relevant to such awards are glad and on the worth of the Firm’s inventory.

Accordingly, Mr. Chapek might obtain compensation in respect of any such award that’s higher or lower than the said goal worth, relying on whether or not, and to what extent, the relevant efficiency and different circumstances are glad, and on the worth of the Firm’s inventory. No settlement has been made to amend some other phrases of Mr. Chapek’s current employment settlement, together with his base wage.”

Chapek’s contract as Chief Govt Officer of the Walt Disney Firm will now expire on July 1, 2025. Per the SEC submitting, Chapek’s base wage of $2.5 million per 12 months stays unchanged. The long-term incentive award included within the contract has elevated from $15 million yearly to not lower than $20 million yearly–that means it may very well be greater than $20 million if the corporate outperforms.

For the sake of comparability, former Disney CEO Bob Iger’s compensation bundle for the 2020 fiscal 12 months amounted to $21 million (a foul comparability as a result of pandemic and Iger stepping down as CEO throughout that point). Extra related numbers are the 2 prior years, when Iger earned $47.5 million for the 2019 fiscal 12 months and $65.6 million for the 2018 fiscal 12 months.

These numbers had been boosted largely by inventory packages that Iger was awarded as incentive to stay with the corporate previous his initially deliberate retirement date. His base wage throughout these years elevated from $2.5 million to $3 million.

Since changing into CEO, Bob Chapek has endured a number of controversies. This started with a rumored falling out between Chapek and former CEO after which Govt Chairman Bob Iger. There have been a number of articles concerning the tensions between Bob Iger and Bob Chapek.

All of that was exacerbated by the bombshell Black Widow lawsuit filed by Scarlett Johansson towards Disney, with insiders blaming CEO Bob Chapek for the dealing with of that embarrassing incident.

This 12 months, there have been high-profile political standoffs between the Walt Disney Firm and Florida, with Chapek and Governor Ron DeSantis at odds. It wouldn’t be partisan to say that Chapek managed the uncommon feat of alienating just about everybody throughout the political spectrum.

That made headlines for weeks, and culminated in Florida Passing Payments to Dissolve Walt Disney World’s Reedy Creek Enchancment District. Books will sometime be written about this saga, however we’ll depart it at solely a few transient paragraphs right here as you’re undoubtedly conscious of what has occurred!

With regard to the theme parks, Chapek has developed or superior a number of unpopular initiatives. He introduced Disney Genie a couple of years in the past as head of Parks & Resorts, and the paid FastPass service debuted whereas he was CEO.

Different controversial selections have additionally been made beneath Chapek’s tenure as CEO. These embrace the tip of Disney’s Magical Categorical, the Disney Park Go reservation system, development delays, an underwhelming fiftieth Anniversary celebration, quite a lot of value will increase, and extra that I’m most likely forgetting at this explicit second.

Previous to changing into CEO, Bob Chapek served as Chairman of Disney Parks, Experiences and Merchandise. In that function, Chapek oversaw the Firm’s largest enterprise section, with operations across the globe and greater than 170,000 staff worldwide. The section contains Disney’s journey and leisure companies, encompassing six resort locations in the USA, Europe and Asia, Disney Cruise Line, Disney Trip Membership, and extra.

Disney’s international client merchandise operations embrace the world’s main licensing enterprise throughout toys, attire, residence items, digital video games and apps, the world’s largest youngsters’s print writer, Disney retailer areas all over the world, and the shopDisney e-commerce platform.

Throughout his tenure on the Parks section, Mr. Chapek oversaw the opening of Disney’s first theme park and resort in mainland China, Shanghai Disney Resort; the addition of quite a few visitor choices throughout Disney’s six resort locations within the U.S., Europe and Asia.

This included the creation of the Star Wars: Galaxy’s Edge lands at Disneyland and Walt Disney World. It additionally encompassed the event of Marvel lands and points of interest across the globe and the growth of Disney Cruise Line with the introduced development of three new ships.

From 2011 to 2015, Mr. Chapek was President of the previous Disney Shopper Merchandise section, the place he drove the technology-led transformation of the Firm’s client merchandise, retail and publishing operations.

Previous to that, he served as President of Distribution for The Walt Disney Studios and was chargeable for overseeing the Studios’ total content material distribution technique throughout a number of platforms together with theatrical exhibition, residence leisure, pay TV, digital leisure and new media.

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As for our ideas on Bob Chapek as CEO of the Walt Disney Firm…ehhh.

We don’t usually supply commentary about govt management on the Walt Disney Firm as a result of it’s robust to take action from the skin wanting in. Fairly merely, followers see what we wish to see. We view issues in reductionist phrases, and will be manipulated by agendas each inner and exterior to the corporate. Consequently, it’s simple to color management within the acquainted phrases of Disney fairytales.

There’s all the time a villain—the one blamed for the gratuitous injection of IP in points of interest. There’s additionally normally an underdog hero—the one who “will get” Disney and would save the parks and restore Epcot’s authentic imaginative and prescient in the event that they simply had somewhat extra energy.

There’s maybe a kernel of reality to a few of this, however simply as a lot is attributable to media savvy (or lack thereof) and the way executives current themselves and mould their very own public picture. Simply take a look at how a lot scrutiny Chapek receives as in comparison with new Parks & Resorts Chairman Josh D’Amaro. The latter has virtually actually been the one to truly make and execute a whole lot of unpopular selections within the final 2 years, and but he largely flies beneath the radar and escapes fan criticism.

With all of that stated, our outsider’s perspective on Bob Chapek just isn’t precisely glowing. In reality, my notion from the start was that Chapek was seen even internally as a hatchet man. That means that he was doubtless introduced in to execute robust and unpopular selections in the course of the pandemic to provide the corporate a reset of types.

As soon as that disagreeable activity was completed, I totally anticipated Chapek to experience off into the sundown, having fun with his riches whereas the corporate introduced ahead a recent face to take credit score for in style and extra optimistic adjustments.

This was solely bolstered in current months. So lots of Chapek’s selections, even from the skin, seemed to be made with solely an eye fixed towards the quick time period. His dealing with of so many issues has felt clumsy, to place it charitably.

I additionally should admit that he was dealt a dropping hand from the outset, taking management of the corporate at a time when unpopular selections must be made. A few of what has occurred throughout his tenure (like paid FastPass) was years coming, an inevitability eventually.

He actually has had his share of unforced errors and dangerous selections, which is why this extension and vote of confidence is considerably stunning. Though it doesn’t seem to be Disney has a deep bench attributable to different current departures and terminations, absolutely Chapek just isn’t the one long-tenured govt who may helm the ship. On the contrary, it looks like another person may most likely navigate current controversies extra competently.

With that stated, Chapek has additionally been in loads of no-win conditions. A number of the current rockiness and unpopular selections would’ve occurred or been made beneath any CEO. (Actually, I’m greater than somewhat bitter that Iger stored extending for years, however jumped ship when he knew issues had been about to get dangerous. I believe a whole lot of this might’ve been higher dealt with with him on the helm, handing off to Chapek proper about now.)

I nonetheless can’t I’m thrilled about this information. Nothing Chapek has achieved has given me any reassurance that he’s the appropriate chief or that he “will get” the Walt Disney Firm or its wealthy inventive legacy. I’ve issues about what the corporate, Walt Disney World, and Disneyland will appear like 3 years from now beneath his stewardship.

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Your Ideas

What do you consider Bob Chapek having his contract because the Walt Disney Firm’s CEO prolonged for 3 years? Assume that is acceptable given the job he’s achieved, or did this information catch you unexpectedly? Any questions? We love listening to from readers, so please share some other ideas or questions you may have within the feedback under!

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