Walt Disney announced major news — a plan for Chief Executive Bob Iger's reign over the "Magic Kingdom" to come to an end. Iger will step down as the company's CEO in March 2015, leaving the company in June 2016.
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Cinderella's Castle
So what does this mean for Disney? The good news is that the respected CEO is committed to the company for nearly another five years. The bad news: he leaves massive shoes to fill.
The stock closed down over 1 percent on the news — Wall Street's disappointed that Iger is leaving at all — and he'll be leaving at age 65, nine years before the mandatory retirement age for board members of 74.
The details of Iger's contract extension: This March he'll replace John Pepper as the chairman of the board. He'll step down as CEO in March 2015, remaining chairman until he leaves Disney in June 2016. Iger's salary was boosted by half a million dollars annually to $2.5 million, with bonuses based on performance.
And Iger's performance has been impressive: he led Disney to record operating results. Since he became CEO in October 2005, the stock has gained more than 31 percent while the Dow has gained just 5 percent. And the company has outperformed the S&P 500 index by five times.
Iger's responsible for expanding the scope of Disney's content and distribution, and making an international company even more global. In his tenure Iger made two bold acquisitions: Pixar in 2006 for $7.4 billion and Marvel in 2009 for $4 billion. And Iger finally pushed the theme parks into China, after many years of negotiations, finally gaining government approval for a park in Shanghai. Iger also pushed the entertainment industry forward towards digital distribution, making ABC the first network to offer TV shows digitally on iTunes.
So who will replace Iger? Disney, which nearly always promotes from within, seems to be grooming two executives: Tom Staggs, who was previously CFO and now runs the parks division, and Jay Rasulo, who previously ran the parks division and now is CFO. Iger asked the two men to swap jobs in 2009, giving them both the kind of broad experience at the company which would help running the whole company.
What about Iger? He'll only be 65 when he leaves the Magic Kingdom. He reportedly has political aspirations. He'll have already run the world's largest media conglomerate — perhaps he'll aim to tackle Washington next.
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