Disney has delivered a total shareholder return of 193 percent during Iger's tenure, exceeding the 54 percent from the S&P 500, Orin Smith, Disney's independent lead director, said in a statement.
The board asked Iger to extend his term as CEO, Smith said, "given his outstanding leadership, and to provide continuity of Disney's corporate strategy."
Keeping Iger in both jobs through June 2016 gives the Disney board more time to choose his successor and ensure a smooth transition, Wunderlich Securities analyst Matthew Harrigan said. Disney suffered through a bruising battle when Iger's predecessor, Michael Eisner, was forced out of the company.
Chief Financial Officer Jay Rasulo and Disney Parks and Resorts Chairman Tom Staggs are considered leading candidates to replace Iger as CEO, Wall Street analysts say.
"It certainly makes sense not to fumble around with that role," Harrigan said. "I think you'd like to give it a couple more years to play out."
The culmination of many of Iger's biggest projects will come in 2015, when Disney's $3.7 billion Shanghai theme park is scheduled to open. Also that year, Disney will release a new "Star Wars" movie and a sequel to last year's blockbuster Marvel film "The Avengers."
Iger's existing compensation terms remain in place, Disney said.
Disney shares rose 1.2 percent to close at $63.93 on the New York Stock earlier on Monday before the news of Iger's extended CEO contract.
