[News Figures] "Bob Iger is back"... The Legendary CEO Who Led Disney's Golden Age

Leading Major Marvel·Pixar Acquisition
DMED and Large-Scale Organizational Restructuring Announced
Planning a Restructuring Roadmap
Stock Price Rises Over 6% on Return News

Bob Iger, Chief Executive Officer (CEO) of Walt Disney
[Photo by Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Bob Iger, who led Walt Disney for 10 years, has announced his return to the front lines of management, signaling new changes for Disney, which had been struggling with poor performance. Upon news of Iger's return as CEO after 2 years and 9 months, Disney's stock price experienced a sharp surge.

According to major foreign media including Bloomberg on the 21st (local time), Walt Disney's board of directors announced that they appointed Iger as the successor to former CEO Bob Chapek, who resigned the day before. Following the announcement, Disney's stock price surged 6.30% to $97.58 on the New York Stock Exchange compared to the previous trading day.

Iger had handed over the CEO position to Chapek in February 2020 and stepped down from frontline management. In December last year, he also handed over the chairman position of the board to Susan Arnold. Based on his resignation as board chairman, Iger is returning to Disney after 11 months.

Iger's return is analyzed to be due to Disney's poor performance. According to Disney on the 8th, the streaming division, which includes Disney+, recorded a loss of $1.47 billion (approximately 2 trillion KRW) in the fourth quarter of the fiscal year (July to September). This is more than double the amount compared to the same period last year. Although Disney+ gained 12.1 million subscribers worldwide in the fourth quarter, the Wall Street Journal (WSJ) explained that the increase in subscribers has not translated into profits.

Employee dissatisfaction with former CEO Chapek's management style is also cited as a reason for Iger's return to Disney. Major foreign media reported that pressure from senior executives played a significant role in Chapek's resignation. As he was expected to cut marketing expenses, travel costs, and reduce staff due to poor performance, internal anxiety escalated.

According to WSJ on the 12th, Chapek reportedly sent a memo to senior vice president-level executives and above ordering company-wide cost reductions, including a hiring freeze. Major foreign media reported that after this decision, some senior executives at Disney expressed dissatisfaction and approached the board to voice concerns.

The market expects that Iger's return to Disney could serve as a savior for the company, which has fallen into a slump due to poor performance. Iger is recognized as a figure who greatly contributed to the company's growth during his tenure as Disney's CEO starting in 2005. He led major acquisitions of large content companies such as Pixar and Marvel, and in March last year, he spearheaded the launch of the online video service (OTT) Disney+ (Disney Plus). The service succeeded in securing 29 million paid users in less than three months after its launch.

Upon announcing his return, Iger plans to initiate a large-scale organizational restructuring, including the streaming service division, which has suffered significant losses. Among these, the New Media Entertainment Distribution Group (DMED) is expected to be a primary target of the restructuring. He sent a memo to employees on the day, stating, "Going forward, we will entrust more decision-making to our creative teams and have reorganized the structure to reduce costs," and announced the departure of Karim Daniel, president of DMED.

DMED was established by former CEO Chapek in 2020 under a plan to focus the company's full power on streaming. He appointed his right-hand man Daniel as president and entrusted him with content decision-making authority over several distribution platforms under Disney. Iger said, "Undoubtedly, some parts of DMED will remain, but I believe the driving force of this company comes from organizing the business," and stated that he plans to reorganize the organizations built by Chapek over three years and develop a roadmap for restructuring.

Attention is also focused on whether Disney+’s pricing policy will change with Iger's return. Former CEO Chapek had announced that starting in December, the monthly fee for Disney+ without ads would increase from $7.99 to $10.99. On the other hand, Iger is known to prefer a management style that focuses on subscriber numbers rather than short-term profit increases.

Meanwhile, Chapek, who stepped down due to sudden dismissal, is expected to receive a substantial compensation. According to a contract signed at the end of last year, if Chapek's term ends early, Disney is to pay $54 million (approximately 73.494 billion KRW) in cash and stock.

Iger, returning to Disney, will receive an annual compensation of $27 million. Bloomberg reported that Iger is expected to receive a base salary of $1 million along with company stock worth $25 million annually, granted free of charge.