Disney Eyes Iger Successor: 4 Insiders in the Race Amid Shifts

Key Takeaway

• Disney is evaluating internal candidates for CEO Bob Iger's successor, including Josh D’Amaro, Alan Bergman, Dana Walden, and Jimmy Pitaro.
• Succession planning gains urgency amid activist investor pressures and strategic shifts towards streaming.
• The chosen successor will navigate challenges in streaming profitability and content strategy amidst cost reductions.

Succession Planning at Disney

In the aftermath of a high-profile proxy battle with activist investors led by Nelson Peltz, Disney's focus has shifted towards finding a successor for CEO Bob Iger. Iger, who has been at the helm for the majority of the past 18 years, successfully countered Peltz's challenge earlier this month. However, the question of his successor has become a primary concern for investors. Disney's board has been actively reviewing both internal and external candidates with the assistance of a national search firm. Among the internal candidates are Josh D’Amaro, head of Disney’s theme parks; Alan Bergman and Dana Walden, co-chairs of Disney Entertainment; and Jimmy Pitaro, chair of the ESPN sports division. Iger's contract is set to end in 2026, indicating a lengthy internal vetting process ahead. This succession planning process is under intense scrutiny due to Disney's historical challenges with CEO transitions. Iger had initially planned to retire by 2015 but extended his tenure multiple times before briefly stepping aside in 2020. His successor, Bob Chapek, lasted only 33 months before Iger returned to the CEO position.

Internal Candidates' Profiles

The four main internal candidates for Iger's position bring diverse experiences and achievements to the table. Dana Walden, who joined Disney in 2019 following its acquisition of 21st Century Fox, has a strong background in television, having led Fox to significant Emmy wins and ratings success. If chosen, she would be the first woman to lead Disney. Alan Bergman, a key figure in Hollywood, has been instrumental in Disney's cinematic success, overseeing the production of blockbuster films under Disney's various studios. Jimmy Pitaro has been pivotal in transitioning ESPN towards a digital future, with plans to launch a comprehensive streaming service in 2025. Josh D’Amaro, credited with the significant recovery of Disney's theme parks post-pandemic, has demonstrated strong leadership and innovation in enhancing park experiences and technology.

Challenges and Expectations

Disney's leadership transition comes at a time when the company is navigating cost reductions, activist investor pressures, and strategic shifts in its business model, particularly towards streaming. The performance of the internal candidates in addressing these challenges, especially in streaming profitability and content strategy, may significantly influence their prospects for succession. The company's approach to succession planning has been a point of contention, with past processes leading to executive departures and internal politics. Investors and analysts are closely watching how Disney manages this transition, emphasizing the need for a clear and effective process.

Street Views

• Chris Rossbach, J Stern & Co (Neutral on Disney):

  "Succession is absolutely critical for Disney and one of Iger’s most important tasks will be to find his replacement. We’d like to see a clear process and a deep bench of management talent."

• David Larcker, Corporate Governance Research Initiative at Stanford (Neutral on Disney's succession planning):

  "It makes it a political process, where people are allying internally with different candidates. From a board perspective, they don’t want this to be a spectacle."