Robert Chapek & Robert Iger/IMAGE: CNBC via YouTube
As shareholders in The Walt Disney Company, NLPC in March 2023 called for the removal and replacement of the entire board of directors. Our reasons for doing so were explained in great detail in a 27-page white paper filed with the Securities and Exchange Commission, ahead of our presentation of a shareholder proposal at the company’s annual meeting.
At the time the company was requesting for investors to support the return of the entire incumbent board except for Susan Arnold, who was retiring as the Chair. No refreshment of its membership was sought despite the entertainment giant’s dismal earnings and stock performance in recent years. After a brief recovery this spring, shares are nearing their five-year low again.
Disney’s executive suite and board has been tainted with extreme dysfunction for several years running, documented by multiple media reports. Before this weekend two lengthy articles were published that provided insider accounts about the battle between (previous and current) CEO Robert Iger, and his hand-picked successor, and then displace-ee, Bob Chapek. The first came in December 2022 from the Wall Street Journal, and then there was an even longer piece in September 2023 from Alex Sherman at CNBC.
And now, on Sunday, the New York Times bestowed upon its readers a “58-minute read” (here’s the link to the newspaper’s version that is behind it’s pay wall) that expands on the previous two deep dives. Careful readers will notice that most of the obvious Times article sources are either Chapek or those sympathetic to him, which isn’t surprising — the megalomaniacal Iger and his board acolytes have demolished the reputation of the short-lived CEO since his eunuch-like “reign.” The Times reported that he’s been “muzzled by a severance agreement” and since departing Disney, “few opportunities have come his way.” Obviously he’s angry.
It’s too much to extract out of the Times‘s 11,150-word epic all the evidence that proves NLPC was on-point in calling for the replacement of all Disney’s directors, but the following illustrates just a few examples of the board’s and C-suite’s deep dysfunction:
- “When Iger stepped down as CEO — abruptly, just weeks before the coronavirus pandemic plunged Disney into the worst crisis in its history — the company’s board agreed that he could stay on as “creative director” and executive chair of the board for another two years…That agreement nearly fell apart over the issue of whom, exactly, Chapek would answer to: Iger or the board. A last-minute compromise, reached without a board vote, had Chapek reporting to both. That proved a recipe for conflict…”
- “For a company that bills its theme parks as the ‘Happiest Place on Earth,’ Disney’s corporate headquarters have long been anything but — a hotbed of intrigue and power struggles. Chapek’s former chief of staff told people the company’s sixth-floor executive suite was a ‘snake pit.’”
- “With a yacht, corporate jet, power and influence, Iger and his wife, Willow Bay, a former television anchor and the current dean of the University of Southern California’s journalism school, hobnobbed with a rarefied crowd: Barack and Michelle Obama, Jeff Bezos, Steven Spielberg, David Geffen and Oprah Winfrey, to name just a few…Once in the job, Iger wondered (as did Eisner before him): If stripped of his power and multimillion-dollar compensation at Disney, would his allure diminish?”
- “[Former Chairwoman Susan] Arnold recognized that the unusual arrangement, in which Iger would be staying on as executive chair and chief creative officer, posed a potential for conflict. She urged Chapek to show him deference. ‘Give him a wide berth’ on creative matters, she advised. ‘Don’t step on his toes.’”
- “Two months earlier, when Chapek and Iger had appeared together on CNBC, Iger brushed aside a question about the potential for confusion over who was in charge. ‘Bob is going to be running the company,’ Iger said. But now it seemed to Chapek that Iger was acting as if nothing had changed — Iger was still CEO in all but name. Chapek’s wife told him he was little more than Iger’s ‘lapdog.’”
- “Iger told him that he couldn’t handle the truth, and then proceeded to say that before the board had agreed to name Chapek CEO, the directors had assured Iger that, if he didn’t think it was working out, he could fire Chapek and return as CEO anytime he wanted…Ellen Davis, a spokesperson for Chapek, confirmed that account. She said Chapek ‘was shocked and surprised when told by Mr. Iger that he believed he could have his job back if and when he wanted it.’”
- “During Iger’s tenure, the studio had greenlighted a bevy of projects with progressive social and political themes. But Chapek worried the development slate had veered too far left on social issues. Disney was being pulled into partisan political debates more frequently, a worrisome situation for a brand that was supposed to stand for everyone. Some board members agreed. Coming up through the pipeline was ‘Strange World,’ Disney’s first animated film focusing on an openly gay teenager. [Safra] Catz, a board member, was so opposed to the character that she told Chapek she’d have him fired if Disney released the film.”
The entire Times piece must be read to understand the full scale of the skulduggery, backstabbing, conniving, and arrogance on the parts of Iger, Chapek, other top executives, and the directors. Much of the behavior seemed attributable to primarily protecting the sensitive egos of the two CEOs, more than in service to Disney’s customers and shareholders.
Yet Iger’s late 2022 return, intended to be brief, was extended through 2026. You see, it’s just so hard to find a CEO replacement who can measure up to Bob’s immense talent, vision and creativity. Just ask his board stooges.
