The Walt Disney Co. said yesterday its president, Robert Iger, will succeed Michael Eisner as chief executive and that Eisner will leave...
LOS ANGELES — The Walt Disney Co. said yesterday its president, Robert Iger, will succeed Michael Eisner as chief executive and that Eisner will leave his post one year earlier than previously announced.
The company said Iger, 54, was unanimously elected by the board Saturday and will take charge Oct. 1, the start of Disney’s 2006 fiscal year. Eisner will step down the day before but remain a board member for another year. He will be paid through Sept. 30, 2006, when his contract expires.
Eisner will end his tenure at the media and theme-park company after serving 21 years. Iger will become only the sixth leader of Disney in its history.
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The announcement came under fire from two prominent shareholders who questioned the integrity of the process, noting Iger’s insider status and close ties to Eisner.
Disney Chairman George Mitchell said the choice of Iger came after a “lengthy, thorough and professional selection process” that included serious study of outside candidates. He declined to be more specific.
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“We believe Bob Iger represents the right blend of continuity, of very successful performance and a recognition of needed change” in the areas of new technology and growth in Asia, Mitchell said during a call with reporters.
“This is not a huge surprise,” said Paul Kim, an analyst for New York-based Traditional Asiel Securities. He said Disney has done a good job of cutting costs and increasing profits over the past 18 months, and Iger’s challenge will be to continue that momentum.
Mitchell strongly denied charges made by former board members Roy Disney and Stanley Gold that Eisner inappropriately participated in candidate interviews. The two also alleged some external candidates declined to be interviewed because of Eisner’s role.
“The need for the Walt Disney Co. to have a clean break from the prior regime and to change the leadership culture has been glaringly obvious to everyone except this board,” the two men said in a statement.
Mitchell said Eisner was never present during any interviews with Iger and attended only part of one meeting with a candidate. “That was the full extent of his interaction with any candidates, internal or external,” Mitchell said.
Mitchell also said drastic changes in the company are not needed.
“If you are a major investor and the company has produced a 60 percent increase in earnings, has just increased its dividend 14 percent, has record cash flow and a substantial increase in return of invested capital, you don’t encourage major change,” Mitchell said.
Iger, who serves as chief operating officer, was considered a front-runner from the start.
He was president of Capital Cities/ABC when Disney bought the company in 1995, and went on to become president of the ABC Group and head of Walt Disney International. He was named president in 2000.
He is no clone of Eisner. Where Eisner is a micromanager, Iger is regarded as team-oriented. If Eisner favors funny Disney ties and drives a yellow Volkswagen Beetle, Iger is a fashion plate who favors a sleek Porsche.
Smooth and cautious, he has kept a relatively low profile at the company, although he has been more vocal about his vision for Disney since September, when Eisner announced plans to depart.
He won credit for loyally defending Eisner during last year’s struggle with former directors Roy Disney and Stanley Gold.
Iger is credited with reversing the fortunes of Disney’s ABC television, which expects a profit this year and is improving in the ratings thanks to hits such as “Desperate Housewives.”
He also played a behind-the-scenes role in smoothing out the contentious relationship between Eisner and Miramax Films Co-chairman Harvey Weinstein. Yesterday, Weinstein praised Iger’s selection, although Disney and the Weinsteins are still expected to sever ties later this month.
In a letter to the board yesterday, Eisner praised the decision and said he will not ask to be nominated for another term on the board when his current term expires next year. Eisner also said he will not seek the board chairmanship next year.
Information from USA Today was included in this report.