Disney Extends Iger Pact and Plans for Succession
New CEO to be named in 2015
By Jon Lafayette -- Broadcasting & Cable, 10/7/2011 1:22:07 PM
Iger, 60, will add the title of chairman next March following the retirement of current chairman John E. Pepper. Disney has also begun planning for Iger's replacement, establishing March 31, 2015, as the time when a new CEO will be named.
As part of the agreement, Iger's annual base salary will be $2.5 million. The salary increases by $500,000 a year. Iger is not receiving any up front equity award in connection with signing the new agreement.
Iger's annual bonus award will be calculated based on the company's performance, including its operating income, return on invested capital, earnings per share and after-tax free cash flow. The target value of the bonus is $12 million per year for 2002 though 2015 and $6 million for 2016, during which Iger is expected to be serving as executive chairman. He will also be entitled to an annual long-term equity incentive award of options and restricted stock units, the ultimate value of which will be entirely dependent on the Company's future financial performance. The target value for the incentive is $15.5 million per year for 2012 through 2015 and $6 million in 2016.
"For more than six years, Bob Iger has proven he has that ability at the highest level, The Board is delighted that the company has been able to secure the longer-term continuation of Bob's unique blend of experience and leadership skills," said Pepper in a statement. "For these reasons - continuing the strategic direction and growth of the company while ensuring a smooth transition process to the next generation of leadership - the Board has determined that Bob should assume the additional role of Chairman."
Iger was named president and CEO in 2005 and his current contract was due to expire in 2013.
"I'm privileged and grateful to lead The Walt Disney Company and our talented, dedicated team at this exciting time," Iger said. "I'm committed to increasing long-term value for shareholders and am confident we will continue to do so through the successful execution of our core strategic priorities: the creation of high quality, branded content and experiences, the use of technology, and creating growth in numerous and exciting international markets."
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