December 9, 2022

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Disney awarded Iger a $10 million consulting deal to advise the CEO

Disney awarded Iger a $10 million consulting deal to advise the CEO

Walt Disney last year awarded Bob Iger a $10 million deal to advise his successor, Bob Chapek, even though the two media company executives were hardly on terms.

Iger, who ran Disney for 15 years, shook up Hollywood by returning to the company this week as CEO after his chosen heir was Chapek. He was overthrown in an internal revolution.

Iger’s reappointment ended an 11-month stint outside of Disney in which the former CEO pursued other interests but remained loosely associated with his old employer through a “consulting services” agreement.

Under terms disclosed in Disney filings, Iger was given $2 million annually through the end of 2026 for advice “on such matters as his successor as CEO may from time to time request.”

Disney said the five-year consulting services deal will give the company “access to Mr. Iger’s unique skills, knowledge and experience with the media and entertainment business.”

But by the time of his departure, Eiger’s relationship with Šape had deteriorated badly, and Eiger expressed his frustration to his friends that his successor had not sought his advice at crucial moments.

This involved Disney’s failed response to a Florida law regulating what teachers can say about LGBT+ issues, said a former Disney executive with Iger.

They said, “Egger never forgave Šapek for the way Šapek distanced himself and took control of the company.” “In some ways, Egger thought he would still be the coach. Tchepek was not willing.”

Disney declined to comment on the services Iger rendered after he left the company.

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While seven-figure advisory deals for former CEOs are rare in Europe, some US firms use such arrangements. Disney also agreed to continue paying Iger’s security costs as a former employee, which totaled about $750,000 a year.

Disney didn’t say if Iger’s $2 million required minimal consulting advice, but the contract includes monthly and annual “maximum time commitments” of indefinite duration.

Iger’s return to Disney as CEO was on a reduced salary package, which includes a $1 million base salary, $1 million target bonus, and $25 million in stock awards. This compares to an average salary of about $47 million over the past five years as CEO.

“He basically took a 40 per cent pay cut … he has to love the job, love the company or see a lot of upside in it,” said Tom Gosling, an executive fellow at London Business School who founded the executive wages practice at PricewaterhouseCoopers. Share price. Maybe all three.”

Disney, in corporate papers announcing the management change, said Iger’s consulting arrangements would be paused while he served as CEO and resume when he left the company.