Disney board renews Bob Chapek as CEO

For months, Hollywood has been engaged in a guessing game over Bob Chapek’s future as Disney chief executive, with critics claiming the missteps had sealed his fate with the Disney board: his reign would soon be over.

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The board of The Walt Disney Company renewed Chapek’s contract for another three years on Tuesday. That means Chapek could remain at the helm of Disney until at least 2025.

Mr. Chapek, 63, faces an overwhelming to-do list. Disney’s stock price needs to revitalize, to put it mildly. The company’s balance sheet is still recovering from the pandemic. Employee morale needs to improve. Disney has been struggling in China, with the Shanghai Disney Resort and Hong Kong Disneyland closing and reopening (and closing and reopening) due to coronavirus concerns, and Disney movies not being cleared for theatrical release by Chinese authorities.

Disney’s national theme parks have been packed, with visitors spending more than ever on food, merchandise and hotel rooms. But some investors worry that a looming recession could hit park attendance and visitor spending. Disney needs its theme parks to continue to generate buckets of cash to offset losses at its broadcast division; Disney+ has been growing rapidly, but isn’t expected to be profitable until 2024.

Nevertheless, the renewal of Mr. Chapek’s contract amounts to a huge boost.

“The pandemic dealt Disney a heavy hand, but with Bob at the helm, our businesses, from parks to streaming, not only weathered the storm, but emerged in a position of strength,” said Susan Arnold, chair of the board. , and I add. , “Bob is the right leader at the right time for The Walt Disney Company, and the board has full confidence in him and his leadership team.”

Chapek was groomed by his predecessor, Robert A. Iger, who stepped down from the role in February 2020, a month before the coronavirus pandemic forced Disney to close most of its businesses. Iger remained Disney’s CEO until December, when he left the company entirely.

Since then, Mr. Chapek has delivered results that have exceeded Wall Street’s expectations. Crucially, his team has kept Disney+ growing at a much faster rate than expected; The company’s flagship streaming service added nearly 20 million new subscribers worldwide in Disney’s last two fiscal quarters, about 60 percent more than analysts had forecast.

But three factors have caused Disney’s share price to drop nearly 40 percent since Iger left.

In March, Disney was caught in a political firestorm over its failed response to a new education law in Florida, where the company has about 80,000 employees. The law, among many things, prohibits classroom discussion of sexual orientation and gender identity until third grade, with limits on what teachers can say in front of older students. LGBTQ organizations and a stream of businesses criticized the bill, with opponents calling it “Don’t Say Gay.”

At first, Chapek tried not to take sides, at least not publicly, leading to an employee revolt. He then vigorously denounced the bill. Right-wing media figures and Republican Florida Governor Ron DeSantis began criticizing “Woke Disney.” In April, Mr. DeSantis revoked Disney World’s designation as a special taxing district, a privilege that had allowed the company to self-govern the 25,000-acre mega-resort since 1967.

An independent survey of more than 33,000 Americans conducted during the height of the debacle found that Disney’s brand was tarnished. On April 29, Mr. Chapek fired Disney’s top government relations and communications executive, who had joined the company just four months earlier.

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