The board of Walt Disney voted unanimously to extend Bob Chapek’s contract as chief executive for three years, calling him the “right leader at the right time” for the company.
The board’s decision ended months of speculation about whether Chapek’s contract would be renewed. He has faced tough criticism this year from Disney’s LGBTQ employees and Republican politicians over his handling of a Florida law that critics have dubbed “Don’t Say Gay”.
In a statement, the board praised Chapek’s performance since he took over from Bob Iger in 2020. Chapek, 61, has steered Disney through the worst of the coronavirus pandemic, which forced the closure of movie theatres and the company’s theme parks. The Disney Plus streaming service has also grown rapidly during his tenure.
“Disney was dealt a tough hand by the pandemic, yet with Bob at the helm, our businesses — from parks to streaming — not only weathered the storm but emerged in a position of strength,” Susan Arnold, Disney’s chair, said in a statement.
The board’s renewal of Chapek’s contract came just weeks after it issued a rare statement of support for the chief after he fired Peter Rice, the company’s top television executive. Some in Hollywood saw Rice’s dismissal as an effort to eliminate a contender for Chapek’s job. The three-year contract begins on July 1 and lasts until 2025.
Chapek faces the task of restoring employee morale, which has been hit by the negative publicity from the Florida controversy, and internal strife over a strategic decision to debut some movies on streaming platforms instead of in cinemas. The company’s stock price has also underperformed the broader market, with Disney shares down more than 38 per cent this year.
Disney faces longer-term questions about how to manage its legacy business, such as the ABC linear television network and the ESPN cable network, which still generate cash but are declining.
However, some Wall Street analysts were optimistic about the strong increase in attendance at Disney’s theme parks, while it has a strong list of films for the rest of the year, including Black Panther: Wakanda Forever and Avatar: The Way of Water. This year, Disney Plus has added millions of subscribers even as industry pioneer Netflix has started to lose customers.
Chapek, who has run Disney’s theme park and consumer products units during his nearly 30 years at the company, said in a statement that leading the entertainment group was “the honour of a lifetime”, adding: “I am grateful to the board for their support.”