Walt Disney gave Bob Iger a $10mn deal last year to advise his successor, Bob Chapek, although the two media company executives have rarely been on speaking terms.
Iger, who ran Disney for 15 years, shocked Hollywood this week when he returned to the company as chief executive after his handpicked successor, Chepek, was ousted in an internal revolt.
Iger’s reappointment ended an 11-month stint outside of Disney where the former executive pursued other interests but remained loosely connected to his old employer through a “consulting services” contract.
Under terms disclosed in Disney’s corporate filing, Iger was paid $2mn a year until the end of 2026 for advice “on such matters as his successor chief executive officer may request from time to time”.
Disney said the five-year consulting services deal will enable the company to “leverage Mr. Iger’s unique expertise, knowledge and experience with respect to the media and entertainment business”.
But by the time of his departure, Iger’s relationship with Chepek had deteriorated badly, and Iger expressed frustration to friends that he had not been consulted by his successor at key moments.
A former Disney executive friendly with Iger said this included Disney’s vague response to a Florida law regulating what teachers can say about LGBT+ issues.
“Iger never forgave Chepek for the way he removed himself and took control of the company,” they said. “In some ways, Iger thought he would still be a coach. Chapek was not pleased.
Disney declined to comment on the services provided by Iger after leaving the company.
While seven-figure consulting deals for former executives are rare in Europe, such arrangements are used by some US companies. Disney also agreed to continue paying Iger’s security costs as a former employee, which were about $750,000 per year.
Disney did not say whether Iger’s $2mn minimum required consultancy advice, but the agreement includes monthly and annual “maximum time commitments” of unspecified length.
Iger’s return to Disney as chief executive was on a slimmed-down pay package, including a $1mn base salary, a $1mn target bonus and $25mn worth of stock awards. This compares with an average pay package of around $47mn during his last five years as chief executive.
“Essentially he has taken a 40 percent pay cut . . . to come back,” said Tom Gosling, an executive fellow at the London Business School who founded PwC’s executive pay practice. “He has to love the job, love the company or the share price.” A lot of upside should be seen. Maybe all three.”
Disney, in a corporate filing announcing the management change, said Iger’s consulting arrangements would be paused while he served as chief executive and would resume when he left the company.