Disney extends Bob Chapek's contract despite controversial tenure, sagging stock price
Disney (DIS) is once again betting on Bob Chapek.
On Tuesday, the media company's board of directors unanimously voted to extend Bob Chapek’s contract as CEO for another three years through 2025.
"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 chairman of the board, said in a statement.
"In this important time of growth and transformation, the Board is committed to keeping Disney on the successful path it is on today, and Bob’s leadership is key to achieving that goal," Arnold continued, adding, "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."
The news comes after the surprise exit of top TV executive Peter Rice, adding to a list of corporate ethos-fueled controversies facing big companies including Netflix (NFLX) and Spotify (SPOT).
Rice, who served as chairman of Disney General Entertainment Content after joining the company in 2019, was reportedly dismissed by Chapek earlier this month over issues surrounding his cultural fit.
The announcement fueled further questions surrounding the controversial tenure of Chapek (whose contract was originally set to expire in early 2023.)
"Chapek just made another massive mistake," one industry executive told The Hollywood Reporter at the time of Rice's ousting.
"It’s not good for the company. Morale is terrible," added another.
Still, Disney voiced its support for the embattled CEO, saying at the time, "The strength of The Walt Disney Company’s businesses coming out of the pandemic is a testament to Bob’s leadership and vision for the company’s future."
Disney stock is down 39% so far in 2022.
Chapek's bumpy tenure
Soon after replacing longtime executive Bob Iger in 2020, Chapek reorganized its media and entertainment businesses, a controversial move that upset longtime veterans and reportedly "confused" workers.
Chapek also engaged in a public battle with "Black Widow" star Scarlett Johansson, who sued the company over "breach of contract" after it decided to release the Marvel film on Disney+ the same day it hit theaters. Johansson and Disney eventually settled.
More recently, Chapek found himself in the political crossfire of Florida Governor Ron DeSantis, who revoked the company's special tax district following Disney's unfavorable reaction to the Parental Rights in Education Act, or what critics have dubbed the "Don't Say Gay" bill.
Chapek, who initially decided not to speak publicly on the matter, opted to work behind the scenes in an attempt to soften the legislation. That didn't work.
The executive eventually reversed course following intense backlash and a string of employee-staged walkouts. Chapek publicly denounced the act during the company's annual shareholder meeting on March 9 and directly apologized to employees in a company memo.
Still, Chapek was criticized for taking a soft stance, and the apology was looked by many as too little, too late.
Lee Cockerell, former executive vice president of operations for the Walt Disney World Resort, previously told Yahoo Finance CEOs have to "stand up quick" on political issues, adding "politics is just part of life ... you can't avoid it."
"[Chapek] probably thinks this now and I do too ... he should have come out right away," Cockerell said. "You can't wait a week to decide how you're going to respond,"
Cockerell added that Disney's culture of fostering an inclusive workforce comes with an expectation to "stand up and support everyone" — further underscoring the clash between Disney's employees and Chapek's leadership style.
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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