Iger Tops List of Candidates to Replace Eisner

Sep 21, 2004  •  Post A Comment

The Walt Disney Co. President and Chief Operating Officer Robert Iger is the leading contender to be considered by the Disney board as a possible replacement for outgoing CEO Michael Eisner, who retires in two years, the board said Tuesday.

In a statement released Tuesday afternoon, the board said Mr. Iger was the only internal candidate it would consider as it hires an executive search firm to help the directors identify a successor to Mr. Eisner. The board said it hopes to identify Mr. Eisner’s replacement by next June.

“[Mr. Iger] is an outstanding executive, and the board regards him as highly qualified for the position,” the board said in its statement. “However, the board believes that the process should include full consideration of external candidates as well.”

The board’s enthusiasm for Mr. Iger is likely to raise the ire of a number of shareholders who have been vocal about the company’s need for fresh blood.

Such calls became louder in the past two weeks after Mr. Eisner announced that he would not seek to renew his employment contract when it expires in September 2006.

While Mr. Iger was seen as a possible candidate, given his status as the media giant’s second-highest-ranking executive, his chances soared last week after Mr. Eisner gave his lieutenant a ringing endorsement in a recent interview. Sources said Mr. Iger has gained kudos from a number of board members in recent months following a number of meetings with restive shareholders; many have lauded his calm and polished demeanor in the face of angry investors.

The Disney board also repeated its support for Mr. Eisner and praised company executives for the improved financial performance of late.

“The Walt Disney Co.’s condition and prospects are excellent,” the board said. “It has strong and effective leadership.”

Meanwhile, the board approved a new executive compensation plan that will be in effect at the start of the 2005 fiscal year, which begins Oct. 1. Under the new plan, 70 percent of annual bonus compensation will be based on specific financial measures of the company, while the balance will be based on individual, company-wide or business unit operating performance.

Compared with the previous compensation plan, which was set in 2002, the board said that most executives will find themselves subject to additional performance criteria and payment limitations.