In February 2015, the Walt Disney Co.’s board was hailed for an orderly succession process, free of the drama that had filled its last CEO transition.
Just over a year later, the decision on whom to hand the keys to the Magic Kingdom is a script without an obvious ending.
Disney announced a shocker last week when it said Thomas Staggs, its chief operating officer who was widely seen as the heir apparent to CEO Robert Iger, would be leaving his position May 6, but would stay on as an adviser through the fiscal year.
Reports said some board members were not convinced he was the right person for the top job.
In a statement, the company said Staggs’ “planned departure caps a distinguished 26-year career” and opened the door to outside candidates: “Disney’s board of directors will broaden the scope of its succession planning process to identify and evaluate a robust slate of candidates for consideration.”
Whatever prompted Staggs’ departure, what’s clear is that the media giant’s board faces a succession planning process that looks to be much thornier than most. Disney is a company with $52 billion in revenue from a diverse array of properties including theme parks, film studios and television networks, making it harder than usual to find the right résumé match.
The company has had only two CEOs since 1984, when it brought in Michael Eisner from Paramount Pictures to take the job.
Iger’s tenure has been widely viewed as successful. With two years left on his contract, luring an outsider could be tricky, say some executive recruiters and corporate governance experts.
“I was really surprised when I saw all this,” said Peter Crist, chairman of the executive search firm Crist Kolder Associates. “All those moving parts make this a tremendously complex process and decision.”
Another complicating factor: While Disney might have plenty of talented people on its management team, some say an obvious next-in-line for the CEO job is missing from the lineup now that Staggs is leaving. Jay Rasulo, Disney’s former chief financial officer, departed the company after Staggs was given the COO job last year, which followed a five-year bake-off that included the two executives switching roles.
“If anything unexpected happens to Bob Iger, there’s a leadership vacuum at the top of this company,” said Laura Martin, an analyst at Needham Securities who has a “hold” on the company. “There is no Plan B.”
