On Sunday, November 20, the Walt Disney Company
Chapek has faced criticism for his decisions nearly since the day he took over in February 2020, and when Disney suffered a major blow in November, Chapek's reaction was the final straw.
In its quarterly earnings report, the media company revealed that its streaming platform had sustained massive losses, its theme parks were bringing in lower profits than expected, and its cable television branch was up against significant challenges.
Disney rarely misses its expectations, so the report was an especially significant blow for the company. In fact, the day after the report was released, Disney saw its largest stock drop since the September 11 terrorist attacks.
Despite the company's dire situation, Chapek was upbeat and optimistic during a conference call with investors and analysts, attempting to spin the dismal report as a positive.
Soon after the disastrous call, media figures like CNBC's Jim Cramer began calling on Disney to get rid of Chapek, and inside sources say that several Disney executives subtly threatened to resign from the company unless Chapek was fired.
Investors and Disney executives both seem to be happy that Iger is coming back. The company gained $12 billion in value on Sunday night and saw a 10% jump in its share price on Monday morning. Internal communication reported by The New York Times shows executives cheering Iger's return.
However, there are some analysts who think this transition isn't what it appears. Cowen analyst Doug Creutz said that the shakeup "gives at least some appearance that Iger, and not the board, ultimately calls the shots at the company, and that Iger's willingness to fully surrender power to a successor is low."
"We do not necessarily believe that a lack of leadership is Disney's problem, and think the change will ultimately make a true transition of power to Iger's (next) successor even more difficult," Cruetz wrote in a note to clients.
Iger agreed to stay on as CEO until at least 2025, but choosing him as CEO is really only a stopgap measure. Disney will still need to find a replacement.
In the meantime, Iger immediately started reversing some of the changes made by Chapek, including returning power that had been shifted from Disney's television and movie executives to a new division created by Chapek. That new division was also one of the primary causes of Disney's damaging earnings report.
Iger delayed his retirement three times during his 15 years running Disney, only leaving entirely at the end of last year. Iger was replaced by his personally selected successor, Bob Chapek, but he stayed on as an executive chairman until December 2021.
According to sources for The New York Times, Iger was quickly "devastated" by changes Chapek was making at Disney, and sources inside the company say that he frequently complained about the new CEO's lack of emotional intelligence. When Chapek heard about Iger's comments, he stopped consulting with the former Disney leader on decisions, further damaging the relationship.
According to The New York Times, more than a dozen sources who provided details on the leadership change did so only on the condition of anonymity due to "the shocking and sensitive nature of the leadership change".
