Walt Disney last year awarded Bob Iger a $10 million deal to advise his successor, Bob Chapek, despite the fact that the two executives at the media company were barely on speaking terms.
Iger, who ran Disney for 15 years, rocked Hollywood by returning to the company this week as CEO after his handpicked heir Chapek was ousted in an internal upheaval.
Iger’s reappointment ended an 11-month stint outside of Disney during which the former executive pursued other interests but remained loosely tied to his old employer through a “consulting services”[ads1]; deal.
Under terms disclosed in Disney’s corporate filings, Iger was granted $2 million a year until the end of 2026 for advice “on such matters as his successor as CEO may request from time to time”.
Disney said the five-year consulting services agreement would enable the company “to access Mr. Iger’s unique skills, knowledge and experience with respect to the media and entertainment industry”.
But by the time of his departure, Iger’s relationship with Chapek had deteriorated, and Iger expressed frustration to friends that his advice was not sought by his successor at key moments.
A former Disney executive who is friendly with Iger said this included Disney’s unclear response to a Florida law regulating what teachers can say about LGBT+ issues.
“Iger never forgave Chapek for the way Chapek distanced himself and took control of the company,” they said. “In some ways, Iger thought he would still be a coach. Chapek was not willing.”
Disney declined to comment on the services provided by Iger after he left the company.
While seven-figure consulting deals for former executives are rare in Europe, such arrangements are used by some American companies. Disney also agreed to continue paying Iger’s security costs as a former employee, which totaled about $750,000 a year.
Disney did not say whether Iger’s $2 million required a minimum amount for consulting, but the contract includes monthly and annual “maximum time commitments” of unspecified length.
Iger’s return to Disney as CEO was on a slimmed-down pay package, which includes a $1 million base salary, a $1 million milestone bonus and stock awards valued at $25 million. This compares with an average pay package of around $47 million over the past five years as CEO.
“Essentially, he has taken a 40 percent pay cut. . . to come back,” said Tom Gosling, an executive at the London Business School who established PwC’s executive pay practice. “He must love the job, love the company or see a lot of upside in the share price. Maybe all three.”
Disney, in company filings announcing the change in leadership, said Iger’s consulting arrangements would be paused while he serves as CEO and would resume once he left the company.