The Walt
Disney Co. said it agreed to extend CEO's Bob Iger's contract through June 2016
as part of a succession planning process.
Iger, 60,
will add the title of chairman next March following the retirement of current
chairman John E. Pepper. Disney has also begun planning for Iger's replacement,
establishing March 31, 2015, as the time when a new CEO will be named.
As part of the
agreement, Iger's annual base salary will be $2.5 million. The salary
increases by $500,000 a year. Iger is not receiving any up front equity award
in connection with signing the new agreement.
Iger's annual
bonus award will be calculated based on the company's performance, including
its operating income, return on invested capital, earnings per share and
after-tax free cash flow. The target value of the bonus is $12 million
per year for 2002 though 2015 and $6 million for 2016, during which Iger is
expected to be serving as executive chairman. He will also be entitled to an
annual long-term equity incentive award of options and restricted stock units,
the ultimate value of which will be entirely dependent on the Company's future
financial performance. The target value for the incentive is $15.5 million per
year for 2012 through 2015 and $6 million in 2016.
"For more than
six years, Bob Iger has proven he has that ability at the highest level, The
Board is delighted that the company has been able to secure the longer-term
continuation of Bob's unique blend of experience and leadership skills," said
Pepper in a statement. "For these reasons - continuing the strategic direction
and growth of the company while ensuring a smooth transition process to the
next generation of leadership - the Board has determined that Bob should assume
the additional role of Chairman."
Iger was named
president and CEO in 2005 and his current contract was due to expire in 2013.
"I'm privileged
and grateful to lead The Walt Disney Company and our talented, dedicated team
at this exciting time," Iger said. "I'm committed to increasing long-term value
for shareholders and am confident we will continue to do so through the
successful execution of our core strategic priorities: the creation of high
quality, branded content and experiences, the use of technology, and creating
growth in numerous and exciting international markets."
