IIn a decision that shocked many on Wall Street and beyond, Disney ousted its chief executive Bob Chapek over the weekend after less than three years of work, bringing his predecessor Bob Iger back as head of the legendary company.
TIME spoke to Disney shareholder Abigail Disney, the granddaughter of Roy Disney, who founded the entertainment giant with her brother Walt, about the company’s latest developments. The film producer and activist released the documentary The American Dream and Other Fairy Tales earlier this year, which examines the growing disparity in pay among Disney parks workers and its senior executives, particularly that of Bob Iger.
This interview has been condensed and edited for clarity.
You were quite critical of Bob Iger in your film American dream and other fairy tales. How did you feel when you heard he was coming back?
Bob Iger chose to step down minutes before the pandemic became what it was in this country. It was already what it was in China. He knew very well what awaited us, and I don’t think he wanted to be at the helm when it happened. I think that’s the only thing that explains the rushed nature of his transition, because even though he had been there for 15 years and there had been talk of succession planning, all of his previous succession plans had gone smoke. I think Bob Chapek was the one standing there when Iger wanted to leave. It is really important to see his return as a sign that there has been a very unhealthy succession process. There was irresponsibility during [former CEO Michael] Eisner’s tenure and now irresponsibility during Iger’s tenure. The weakness of this plan was very clear during the fall with Bob Chapek. He made a lot of rookie mistakes early on and then he made a whole bunch of rookie mistakes throughout his tenure. I don’t think he ever left rookie error territory. Ultimately, this was very poor succession planning and the onus for that must be on Bob Iger’s shoulders as well as the shoulders of the board.
You don’t think Iger always planned to leave when he did?
I think he always wanted to leave at some point, but the proximal motivation was how COVID was looking to take the United States down. It would be foolish to think otherwise: he left at the end of January. He had already shut down a whole host of things in China and he knew what was in store for us. He’s not a sloppy man and it was a haphazard start. I hope this will trigger some thinking at the board level because ultimately it is the job of the board to hire and fire CEOs. I hope to see something better happen next time. I hope Bob [Iger] has one foot outside. The brand is currently taking a terrible beating for many reasons, all of which have the same root cause, which is that Wall Street’s ideology of shareholder value has infected every aspect of corporate management. It triggers bad behavior on the part of managers towards employees, it triggers bad behavior on the part of parks around their customers, it triggers bad behavior on the part of the chain in the way it treated Scarlett Johansson. They need to really understand their values, what this business is all about, and think very carefully about how to move forward without hurting their brand.
Your film dealt with the discrepancy between the salary of the CEO and the salary of the park employees. Iger’s new salary would be $1 million a year, an additional $1 million for performance, then $23 million in stock incentives. I was wondering if you had any thoughts on this?
It’s like this self-reinforcing circle. If you set up a person’s rewards based on their performance, it makes a lot of sense when you first think about it. But if the only way you measure performance is through share price, then the only way it will work is around share price. So it’s just this logic of self-confirmation. I can’t imagine anyone competent stepping in to run a company for, say, $10 million a year or something more rational. And I can’t imagine any CEO, in good faith, would object to having a more complex measure of success than just something as blunt and silly as stock price. The stock price has lost over 40% of its value in the past two years, which is pretty cataclysmic for people who depend on pension funds and things like that to live their lives. I hate that. But this is not a sufficient way to know whether the company is doing well or not. The CEO salary should increase as a company succeeds in its long-term investment in human life and business, which means investing in employees and caring more about your customers rather than treating them like lemons to squeeze.
The straw that broke the camel’s back with Chapek seemed to be the big losses on Disney+ as well as his cavalier attitude towards those losses. Would not pay employees [more] also cost the company much more?
Compared to losses on streaming, what it would cost to pay employees enough to only need one job is nothing, it’s a drop in the ocean. I don’t think Wall Street works particularly rationally. When the streaming services went live, it was the start of the pandemic; everyone wanted streaming services. It was a hot moment and so the stock price jumped irrationally. Stock prices were already high because there was this long super low-cost debt honeymoon that all companies were celebrating like crazy with. But also, Bob Chapek inherited a business plan for streaming that lost Disney money for a long time. There isn’t a streaming service you can name that hasn’t lost a ton of money in the process of building its path to profitability. He inherited a business plan that [people] the thought was sound. Ssuddenly he’s being punished for something that was always the plan.
Would Disney’s setbacks lead you to divest one day?
Maybe, but it wouldn’t be because I thought the streaming service wasn’t working well. It would be more of a moral decision on my part if the company totally abandoned the idea that people should be paid fairly and customers should not be abused. Although I think it’s dangerously close to that point, I think the best part of bravery is to stay and fight.
Who do you blame most for the current turmoil?
This reflects badly on the board for the way they handled it and the fact that they never thought about the succession, really, seriously. It reflects badly on Chapek because he performed really badly, and it reflects badly on Bob [Iger] because, really honestly, it’s a claim that he failed with succession planning.
Do you sense an opportunity here for Iger to correct the mistakes he made the first time around?
This is an opportunity to press reset for everyone. I really hope he thought about the big questions, not just whether or not he did a good job planning his estate. Disney is in a really bad time in terms of branding. What she really needs is an injection of that ineffable thing that has made the brand so special. And I really hope that he thinks very seriously about what needs to be awakened in the company to really make it live in the long term.
Concretely, what would that look like?
It’s really hard to put that into concrete terms because the change that has to happen in the company has to be inside its soul. You make strategic decisions based on higher principles, hopefully, and the higher principles are kind of gone and they’re all strategic decisions now. It’s a great way to get lost. You become reactive and just deal with the crisis in front of you. Bob Iger said some really good things about what he would have done differently around [Florida Governor Ron] DeSantis and the “don’t say gay” [legislation] and one of the things he said is that he has a certain set of filters that he uses to determine whether or not it’s appropriate for him to step in: how does that affect our employees? How does this affect the business? How does this affect our customers? And in his opinion, this bill was a terrible threat to the three and that therefore he would have initially handled things differently from Chapek.
I think it’s a really good filter to analyze everything right now: is everyone thriving? Are customers and employees thriving? I think those are the questions and then the answers will present themselves. I know that sounds very flippant and it’s a lot easier said than done. But I think there’s a real lack of things to pass through our deepest moral filters.
Do you wish Iger good luck?
Yes, absolutely. I always insist that he’s a nice man, and I think he means well, and I think he’s coming back to the company because he’s troubled by the state she’s in. finds right now and wants to see it improve. So I think he’s coming back with good intentions and I’m giving him the benefit of the doubt.
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