Disney’s new CEO Josh D’Amaro stands to make $45 million however he’ll additionally get one thing priceless—a ‘clear break’ with Bob Iger | Fortune – Company Technique & Outlook

In keeping with Disney’s announcement, two-time CEO Iger will step down from the board’s highly effective government committee after the annual shareholder assembly subsequent month on March 18, and he’ll depart fully on the finish of the 12 months. After the chief-executive baton is handed to D’Amaro subsequent month, Iger’s employment will transition into an advisory position. Within the interim, the four-decade veteran chief will report “solely” to the board the place he’ll stay as a member and stand for re-election earlier than buyers on the shareholder assembly in March.

That’s an enormous change from the final time Iger left the nook workplace. Compared, when Disney appointed former CEO Bob Chapek in February 2020, Iger maintained a day-to-day full-time position as government chairman and retained management of directing the corporate’s inventive endeavors. Disney named Susan Arnold as chairman in 2021, however wound up bringing again Iger in November 2022 for his second stint as CEO after the corporate floundered.

This time round, D’Amaro will function CEO with ex-Morgan Stanley chief James Gorman as chairman of the board. Gorman, a Wall Avenue veteran with a deft contact for CEO transitions, was named Disney’s chairman in 2025, after having led its succession planning committee since 2024 and setting the stage for the official transition this week. 

This construction, with D’Amaro as CEO, Gorman as chairman, and Iger being gracefully ushered to the exit, is the kind of construction that sometimes permits for a clean transition and a “clear break,” mentioned board advisor and lawyer Richard Leblanc. That’s sometimes what boards attempt for in an orderly succession, he mentioned. 

“There’s all the time strain on the brand new CEO when the previous CEO is there to not make any sudden strikes, and to hold on the CEO’s legacy,” mentioned Leblanc. In distinction, when the previous CEO strikes on, “They exit the corporate in order that the brand new CEO can discover their means and implement change with out feeling as if somebody is trying over their shoulder.”

As for compensation, D’Amaro’s bundle features a base wage of $2.5 million, a goal annual bonus quantity of 250% at $6.25 million, and an annual long-term award of $26.25 million, based on a submitting with the Securities & Trade Fee. He’ll additionally get a one-time bonus of $9.7 million for his promotion from Disney Experiences Chairman to CEO of the enterprise. The entire grant date worth of his bundle, together with the one-time award and assuming full payouts, is about $44.7 million, though the lion’s share of his pay will depend on hitting sure monetary benchmarks and can solely pay out over the course of a number of years. Final 12 months, Iger’s complete compensation was valued at about $45.8 million. 

Disney’s complete succession course of is rather more formal this time round, mentioned Arpita Agnihotri, a technique knowledgeable and affiliate professor at Penn State who authored a case research on CEO planning at Disney. With Gorman helming the succession committee, Iger mentored 4 inner candidates for the CEO position, and educated them equally effectively, and the board reached a consensus on one of the best candidate for the job, she mentioned. 

“There’s readability about who might be operating this firm,” famous Agnihotri.

There’s all the time a lingering “invisible hand” of the previous CEO anytime there’s a serious transition with a widely known government, mentioned Agnihotri. And within the brief time period, D’Amaro is actually more likely to take Iger’s recommendation and counsel and take into account it invaluable. However as soon as Iger is gone, D’Amaro will have the ability to fully run the present, and he’ll have the chance to persuade shareholders he’s the suitable selection, a lot as he satisfied the board, she defined. As soon as that occurs, the invisible hand will withdraw, Agnihotri added, however buyers and market observers might be watching Disney very carefully to make sure there received’t be a repeat of the final time the board tried to exchange Iger.

“Everybody has burned their fingers,” mentioned Agnihotri. “Shareholders, the board, and different stakeholders are going to maintain a detailed eye.”

A key position for Dana Walden

She famous that the appointment of Dana Walden as president and chief inventive officer can be a key observe within the CEO transitional chord. Whereas D’Amaro has credibility as a monetary knowledgeable and deep experience in resorts and parks, Walden has the inventive chops to counter any potential criticism that the board has erred by appointing a finance-minded CEO to steer a inventive firm. 

“For my part, she goes to be the suitable hand to the brand new CEO,” mentioned Agnihotri. Buyers will need assurances that creativity doesn’t lag as the corporate seeks to spice up the Disney+ streaming service as a serious income multiplier for Disney—and to compete with Netflix.

In keeping with Walden’s supply letter, her pay contains $3.75 million in yearly wage, a goal bonus of $7.5 million, an annual long-term incentive award of $15.75 million, plus a one-time award tied to her promotion valued at $5.26 million. The grant date worth of her complete pay bundle, together with the one-time award, is roughly $32.26 million, though her awards vest over a number of years and can solely pay out if she hits key efficiency hurdles.

It’s not a shock that Disney went from a duality with an government chair plus a CEO to a unitary command construction with a CEO plus an unbiased board chair, mentioned Leblanc. Disney’s board desires to get this finished proper, he mentioned. Stipulating that he was talking typically and under no circumstances referring to Iger, Leblanc famous that when an outgoing CEO hangs out as government chair, “It’s arduous for the brand new CEO to make their imprimatur on the corporate.”