By Dawn Chmielewski
(Reuters) -Walt Disney said on Monday it would announce a replacement for CEO Bob Iger in early 2026, marking the first time the storied media and entertainment company has formally announced a timetable for succession.
The investor community said the news signaled progress for a company that has struggled to find a successor to Iger, the affable, camera-ready executive who shaped the modern Disney through a series of acquisitions.
Disney said Morgan Stanley veteran James Gorman would become chairman of the board on Jan. 2, after stepping down from his post as executive chair of Morgan Stanley at the end of the year. He served as CEO of the Wall Street bank for 14 years and is credited with growing its wealth management business.
Gorman has been praised for deftly executing Morgan Stanley's succession plan, in which Ted Pick was chosen from among three contenders for the top job. In a rare outcome on Wall Street, the two other CEO candidates, executives Andy Saperstein and Dan Simkowitz, remain at Morgan Stanley.
One financial executive who has worked with Gorman said Disney has made a choice who will "insist on rigor and transparency" in choosing a successor for Iger.
Succession has been Disney's Achilles heel.
Activist investor Nelson Peltz criticized Disney's board, saying its mishandling of succession planning resulted in Iger's return in November 2022, after the board ousted his hand-picked successor, Bob Chapek.
"Important to see Disney making progress on this critically important initiative," said Richard Greenfield, LightShed partners' media and technology analyst. "Most interesting is that it implies that Iger is actually leaving after 2026."
Iger, who built out Disney's media empire through the high-profile acquisitions of Pixar, Marvel and the Star Wars franchise, has seen his retirement date extended five times.
Upon his return to Disney, Iger initially planned to stay for two years after coming out of retirement but agreed to extend his tenure through 2026.
"A critical priority before us is to appoint a new CEO, which we now expect to announce in early 2026," Gorman said in a statement, adding this would "allow ample time for successful transition before the conclusion of Bob Iger's contract in 2026."
Disney's stock closed down 0.68%, but rallied in after-hours trading.
Gorman will succeed Mark Parker, who is leaving the Disney board after nine years. Parker, who also serves as executive chair of struggling sports retailer Nike (NYSE:NKE), said he plans "to focus on other areas of my work." The sneaker giant has undergone its own CEO transition.
"Drawing on his vast experience, James is expertly guiding the extensive search process for a new CEO, which remains a top priority for the board," Parker said in a statement.
Disney said its board discussed succession planning at each of its regularly scheduled meetings in fiscal 2024 and continues to review both internal and external candidates.
CEO CANDIDATES
Last year, Reuters reported that four Disney executives were seen as contenders for CEO. Among them is Disney Entertainment co-Chair Dana Walden, a creative TV executive in the mold of Iger, with a string of commercial and critical successes and strong talent relationships.
Other internal candidates include Disney Experiences Chairman Josh D'Amaro, an executive with Iger-like charisma whose portfolio includes the company's most significant revenue engine, its theme parks. Another is ESPN Chairman Jimmy Pitaro, the likable executive who is guiding the sports network's digital transition.
Disney Entertainment Co-Chairman Alan Bergman, a Disney veteran who oversees the film studio that has released a pair of blockbuster films this year, is also in the running.