Disney’s wildest ride: Iger, Chapek and the making of an epic succession mess

After pushing back his retirement four times, Bob Iger finally made the leap. On Feb. 25, 2020, he announced he would step down as Disney’s CEO. His hand-picked successor, Bob Chapek, then Disney’s parks chairman, would take over the day-to-day job of running the company, effective immediately.

As part of the changing of the guard, the Disney board suggested the new CEO should take over Iger’s expansive office at Disney headquarters in Burbank, California.

There was just one problem. Iger had no interest in moving out. He wasn’t truly leaving Disney, anyway. His succession plan allowed him to stay on as executive chairman for 22 months. Chapek would report to him and the board. Iger would also “direct the company’s creative endeavors” — nebulous phrasing suggesting he would retain control of movie and TV content and operations.

There was a practical reason Iger didn’t want to move out of his office. It had a private shower, built for former CEO Michael Eisner, and a vanity for shaving. Iger, now 72, consistently woke up around 4:15 a.m. to work out and then shower at the office. On evenings when Iger was heading out for a Disney premiere, award show or benefit, he would often take a second shower in the office.

Iger told Chapek that he lived for those “two-shower days,” according to people familiar with the conversation.

Iger chose Chapek, now 64, as his successor because of Chapek’s integrity and business acumen, not his interest in Hollywood socialization. Chapek has the outward corporate demeanor of a Midwestern businessman — or, as one colleague jokingly put it, “a tuna salad sandwich who sits in front of spreadsheets.” He’s a risk-taker who’s not afraid to upend the status quo, but he’s not a schmoozer by nature. Whereas Iger holds court around his Brentwood mansion — a short stroll from celebrities, producers, super-agents and other Disney executives — Chapek lives about an hour’s drive from downtown Los Angeles, in Westlake Village. Iger enjoys yachting; Chapek is more of a power-boating and kayaking kind of guy. 

Both men agreed Chapek wouldn’t have much need for the office shower; Chapek would instead move into a smaller office on the same floor. 

On the wall of Iger’s office bathroom hung two posters. The first was a framed collage of newspaper front pages and magazine covers with images of Iger celebrating Disney’s purchase of Marvel in 2009. The $4 billion deal was arguably Iger’s shrewdest decision as CEO and one of the best media and entertainment acquisitions in U.S. corporate history.

The second picture spoofed the movie poster for the 1975 Clint Eastwood thriller “The Eiger Sanction,” but the image was of Iger instead of Eastwood, with the title “The Iger Sanction.”

“The Eiger Sanction” is about an assassin who comes out of retirement for one last job.

On Nov. 20, 2022, Bob Iger came out of retirement to become Disney’s CEO once again. The board had fired Chapek. Within days, Iger fired Chapek’s closest advisors, including his former chief of staff, Arthur Bochner; his assistant, Jackie Hart; and his de facto second-in-command, Kareem Daniel. In July, Iger extended his contract through 2026, the fifth time he has pushed back his departure as CEO.

Chapek confided to a friend that his tenure at Disney was “about three years of hell,” defined by one overriding theme: his unrelenting fear that Iger wanted his job back. 

Iger, meanwhile, has told peers and colleagues he returned to Disney to correct what he sees as one of the biggest mistakes of his career — choosing Chapek. 

“When the two people at the top of a company have a dysfunctional relationship, there’s no way that the rest of the company beneath them can be functional,” Iger wrote in his autobiography, “The Ride of a Lifetime.” “It’s like having two parents who fight all the time.”

Iger wasn’t describing his relationship with Chapek — he was recalling his observations living through the meltdown between Eisner and his No. 2, Michael Ovitz, in the 1990s. The pair got along great for years, until they became the top two people at Disney. Within 16 months, their relationship had exploded and Ovitz was fired. 

But like a son who vows never to repeat his father’s mistakes and then proceeds to do just that, Iger’s relationship with Chapek followed a strikingly similar pattern.

There’s no company in the world more associated with storytelling than Disney; its most famous movies are modern versions of timeless fables. The story of the Chapek era is timeless in its own way. It’s a tale of how good intentions clashed with hubris and ego to erode one of the most famous organizations in the world — a case study in corporate dysfunction and succession gone wrong. As Iger and the Disney board resume their search for a successor, a critical question looms: Have they learned the moral of the story?

This account is based on conversations with more than 25 people who worked closely with Iger and Chapek at Disney between 2020 and 2022. They declined to be named, as the events and conversations were private. Many of the details have never been reported. 

Through a representative, Chapek defended his record as Disney CEO in a statement to CNBC.

“Bob is proud of the work he did in the course of his 30-year career at Disney, particularly during his nearly three-year run as CEO, steering the company through the unprecedented challenges of the pandemic, and setting the course for business transformation as he and his team took the disruptive yet necessary steps for business revitalization and long-term growth,” said a Chapek spokesperson.

Iger declined to comment for this story.

Iger’s decision to step down as CEO not only shocked the entertainment and media worlds, it took even his close associates by surprise. Disney’s head of streaming, Kevin Mayer, whom many outsiders had pegged as Iger’s likely replacement, found out minutes before Iger’s public announcement. “I didn’t know that was coming at all,” Mayer told CNBC in 2021.

But Iger figured the timing was right. He was getting close to 70 and he’d been CEO for almost 15 years. The company’s recently launched streaming service, Disney+, was an instant success. And Iger was convinced Chapek was the right caretaker to continue his legacy.

Chapek grew up in Hammond, Indiana, “the son of a World War II veteran and a working mother,” as he has described it. His family took annual trips to Walt Disney World when he was young, seeding his genuine love for the company’s theme parks. He studied microbiology at Indiana University and got his MBA from Michigan State University. He joined Disney in 1993 and by 2015 had risen to become chairman of the parks division. 

For more than two decades, Chapek earned Iger’s respect as a shrewd cost-cutter and a low-drama manager. Iger especially valued Chapek for his integrity and operational expertise. At each of the divisions Chapek led at Disney — home video, consumer products and parks — profit and revenue soared under his watch. He also benefited from some good timing, running the home video division when Disney animation hits such as “The Little Mermaid,” “Aladdin” and “Beauty and the Beast” were first sold on VHS and piloting consumer products just as “Frozen” launched. 

Chapek cemented his reputation with Iger and the board during the construction of Shanghai Disney, the $5.5 billion theme park that opened in 2016 after months of delays. Iger and Chapek traveled to Shanghai, China, together more than 10 times as Chapek got the cost overruns and construction headaches under control. His success helped Iger move on from former Chief Operating Officer Tom Staggs, who was then in line to take the CEO job after Iger. Staggs left the company just before Shanghai Disney finally opened.

It was Iger’s experience with Staggs — who didn’t secure Disney’s top job after being promoted to COO specifically to be Iger’s heir apparent — that made Iger decide Chapek should start as CEO immediately. He told board members he didn’t think Chapek needed to audition for the role. 

Years later, Iger would tell others he mistook Chapek’s stellar operational track record for leadership skills.

This was a striking admission for Iger, who prides himself on his emotional intelligence. He is charming with co-workers and at ease with celebrities — a Hollywood star in his own right. These traits paid dividends over the years. He convinced Steve Jobs to sell him Pixar, cajoled Ike Perlmutter into selling him Marvel, and persuaded George Lucas to sell him “Star Wars” and its bounty of associated intellectual property. In 2017, he struck a deal with Rupert Murdoch to buy most of Fox. 

Some Disney executives have privately speculated that Iger chose Chapek because he wouldn’t rival him in either charisma or celebrity — or, more cynically, because he was unlikely to eclipse Iger’s glittering record at the company. 

What’s clear is Iger didn’t know Chapek as well as he should have. On a day-to-day basis, Iger worked far more closely with Mayer and Staggs. Iger doesn’t mention Chapek once in his 2019 autobiography outside of the prologue — even though by then Chapek was at least tentatively in line to be Iger’s preferred successor. For comparison, Iger spends more than five pages of his 236-page book discussing “Twin Peaks.”

The entire process of naming a successor was bumpy. For a start, Iger kept delaying his retirement: In 2013, 2014 and then twice in 2017, he renewed his contract after saying he intended to walk away.

In 2017, according to people familiar with the matter, Iger first told Chapek he was in the running to be his potential successor. The vetting process for CEO would begin with Chapek flying across the country to meet one-on-one with board members — not unlike contestants’ hometown dates on Disney’s hit reality show “The Bachelor.” Iger had gone through a similar process, taking 15 meetings with directors before securing the CEO position in 2005.

But Chapek never did the meetings. Iger agreed to buy the majority of Fox’s assets in a $71 billion deal and renewed his contract as a condition of the purchase, pushing back any talk of succession.

In January 2020, Iger told Chapek the plan was back on. This time, Iger told him that instead of the one-on-one board interviews, Disney’s lead independent director, Susan Arnold, would be in touch. Days later, Arnold delivered the news to Chapek over lunch at The Rotunda, Disney’s executive dining room. She and Iger had both recommended Chapek for the job, and the board had approved. Chapek sat on the secret for six weeks before the public announcement.

In choosing Chapek, Iger and the directors had passed over Mayer and Peter Rice, then head of Disney’s TV entertainment business. The board felt the leadership styles of both men were too brash, according to people familiar with some of the directors’ thinking. Also, Mayer had never run a business of scale, and Rice had joined the company from Fox less than two years earlier.

However, Iger never consulted anyone who worked directly for Chapek in the runup to naming him CEO, according to people familiar with the matter.  

He had pegged Chapek as someone who would accept his somewhat unusual succession plan, in which Chapek would serve both as CEO and CEO-in-training while Iger remained his boss and ran “creative endeavors” for 22 months as executive chairman. 

“Any of the big creative decisions that have to be made, I fully intend for Bob [Chapek] to be at my side,” Iger told CNBC’s Julia Boorstin on the day of the announcement. “What this is about, really, is, we believe, a really good succession process and a really smart transition process.”

WATCH: Bob Iger steps down as Disney CEO and announces Bob Chapek will take his place