Disney fired its CEO Bob Chapek after receiving several internal complaints from senior staffers that the exec was running the company into the ground, people familiar with the matter have revealed.
Among those to air such concerns was Disney’s Chief Financial Officer Christine McCarty, who the insiders said was among many to find Chapek, 62, unfit for the role, CNBC reported.
The company’s board of directors acted almost immediately after receiving the complaints, reaching out to his predecessor and former mentor Bob Iger, 71, Friday to come out of retirement and replace a man he less than a year ago touted as his successor.
The shakeup reportedly left Chapek ‘blindsided,’ the sources said, bringing his 11-month tenure as head exec to a premature close after a series of errors and woke controversies cratered the firm’s share price.
Brass from the company announced the change in a statement Sunday night, but did not provide a specific reason for Chapek’s dismissal.
The revelation regarding senior leadership’s dissatisfaction with the short-lived CEO coincides with previous reports of staffers alleging Chapek had mishandled the company since assuming the position in February.
Since then, Disney share prices have fallen drastically, by roughly 40 percent so far this year – losses further compounded by a more than $10billion deficit incurred during the pandemic. Disney shares rocketed by six per cent by the closing bell Monday, as investor hopes grew that the return of Iger would signal a more stable period for the scandalized corporation.
The company’s poor performance under Chapek has been blamed on factors ranging from an unsuccessful pivot to the streaming sphere with Disney+, and his hesitance to speak out against a Florida bill that banned LGBTQ discussions for students younger than 10.
That, coupled with the disappointing financial results as well rising ticket prices for its theme parks, saw Disney decide to pull the plug on their new head exec, who was initially tapped to take over the position permanently.
Disney fired its CEO Bob Chapek after receiving several internal complaints from senior staffers that the exec was running the company into the ground, people familiar with the matter have revealed
Among those to air such concerns was Disney’s Chief Financial Officer Christine McCarty, who the insiders said was among many to find Chapek unfit for the role
The shakeup comes as an abrupt return to power for Iger, who, prior to stepping down had served as Disney’s head exec for more than 15 years.
Now back in the hot seat as staffers look to rescue their bottom lines, Iger has agreed to serve as CEO through the end of 2024. Chapek, meanwhile, has been removed from the company completely, after implementing a host of changes to its power structure – reportedly causing a rift between the two, while also angering other senior staffers who held influence over the board, such as McCarthy.
One such problematic power struggle that surfaced under Chapek came almost immediately, with his decision to nix the responsibilities of many of Iger’s veteran division leaders and instead consolidate them under his right-hand man, Kareem Daniel.
Daniel, 46, served as the head of the company’s latest faction, its Media and Entertainment Distribution group, implemented to aid in its shilling of streaming platforms Disney+, Hulu, and ESPN+. Daniel’s status with the company is currently up in the air, and dependent on the direction Iger wants to take at the company, two of the insiders said.
The moves by Chapek, sources said, was meant to streamline the company so he, through Daniel, can make decisions across all of the platforms – but instead backfired by angering heads previously responsible for those decisions.
The company’s board of directors would act almost immediately after receiving the complaints, reaching out to his predecessor and former mentor Bob Iger Friday to come out of retirement and replace Chapek, once his friend and protégé
In addition to McCarthy, the decision reportedly angered the company’s then-head of strategy Kevin Mayer, who left Disney in 2020 to become TikTok’s CEO, months after Iger chose Chapek as his replacement.
The decisions, as well as Chapek’s nixing of free perks and raising of prices at Disney resorts, reportedly also angered a slew of other Iger-era staffers – including Iger himself.
Visitor numbers at the park have plunged by 17 per cent – but the profit Disney makes on each guest has increased by 17 per cent in a year, leading many to accuse the parks of ripping off loyal customers in order to bolster their bottom line.
In regards to Daniel, insiders said that Iger never agreed with giving Chapek’s right-hand so much control, with the former CEO feeling that stripping division heads of the ability to greenlight what shows are on their respective services wasn’t the right move due to the complex and diverse differences between each platform.
Chapek, however, disagreed, envisioning a unifying digital experience for its customers – a campaign employees at the time dubbed ‘One Disney.’ The effort has since failed to impress the firm’s senior leadership, many of whom badmouthed their new boss to the board.
Iger, meanwhile has worked for Disney for more than four decades, with 15 of those years coming in the company’s hot seat – which is now hotter than ever.
Having handed Chapek the keys to his kingdom after a slew of false starts that saw him continue to steer the company for more than two years than planned – reportedly to the frustration of a waiting Chapek – Iger seemed tentative to pass the seat onto his former protégé.
At the time, Iger – who caused ructions on his way out by forcefully speaking out against Ron DeSantis’ so-called Don’t Say Gay bill, asserted his retirement was permanent and that he would not return to the role.
But now, Iger is set to again take the reins – while it is rumored that he has since fallen out with his failed successor.
Under Chapek, Disney also faced a backlash over a lesbian kiss in kids’ movie Lightyear and a transgender man buying tampons in TV series Baymax. Those productions were likely signed off during Iger’s tenure.
Iger is now the CEO of Disney – after he quit the role in February 2020 – replacing his underperforming protégé amid plummeting share prices
Susan Arnold, Chairman of the Board, formally announced the CEO switch in a statement Sunday night in which she thanked Chapek for his 11 months of service.
‘We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,’ the statement read.
Iger also shared a statement of his own about his excitement at returning – but made absolutely no mention of Chapek, fueling rumors of a bitter rift between the former friends.
However, instead of rescuing the company’s flailing bottom lines, Chapek’s not-so-glittering tenure as CEO saw the company’s profits fall even further over the past year – when many experts posited it would recover.
Since losing more than $10billion during the pandemic, shares of the company have fallen about 41 percent so far this year, as of Friday’s close.
The stock hit a 52-week low on November 9, less than two weeks before the company’s shock announcement, where brass asserted that Iger ‘is uniquely situated to lead the company through this pivotal period.’
The company’s poor performance under Chapek has been blamed on factors ranging from an unsuccessful pivot to the streaming sphere with Disney+, and his hesitance to speak out against a Florida bill that banned LGBTQ discussions for students younger than 10
The press release cited that Iger already ‘has the deep respect of Disney’s senior leadership team.’
Also influencing the company’s decision, according to the statement, was Iger’s illustrious career at the entertainment giant that saw him build it into ‘one of the world’s most successful and admired media and entertainment companies’.
It further cited the re-crowned CEO’s ‘strategic vision focused on creative excellence, technological innovation and international growth.’
It added that Iger ‘is greatly admired by Disney employees worldwide – all of which will allow for a seamless transition of leadership.’
In an email Sunday evening, Iger confirmed his return to staffers – in a pointed correspondence that saw him make no mention of his nixed successor.
In an email Sunday evening, Iger confirmed his return to staffers – in a pointed correspondence that saw him make no mention of his nixed successor
‘Dear Fellow Employees and Cast Members, It is with an incredible sense of gratitude and humility-and, I must admit, a bit of amazement-that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer,’ the email, obtained by The Ankler, read.
‘When I look at the creative success of our teams across our Studios, Disney General Entertainment, ESPN and International, the rapid growth of our streaming services, the phenomenal reimagining and rebound of our Parks, the continued great work of ABC News, and so many other achievements across our businesses, I am in awe of your accomplishments and I am excited to embark with you on many new endeavors.
‘I know this company has asked so much of you during the past three years, and these times certainly remain quite challenging, but as you have heard me say before, I am an optimist,’ wrote the CEO, who sparked controversy in 2019 when it was revealed he earned $66million a year – about 1,000 times the salary of a typical Disney employee.
‘If I learned one thing from my years at Disney,’ he continued, it is that even in the face of uncertainty-perhaps especially in the face of uncertainty-our employees and Cast Members achieve the impossible.’
The notice added that staffers would be hearing more about the shifting arrangement and what it entails in the coming weeks.
‘In the meantime,’ Iger wrote, ‘allow me to express my deep gratitude for all that you do.’
Shares of Disney have fallen about 41% so far this year, as of Friday’s close. The stock hit a 52-week low November 9
No additional details about the shift were provided by Iger or the company, which has battled a slew of controversies over the past year amid its changing power structure under Chapek – who championed ‘inclusion’ as his foremost focus as CEO.
Chapek’s ‘inclusion’ campaign – which was widely criticized as a means of pandering to the company’s increasingly outspoken progressive customer base – would see the company nix phrases ‘ladies and gentleman, boys and girls’ during shows at Disney World’s iconic Magic Kingdom.
Other rides such as the Jungle Cruise, a staple of Disney’s theme parks for nearly 70 years, got an overhaul to address years of complaints that it offered a racist view of indigenous people as uncivilized ‘savages’ – decisions reportedly made without Iger’s input.
Chapek landed in hot water last spring when he took no public stance on Ron DeSantis’ Don’t Say Gay bill, which barred schools from discussing sexuality or gender with children between kindergarten and third grade
Chapek was criticized for not condemning the bill, and tried to quell the backlash with a backtracking statement to staff. (Pictured: Disney employees in California rallying against the bill on March 22)
The company’s ‘Lightyear’ spinoff also drew backlash after it showed a same-sex kiss between two characters – a scene insiders said Chapek initially took out, but reinstated following complaints from offended staff.
Insiders at the time described a rift forming between Iger and Chapek, with the former mentor reportedly growing increasingly frustrated with his protégé’s decisions made without his or others’ input.
Calls Chapek made without the chairman’s blessing, according to the outlet, included a dramatic reorganization of the company in October that saw 28,000 theme park staffers laid off to deal with accruing costs spurred by pandemic-related closures, and a shift in focus to the company’s streaming service, Disney+.
They also included the revelation of actress Scarlett Johansson’s $35 million salary for starring in Marvel movie Black Widow.
The huge payday was leaked after Johansson sued over the movie’s release on Disney+, rather than at movie theaters, alleging she was being stiffed and underpaid when compared to her male counterparts.
The conflict reportedly embarrassed Iger, sources told NBC, who remarked that while no longer CEO, the company chairman still prided himself on the company’s relationships with A-list talent.
Most importantly, however, Chapek was criticized for not condemning DeSantis’ Parental Rights in Education Act, dubbed by detractors as the ‘Don’t Say Gay’ bill. He moved to try and quell the backlash, which eventually gave way to a backtracking statement from Disney to staff declaring its opposition to the bill.
In the memo, Chapek said: ‘I want to be crystal clear: I and the entire leadership team unequivocally stand in support of our LGBTQ+ employees, their families, and their communities.
Iger (at right with Chapek in September), whose reign was largely unmarred by such disputes, notably took a public stance against the bill, leading to a rift between him and his handpicked successor
‘We are committed to creating a more inclusive company – and world.’
Weeks prior, Iger, whose reign was largely unmarred by such disputes, notably took a public stance against the legislation.
Several longtime Disney staffers said Chapek’s handling of the situation led to ‘the worst week they’ve ever had working at the company,’ Deadline reported at the time.
According to the outlet, sources close to the company at the time said that employees were calling Iger to air complaints and their dissatisfaction with Chapek.
Chapek, meanwhile, remained adamant that the company could better advocate for inclusivity through its increasingly woke content – and by working with legislators behind the scenes, an internal memo sent to staffers during those struggles revealed.
The memo’s revelations, however, were met with outrage by senior staff, who called Chapek’s decision weak and disappointing. Chapek later was forced to apologize in March. He publicly decried the bill and announced Disney had paused all its political donations within Florida, where Disney World has operated for more than a half century.
Chapek explained that he wanted Disney to be a brand that could ‘rise above’ the political fray, and serve as a beacon of optimism and harmony in the world.
‘What we try to do is be everything to everybody,’ Chapek said at the time. ‘That tends to be very difficult because we’re The Walt Disney Company.’
‘We certainly don’t want to get caught up in any political subterfuge, but at the same time we also realize that we want to represent a brighter tomorrow for families of all types, regardless of how they define themselves,’ he said.
The company’s ‘Lightyear’ spinoff also drew backlash after it showed a same-sex kiss between two characters – a scene insiders said Chapek initially took out, but reinstated following complaints from offended staff
After Chapek announced the halting of Florida political donations in his apology, Florida governor DeSantis responded by beginning the legislative process of stripping away Disney’s special zoning status – known as the Reedy Creek Improvement District – which allowed it to save billions in tax dollars over the years.
This rapid surfacing of these controversies would contribute to the company’s failure to rocket back to its former wealth this year as Wall Street had expected, as well as tensions between Iger and Chapek, who, once the best of friends, were reportedly not even on speaking terms at the time of Chapek’s succession.
Late last year, tension between the pair was palpable at a going-away party for Iger, held at his posh Los Angeles estate in Brentwood.
At the gathering, which saw roughly 50 guests – most of them Disney staffers – Iger spoke at length about his time at Disney in front of the crowd, spending more than 10 minutes praising former colleagues.
However, noticeably absent from the exec’s songs of praise was Chapek, who Iger barely mentioned, sources told NBC.
‘It was extremely awkward,’ said one of the guests, who asked to remain anonymous because the party was private. ‘The tension was palpable.’
According to the insiders, Iger now regrets how the changing of the guard has transpired.
But the exec has so far remained adamant that he’s not returning to Disney, telling the Times in January: ‘I was CEO for a long time – you can’t go home again.
‘I’m gone.’
Walt Disney World’s Magic Kingdom sits deserted in July 2020. Neither Disney nor Iger have offered an explanation behind Chapek’s apparent dismissal. Chapek has also yet to comment on his apparent ousting. Iger had personally handpicked Chapek to succeed him in 2019, before stepping down late last year
Their rift, according to insiders, was said to have caused issues for Chapek – who sought to ingratiate himself among other Disney executives who remained loyal to Iger because of his glittering tenure at the helm of the entertainment giant.
Chapek’s subsequent mismanagement of the Don’t Say Gay scandal seemed to only worsen the situation, with Iger reportedly unhappy by his successor’s weak, flip-flopping response.
Neither Disney nor Iger have offered an explanation behind Chapek’s apparent dismissal. Chapek has also yet to comment on his apparent ousting. DailyMail.com reached out to Disney for comment on the sudden shakeup Sunday night, but did not immediately receive a response.
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