(Feb 4): Corporate America’s most closely watched succession race has finally ended.
Walt Disney Co said on Tuesday that Josh D’Amaro, the head of parks and resorts, would succeed Bob Iger as its chief executive officer. The announcement caps the end of a three-year odyssey that began when Iger returned to run the company for a second stint, replacing his handpicked successor, Bob Chapek.
After such a highly scrutinised and prolonged CEO search, the choice of D’Amaro is both unsurprising and anticlimactic. Reports had been circulating for months that the board was uniting around the parks chief. And on Monday, when Disney announced earnings and a record US$10 billion ($12.72 billion) in revenue for the quarter in D’Amaro’s division, his ascension to the top seemed all but assured.
D’Amaro’s rise is the clearest signal yet that Disney is a hospitality and tourism company driven by its theme parks and cruise ships more than anything else. The experiences division contributed about 60% of the company’s profit last year and by some estimates accounts for 80% of Disney’s overall value. It’s also where the company is investing the most money — a massive US$60 billion through 2033.
For the Disney board, D’Amaro was therefore the safe and obvious choice — and in keeping with the Iger mold. A nearly 30-year company veteran attuned to Disney’s culture, D’Amaro even dresses like Iger (the uniform: thin-knit sweaters over collared shirt) to the point that it elicits eye rolls around the company, The New York Times has reported.
But what D’Amaro lacks is sweeping experience across an increasingly complex company that includes a relationship-driven entertainment business. That has proved to be a liability in the past; like D’Amaro, former CEO Chapek came from the parks side of the business, and his lack of finesse with Hollywood talent ended up being part of his undoing.
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Chairman James Gorman is trying to solve this problem by keeping on Dana Walden, a co-chair of the entertainment business, who was reportedly the only other serious horse in the CEO race. When Gorman orchestrated his own departure as the CEO of Morgan Stanley, he oversaw a CEO hand-off in which two other internal candidates were passed over but stayed on at the bank. He’s trying to pull off a similar move now by promoting Walden to the president and chief creative officer job. (Walden has been passed over before, when she first joined Disney through acquisition, and decided to stay.)
It’s worth noting that Disney had an opportunity to anoint its first female CEO and chose not to. Many factors went into that decision, of course. But it’s a reminder not only that women remain poorly represented in C-suites across Corporate America but that they keep getting passed over when the stakes are highest and the biggest companies are in play. Case in point: In November, Walmart Inc picked John Furner for the top job over Kath McLay, who led its international division. (She will be leaving the company.)
Despite the strength in his own division, D’Amaro inherits a company facing a weak growth forecast and a stock that has well underperformed the market since Iger returned. And while Walden has helped bring the streaming business to profitability, Disney must keep up the growth to offset a declining traditional television operation.
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D’Amaro must also navigate the heightened culture wars, which have repeatedly ensnared Disney (read: the Jimmy Kimmel crisis and Trump-ABC network settlement). D’Amaro has been able to keep his hands clean of the politicking off in the parks business, but it also means he lacks experience dealing with these kinds of thorny issues that will inevitably come up again in the Trump era.
One thing D’Amaro may not have to contend with is Iger, whose prolonged exit and continuing involvement the first time around most certainly contributed to the downfall of his predecessor. The company said Iger would step down in March and remain a senior adviser and board member until his retirement at the end of the year. At that point, he will leave the company entirely. His departure might be the biggest gift Iger can give D’Amaro to ensure his success.
Uploaded by Tham Yek Lee
