Disney has extended the contract of CEO Bob Iger

The Walt Disney Company It will extend CEO Bob Iger’s contract by two years, extending his tenure through 2026.

The company’s shares were virtually flat following the news.

Iger told CNBC in February that he did not intend to stay in the post for more than two years, which would have taken him through 2024. Iger returned to Disney in November, taking over the job from Bob Chapek, who was named CEO in early 2020. During his new role as CEO, Iger planned to groom his next successor.

The succession process remains a key issue for Iger, who said in a statement Wednesday that the company’s board of directors continues to evaluate candidates for the position. “I want to ensure that Disney is in a strong position when my successor takes the helm,” Iger said of extending his contract. “The importance of the inheritance process cannot be underestimated.”

However, Iger has previously deferred succession decisions. On four separate occasions between 2013 and 2017, he was extended as CEO after saying he planned to retire.

Iger’s second stint at Disney coincided with an upheaval in the legacy media space. Big players like Disney have had to contend with a rapidly changing landscape as advertising dollars dry up and consumers cut cable subscriptions as they increasingly favor streaming.

Listen: CNBC’s David Faber will interview Disney CEO Bob Iger on CNBC’s “Squawk Box” Thursday at 8 a.m. ET.

However, navigating the streaming space has been challenging in recent quarters as costs have increased and consumers have become more conscious of media spending. Decline in streaming subscriptions Netflix, Disney, Warner Bros. It cut valuations for Discovery and Paramount Global roughly in half in 2022, with several stocks rebounding along with the broader market in the first half of this year.

Upon his return, Iger undertook an extensive restructuring of the company, including laying off 7,000 employees.

“We’ve made important and sometimes difficult decisions to address some existing structural and efficiency challenges, and I’m proud of what we’ve been able to accomplish together,” Iger said in a letter to employees Wednesday, obtained by CNBC. “But there is much more to be done before this transformational work is complete, and I am committed to seeing it through.”

Disney is pulling programming from streaming services to save money. The company is also trying to recover from a major setback in its animation business, as its latest Pixar film, “Elemental,” recorded the lowest opening weekend for the studio since the 1995 premiere of the original “Toy Story.”

When Disney recently finished cutting 7,000 jobs, it saw the departure of veteran Chief Financial Officer Christine McCarthy.

“Bob has put Disney on the right strategic path to once again create lasting value, and the board has determined that he is best placed to ensure the successful completion of this transformation while allowing sufficient time to position a new CEO for long-term success.” shareholders are interested in extending his term, and he has agreed to our request to remain as CEO until the end of 2026,” Disney Chairman Mark Parker said.

CNBC’s David Faber will interview Iger on CNBC’s “Squawk Box” Thursday at 8 a.m. ET.

Read Iger’s full tribute to Disney employees:

Dear Colleagues,

I want to thank you for your tremendous dedication, patience and optimism as we take important steps to reposition the company for continued creative and financial success. Since returning to Disney just seven months ago, I’ve explored nearly every aspect of our business to fully understand the great opportunities that lie ahead of us, as well as the challenges we face on multiple fronts.

We’ve made important and sometimes difficult decisions to address some existing structural and efficiency issues, and I’m proud of what we’ve been able to achieve together. But there is much more to accomplish before this transformative work is completed, and I am committed to seeing it through.

To that end, I am writing to share that I have agreed to the Disney Board’s request to stay on as CEO for an additional two years, through the end of 2026.

As I have said many times since we began this important transformation of the company, our progress will not be linear as we continue to navigate the challenging economic environment and tectonic shifts occurring in our industry. This is a moment that requires us to be irrevocable, strategic and clear about the way forward.

What’s important to me is that Disney is in a strong position when my successor takes the helm. As the Board continues to evaluate highly qualified internal and external candidates, I remain intensely focused on a successful CEO transition.

Despite all this, I remain unwaveringly optimistic about Disney’s future. I believe in this company. I believe in the leadership team around me. I believe in you – our amazing staff and Cast Members. It’s been an honor to work with you as we define Disney’s path forward together, and I look forward to all that we continue to accomplish in the years ahead.

Thank you for everything you do,

— CNBC’s Alex Sherman, Kerry Caufield and David Faber contributed to this report.

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