Thursday, October 02, 2014

No Surprise

As Jeffrey K. wanting to sell DreamWorks Animation is not startling news, neither is this:

Bob Iger, previously set to retire in June 2016, will remain Disney's (DIS -1.1%) chairman/CEO for two years longer, under the terms of a contract extension. The extension "maintains the same annual compensation terms" as Iger's existing deal, but includes "the opportunity to earn a performance-based retention bonus if certain financial performance goals are met over a five-year period ending with fiscal year 2018." Details will be provided in an 8-K tomorrow.

As it is, there had been speculation Iger, 63, would stay on board beyond 2016. ...

When the Head Guy is presiding over record-high multiples and a record-high stock price, you don't get rid of the Head Guy.

This is business-econ 101.

If Michael Eisner had been riding atop similar earnings eleven years ago, Michael could have survived Roy Disney's corporate guerrilla campaign. Because a booming stock price and gushers of money trump everything else.

But at the time, Diz Co.'s profits were faltering, so it was "buh-bye, Mr. Eisner".


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