The Magic of Disney

When The Walt Disney Company hands the keys to its kingdom to Josh W. D’Amaro next month, it signals a subtle but telling shift in how it pays for leadership. Outgoing chief executive Robert A. Iger, one of corporate America’s most highly compensated and closely watched CEOs, exits with a pay package that reflects both his storied legacy and the board’s reliance on equity‑driven upside. The compensation package of Iger’s successor tells a different story—one shaped by succession planning, performance leverage, and a deliberate recalibration of cash, stock, and one-time awards.

Few executives are as intertwined with a company’s modern identity as Iger is with Disney. First joining the company through its acquisition of Capital Cities/ABC in 1996, Iger rose to CEO in 2005 and spent 15 years reshaping Disney through landmark acquisitions—including Pixar, Marvel, Lucasfilm and most of 21st Century Fox—while expanding the company’s global parks footprint and launching its direct-to-consumer strategy. Iger initially stepped down in 2020, only to return two years later after the board ousted his hand-picked successor Bob Chapek, making Iger one of the most prominent examples of a corporate “boomerang” CEO (see related story on boomerang CEOs).

Why Iger Is Departing—This Time for Good

Iger’s second act was never intended to be permanent. The Disney board asked him to return in late 2022 to stabilize operations, repair investor confidence, and reset a succession process that had gone off the rails after Chapek’s troubled tenure. With cost cuts executed, strategic priorities clarified, and a new leadership bench in place, Iger set a definitive exit timeline, transitioning to a senior advisory role before fully retiring at the end of 2026, when he will also step off the board. At 74, Iger has publicly framed his departure as both a governance necessity and a personal decision—closing a chapter that has defined more than two decades of Disney’s corporate life.

Incoming CEO Josh D’Amaro is a 28‑year Disney veteran whose career has unfolded almost entirely inside the company. Since joining Disney in 1998, D’Amaro has held roles in finance, strategy, marketing, and operations, ultimately rising to lead Walt Disney World and, later, Disney Experiences—the company’s largest and most profitable division. Under his stewardship, parks, resorts, cruise lines, and consumer products became critical to earnings.

The structure of D’Amaro’s first-year CEO package totals approximately $44.7 million. It includes a $2.5 million base salary, a performance‑based annual bonus target equal to 250% of salary, recurring long‑term equity awards of roughly $26.3 million per year, and a one‑time promotion grant valued at about $9.7 million. The design reflects the board’s desire to tightly align his pay with Disney’s next phase of execution.

Differences and Similarities: Iger vs. D’Amaro

• Equity-heavy design for both CEOs aligns incentives with long-term shareholder value; Iger’s mix included both performance stock units (60%) and stock options (40%). D’Amaro’s long-term incentive (LTI) has a target value of $26.2MM, subject to adjustment by the compensation committee based on its evaluation of his performance
• Cash elements: D’Amaro’s base salary ($2.5MM) is higher than Iger’s ($1MM in FY2025)
• One-time awards: D’Amaro receives a one-time promotion grant (~$9.7MM); Iger’s FY2025 disclosures did not include a one-time grant
• Total pay positioning: Iger’s FY2025 target pay ($43.6MM) was basically equivalent to D’Amaro’s first-year expected package (~$44.7MM)

Generally, new CEOs come in at a lower rate than the outgoing CEO. Clearly, the Disney board has confidence in D’Amaro’s readiness to step into the CEO role, given his extensive experience and the successful expansion and financial performance of Disney parks and cruises. His pay package as CEO reflects that.

Accordingly, Disney’s board emphasized an extensive succession process and compensation design aimed at long-term value creation, timing equity heavily, and setting sizeable performance-contingent opportunities for the incoming CEO. The selection process that ultimately led to D’Amaro’s promotion was overseen by Disney Chair James Gorman, who joined the board in 2024 after managing a widely praised succession process at Morgan Stanley. Iger was chair when the board picked Chapek. Annual proxy filings reviewed by Farient detail committee oversight, peer comparisons, and pay rationale.

What to Watch: To Infinity and Beyond

• Performance targets vs. outcomes that govern D’Amaro’s annual bonus and long-term incentives, particularly as they compare to Iger’s
• Any future adjustments to long-term incentive mix as compared to Iger’s 60% PSUs/40% options
• Pay vs. performance alignment in the 2026 and 2027 proxy statements, including any realizable pay analyses and CEO pay ratio disclosures
• Impact of strategy execution on equity values and realized compensation such as streaming profitability, ESPN Direct to Consumer, and Experiences investments