Walt Disney Co. announced a succession plan on Friday that calls for CEO Robert Iger to become chairman of the board next year and step down from his CEO duties in March 2015.
Iger's contract has been reupped through June 2016 as part of the move, and he's gotten a healthy pay boost as well — his base pay will increase to $2.5 million a year from $2 million annually.
In a statement the company said, "The Disney board took action at this time to secure the benefit of Iger’s leadership through 2016, provide for an effective, seamless succession and management transition and a continuity of the company’s corporate strategy to create long-term value for shareholders."
Iger will assume the role of chairman in March 2012, the company announced on Friday. Iger will replace John E. Pepper atop the media giant's board of directors, following Pepper's retirement from the board.
Disney called the move part of the company's "ongoing succession planning."
It also seems to be calculated to avoid the succession issues that dogged Iger's predecessor Michael Eisner. The move comes days after Pixar co-founder Steve Jobs, Disney's largest shareholder, died of cancer.
Though Iger's new contract allows for future performance-based bonuses, he will receive no further equity in the company as part of a signing bonus.
Iger will also be entitled to an annual long-term equity incentive award of options and restricted stock units based on the company's performance, Disney said.
Once bonuses were factored in, Iger received a total compensation of $29.6 million in 2010, the company disclosed in a regulatory filing.
Iger will hold the positions of chairman and chief executive officer through March 31, 2015, at which time a new CEO would be named, Disney said.
Iger will thereafter serve as executive chairman for 15 months through June 30, 2016.
Iger’s current contract was set to expire on Jan. 31, 2013.
Iger has been credited with bringing stability to Disney following the shareholder uprisings and unhappiness that characterized Eisner's final years atop the company. Iger has emphasized a strategy of corporate synergy — one that depends upon all the various fiefdoms of Disney's media empire, from its theme parks to its cable stations, working together to bolster the Disney brand.
He has also worked hard and spent a great deal of money expanding Disney's portfolio of intellectual properties. In 2006, Disney plunked down $7.6 billion to acquire Pixar and its stable of "Toy Story" and "Finding Nemo" characters and spent an additional $4 billion in 2009 to snap up Marvel and its back catalogue of superheroes.
He also tried to modernize the company by spending hundreds of millions for the rights to gaming developers Playdom and Club Penguin.
The Disney Channel and ESPN have remained strong revenues centers for the company, but the film unit has not been immune to the downturn in the DVD market. Though the studio has launched successful tentpole productions such as "Alice in Wonderland," there have been missteps like the sale of Miramax to a controversial set of owners led by construction magnate Ron Tutor.
“I’m committed to increasing long-term value for shareholders and am confident we will continue to do so through the successful execution of our core strategic priorities: the creation of high quality, branded content and experiences, the use of technology, and creating growth in numerous and exciting international markets," Iger said in a statement.
Disney's stock fell 1.25 percent to $31.63 in recent trades.