Disney Names Iger CEO

Michael Eisner's 21-year Magic Kingdom reign ends Sept. 30.
By TSC Staff ,

Updated from March 13

A six-month-long talent search ended at

Disney

(DIS) - Get Report

with the naming of Robert Iger to succeed Michael Eisner as chief executive of the storied entertainment conglomerate.

The stock rose 46 cents to $28.05.

Iger's appointment is effective Sept. 30. He is currently president and chief operating officer.

Eisner, under whose 21-year stewardship Disney shares have gone from a split-adjusted 15 cents to Friday's close of $27.59, told the board last September that he planned to retire. The announcement ignited a selection process that reportedly was resolved Saturday night when

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Chief Meg Whitman took herself out of contention.

"Bob is an experienced, talented and visionary leader who has made crucial and substantial contributions toward Disney's strong performance," Disney's chairman, George Mitchell, said in a statement.

Eisner, who had previously been scheduled to remain CEO until September 2006, will also leave the Disney board.

Iger's career began at ABC, where he went from studio supervisor in 1974 to president of the television group in 1993. He was instrumental in the television network's integration with Disney, which acquired ABC parent Capital Cities in 1995. The 54-year-old New York native was named president and chief operating officer of Disney in January 2000.

"Bob is an extraordinary executive with 30 years of experience in the entertainment industry and is uniquely qualified to take charge of this incredible company," Eisner said in a statement. "As president during the past five years, he has provided steady and inspired leadership as he helped steer Disney through a storm of challenges, bringing the company to its current thriving condition in the calm waters and bright skies of financial and creative success."

While Iger's appointment ends a high-profile succession drama, it probably won't quell the public controversy that has surrounded Disney's corporate governance policies over the past 12 months. Several critics, including Walt Disney nephew and former director Roy Disney, lobbied publicly for a leader from outside the company, saying Disney needed fresh ideas to compete in new media like the Internet.

"We find it incomprehensible that the board of directors of Disney failed to find a single external candidate interested in the job and thus handed Bob Iger the job by default," Disney and fellow ex-director Stanley Gold said in a statement Sunday evening.

While Disney's board didn't comment on other candidates, it had reportedly contemplated executives including

Gap

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CEO Paul Pressler,

Yahoo!

(YHOO)

CEO Terry Semel,

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President Peter Chenin, and Whitman.

Mitchell, who previously indicated he won't be chairman past next year, said the search was "lengthy, thorough and professional ... comparing both internal and external candidates against our criteria for CEO."

Iger's reputation, which suffered with Eisner's around the end of the last decade as Disney struggled with perceptions of a creative slump, has been mending over the past several quarters as Disney's financial condition improved. The company posted unexpectedly higher earnings that easily beat analyst estimates for the fiscal first quarter. Revenue rose 30% from a year ago at its parks and resorts division and 11% in its cable and broadcast division. The top line should be further enhanced by full-quarter results from the network's hit television series

Desperate Housewives

.

The stock is virtually unchanged in 2005 but has risen close to 80% from its trough levels of late 2002. Still, it traded over $40 in 2000, and Eisner's inability to re-elevate eventually led to calls for his ouster.

"It is with a considerable amount of satisfaction and even pride that I approach the end of my term as CEO of this company," Eisner said in a letter to the board. "There is a tinge of sadness added to these emotions, similar to the feeling one experiences at the end of a great day at Disneyland as one pulls into the station after the final E-ticket ride."

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