Disney Board Gives Reason For Chapek's Firing And Details On His $20million+ Exit Payment
In a new Disney SEC filing, the company gives an explanation on why ex-CEO Bob Chapek's contract was extended early in 2022 but then fired in late 2022, as well as his compensation package.
In June 2022, the Board agreed to extend Mr. Chapek's employment agreement based on Mr. Chapek's work navigating the Company through the unprecedented challenges of the pandemic and growing the Company's streaming business. The Board continued to spend significant time discussing the leadership of the Company in the months that followed and determined that Mr. Chapek was no longer the right person to serve in the CEO role. The significant developments and change in the broader macroeconomic environment over this period informed how the board viewed the appropriate leader in the light of the rapidly evolving industry and market dynamics. The Board therefore concluded that as Disney embarks on an increasing complex period of industry transformation, Mr. Iger is best situated to lead the Company while an appropriate longer-term successor is identified.
On November 20, 2022 (after fiscal 2022), the Board decided to exercise its right to terminate Mr. Chapek's employment without cause. In connection with this termination, in the event that Mr. Chapek successfully completes all of the terms of his post-employment consulting agreement and does not violate the terms of the employment agreement that survive his termination or the general release, Mr. Chapek's severance would strictly conform to the terms of his employment agreement such that he would be entitled to the following cash termination payments:
$6,527,397 in remaining base salary through the scheduled expiration date of his employment agreement. as amended; and
$1,027,397 equivalent to a pro-rated target bonus for fiscal 2023.
Bob Chapek is also entitled to accelerated restricted stock units worth around $12million, bringing the total exit payments to around $20million.
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