It's no surprise that Bob Chapek has been let go as chief executive of Disney (DIS:NYSE). The shares are trading 31% lower than when he was appointed as CEO on 25 February 2020, staff morale appears to have got worse, and customers are angry at large price hikes and constant disruption to rides in its theme parks.
Last month Chapek suggested adults didn't want to watch animated movies, clearly forgetting about the roots of the business and how classic Disney cartoons are still loved by multiple generations.
It seems as if Chapek was totally out of tune with what customers want from the company, with many priced out of enjoying its experiences.
Former chief executive Bob Iger is back as the boss for the next two years and no doubt customers, staff and shareholders are hoping he'll bring some of the magic back to the House of Mouse.
Investors are certainly pleased with the news, judging by how Disney's shares jumped more than 8% in pre-market trading following the announcement.
There are also crucial comments in the press release for Iger's reappointment with chairman Susan Arnold saying he is ‘greatly admired by Disney employees worldwide’ and has ‘the deep respect of Disney's senior leadership team’. This respect will be important if Disney is to regain the trust of its staff.
Reports suggest workers were unhappy at many of Chapek's decisions, such as a push to move theme park designers from California to Florida and the firing of senior TV content executive Peter Rice. Having Iger back running the business should help boost staff morale.
Iger achieved a lot during his first stint at the top, both strategically and for investors. Disney's shares increased by 459% during the period in which he was CEO, from 30 September 2005 until 25 February 2020.
During his tenure, the company bought the rights to Star Wars and Marvel, as well as buying animation studio Pixar and media group 21st Century Fox. He also launched the Disney+ streaming platform which has provided another avenue for people around the world to engage with the brand, although it remains a loss-making venture.
While those acquisitions have been very successful, not everyone appears to be welcoming Iger back with open arms. Wall Street Journal reports that activist investor Nelson Peltz opposes his rehiring and wants a seat at the board to push for more cost cuts.
