00:00After a three-year search, Disney's board and its chairman, James Gorman, have named a CEO successor.
00:07Josh DeMauro will be promoted for being Park's chief to succeed Bob Iger in March of this year.
00:12Mr. Gorman joins us now. Good morning, Mr. Gorman. Thank you for your time.
00:17I mean, let's start with the simple question. Why James DeMauro?
00:21James DeMauro. Well, it's Josh DeMauro.
00:26Josh DeMauro.
00:27Good morning, Ed. Listen, he's a fantastic executive. He's strategic.
00:35He's run a huge operations, one which Disney is now investing $60 billion of capital into.
00:43He has great creative instincts. He has what Bob Iger calls exceptional taste.
00:50He's a leader who's operated all over the globe, including the recent expansion that's going to happen in the UAE, which he did with Bob.
00:57So he's the person for this time. So Josh is just a standout executive.
01:04We looked all over the world, as you could imagine. We wanted to do this right.
01:07We wanted to make sure that whoever got the job beat all comers, and he beat all comers. So we're thrilled.
01:13Mr. Gorman, what mandatory goals, performance targets did you set, Mr. DeMauro, over the term of his contract?
01:22Well, we haven't set goals in terms of his contract. He hasn't started. He'll be taking over as CEO at the annual meeting, which is March 18.
01:31Bob will be working with him through 2026, guiding and mentoring and helping further develop him.
01:40Obviously, he laid out a vision for the board in the various discussions we had, which we had numerous ones.
01:46We really got to know Josh and all the other top executives, Dana Walden, Alan Bergman, Jimmy Pataro,
01:53just a tremendous group of four executives we had to consider in this process.
01:58And, you know, over time, we'll work with him as he settles into the job to lay out what the right strategic moves will be
02:04and how we're going to measure ourselves against those.
02:07So I'm highly confident in Josh and the team working with him.
02:11Mr. Gorman, there was reporting that Mr. Iger confided in those close to him that he wanted to leave Disney before the end of his contracted term.
02:22To what extent did that push the board to move up its succession timeline?
02:28I think, firstly, let's just talk about Bob.
02:30I mean, he's had effectively two careers at Disney.
02:33The first was an amazing 15-year run where he did deals that, you know, nobody else on the planet could have done, frankly.
02:41He worked with Steve Jobs, with George Lucas, with Rupert Murdoch to buy a bunch of studios,
02:47which we now oversee seven studios, which Alan Bergman has been overseeing.
02:51By the way, produced under Alan's leadership and working with Dana
02:56and has produced over $6 billion movies in the last two years.
03:01But Bob did a phenomenal job.
03:03When the company got in trouble, and it was before I joined the board, they invited Bob to come back.
03:07And really, there were two mandates for him.
03:10One was to get us through the very difficult post-COVID period
03:13and the changes taking place in the linear space with what was going on in streaming
03:17and now what is going on in AI.
03:19He did that.
03:20He really got the company fit for purpose.
03:23The second was to make sure, if we were to go internal,
03:26that the lead executives, and we had four of them to consider,
03:29would be ready for prime time if and when we went in that direction.
03:34We ultimately did.
03:35So Bob came to us a little while ago and said, they're ready.
03:38I mean, Josh is ready.
03:39He's ready to take over.
03:41If the board's will is to move on this, I want to step aside
03:45and I want to work with Josh as a senior advisor,
03:47stay on the board through the end of the year.
03:50It's not about the length of the contract that he was under.
03:52It's about his role as CO and then as mentor for the next CO.
03:57So hats off to Bob.
03:58It was very selfless and, frankly, it's what's great for the company.
04:02Did you consider Bob Iger continuing on in a co-chairman capacity
04:08or a chairman emeritus type role?
04:10I appreciate that there is an advisor agreement here,
04:14but does that have a definitive end?
04:16Yeah, Bob will stay as an employee advisor and board member
04:22until the end of 2026, and then he'll step off the board.
04:25He won't be an employee.
04:27He'll continue to consult to the company,
04:30consistent with what former executives do.
04:32I'm doing that at my former institution, Morgan Stanley.
04:36But no, we were not, you know,
04:38Bob was not interested in remaining as a chair or co-chair.
04:43We needed a completely clean start here, which is what we're having.
04:48He'll be there to support and mentor,
04:50and we have the right structure for the future.
04:52So we're thrilled.
04:53And, you know, you look at what's going on now
04:55that we've appointed Dana also as president
04:58and a new role chief creative officer.
05:00That's to ensure that the leadership team at the heart of this company
05:04is creativity and storytelling.
05:06And it's to ensure the leadership team brings their absolute best every day,
05:10leveraging our IP, telling stories across all of our properties,
05:15whether it's cruises or parks, our TV, our ESPN platform,
05:20and obviously the studios.
05:22So we're really set for the next decade.
05:25I'm very excited about it.
05:27Mr. Gorman, ultimately, you went with Josh DiMaro for the CEO role.
05:31In promoting Dana Walden to the CCO president hybrid role,
05:38how conscious were you of keeping her, you know,
05:41giving her that title to ensure she stays at Disney long term?
05:45Oh, my goodness.
05:46If you don't want to keep talented executives,
05:48there's something wrong with you.
05:50You know, we had an embarrassment of riches.
05:53We have, you know, as I said,
05:55Jimmy Pataro, who's run ESPN, is a fabulous executive.
05:58Alan Bergman, who's run our studios businesses at Seven Studios,
06:02has done an unbelievable job.
06:05Dana, obviously, incredible executive with a long history in Hollywood,
06:10in the industry.
06:10And Josh, we want to keep all of them, and I believe we will.
06:14I mean, I think this is a win-win for everybody.
06:17And I'm just, I couldn't be more excited about it.
06:19So, yeah, absolutely.
06:20If you have talent, you want to keep them.
06:22Finding talent, developing talent is really hard.
06:25So when you've got it, you do what you can to retain it.
06:28Well, Mr. Gorman, it seemed like a four-way playoff, right,
06:30of internal candidates.
06:32In that vein, how concerned or otherwise were you
06:35about keeping Jimmy Pataro and Alan Bergman at Disney long term too?
06:40Well, it was more than four ways.
06:42We really approached this.
06:43And when I say we, the board, we had a succession planning committee,
06:47and I was honoured to serve with Calvin McDonald,
06:51Sir Jeremy Darroch, and Mary Barra,
06:53who were the succession planning committee.
06:54Then we quickly moved to full board engagement,
06:57and each of the other directors played a meaningful role in this,
07:01and I couldn't be more grateful for what they did.
07:04But, you know, we decided early on we wanted to look at all comers.
07:08We had a list.
07:08My goodness, it must have been over 100 people initially that we thought about,
07:13we considered, we evaluated.
07:14We ended up talking to several executives outside the company
07:19because I wanted to be sure, we all wanted to be sure,
07:22that whoever got this job got it on their merits.
07:25This was, this was, they had beaten anything that was presented
07:28from the marketplace, and we had the best possible candidate.
07:31So that included external, it included internal,
07:34it included the four that you talked about,
07:37and I think all of them are very important to this company,
07:40and we're honored to have them in critical roles.
07:44Mr. Gorman, in May of 2019, I was sat opposite Bob Chapek
07:47at the opening of Star Wars Galaxy's Edge, right?
07:50And at that time, the parks chief, by February of the following year,
07:54he was CEO.
07:55And it was all about IP, his ability to take the growth in parks,
08:00the IP in parks, grow it out.
08:02Star Wars is a good case study.
08:04But to many, you know, and maybe investors had a viewpoint on this,
08:09on a co-CEO structure or somebody coming from parks
08:12to lead the wider business.
08:15Josh DiMaro has a very similar background to Mr. Chapek.
08:19How closely did you look at that, those parallels in that scenario?
08:24Not especially.
08:26We look at the individual.
08:28We don't look at, you know, just bios, whatever.
08:31I mean, you've got to look at what the individual has done.
08:33Josh is incredibly innovative.
08:35What he's done in the Imagineering space with those creative teams,
08:39building the IP into the parks, into the cruises.
08:42I mean, this is not an operations job.
08:46This is an operations and a creative job.
08:48It's telling stories that create incredible experiences
08:52for everybody who goes through those gates
08:54or gets on one of the ships.
08:55And he is incredibly capable at doing that.
08:59So I've always said what you look for in CEOs
09:01is not just what they've done.
09:03That's important.
09:04But it's what they're capable of doing.
09:05You know, I tell the story.
09:07I ran Morgan Stanley for 14 years.
09:09I'd never been a trader.
09:10I'd never been a banker.
09:12You know, you take people for what they can do,
09:15building on some of the things they've learnt in the process.
09:18And I, you know, I look at Josh as an individual,
09:21not as a comparison.
09:22And I think he'll be a fabulous CEO.
09:24He has all of the skills to lead Disney for the next 10 years.
09:27Mr. Gorman, you were brought in as chairman in part
09:32to oversee this succession process.
09:35It's now over.
09:36You've reflected on your time at Morgan Stanley.
09:40What's next for you?
09:41Do you expect to remain longer term with Disney?
09:45Or are you looking at perhaps a move back
09:47into the financial industry or something else?
09:49Suggesting I retire it?
09:53Not at all, sir.
09:54But there is a great deal of interest in what you will do.
09:56Maybe you'll let us know.
09:58You'll let us know.
09:58No, I'm not.
10:00I mean, I work with General Atlantic,
10:02which is an amazing firm in the financial space.
10:05But I'm not interested in going back into the world,
10:08the pure world of finance.
10:09I want to help the Walt Disney Company
10:11and help Josh and the new leadership team
10:14and work with Bob on this transition
10:17and help the board in making sure we deliver what we can.
10:21This company is trading at 15 times earnings.
10:23That's nuts.
10:24I mean, honestly, there are very few companies
10:27that have this quality of assets,
10:29this quality of bones, as I call it,
10:32than what we have.
10:33There are tremendous moats around the businesses.
10:35I'm excited about the prospect of what we can see
10:37from Disney over the next several years.
10:39So, no, I'm very much staying put.
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