Kareem Daniel out as returning CEO Bob Iger sets out to restructure Disney

Kareem Daniel, head of Disney Media & Entertainment Distribution (DMED), is leaving the company as returning Disney CEO Bob Iger wastes no time in re-stamping his authority on the role he left nearly three years ago.

Kareem Daniel

News of Daniel’s departure was relayed to staff in a memo from Iger on Monday, less than 24 hours after Disney stunned the entertainment industry with news that Iger would once again be CEO, replacing Bob Chapek.

In the memo, Iger said senior leaders Dana Walden (chairmen, Disney General Entertainment), Alan Bergman (chairman, Disney Studios), Jimmy Pitaro (chairman, ESPN and sports content) and Christine McCarthy (senior executive VP and chief financial officer) have been charged with designing a new structure that “puts more decision-making back in the hands of our creative teams and rationalises costs, and this will necessitate a reorganisation of Disney Media & Entertainment Distribution.”

The DMED division (fka Walt Disney Direct-to-Consumer & International) houses Disney’s streaming services, including Disney+, its advertising sales division and its linear and syndicated television networks. It was created in 2020 by then-new CEO Chapek with the goal of monetising programming from across Disney’s various content groups.

A persistent criticism was that the creation of the DMED group put too much emphasis on data and profits while neglecting the creative side of the business.

Bob Iger

“Without question, elements of DMED will remain, but I fundamentally believe that storytelling is what fuels this company, and it belongs at the centre of how we organise our businesses,” said Iger, adding the aim is to have the new structure in place in the coming months.

Disney stock rose by more than 6% on Monday as Wall Street reacted with early enthusiasm to the improbable return of Iger as CEO.

After dipping below US$91 per share last week – a 52-week low – the stock rose to more than US$100 in early trading before the market closed at US$97.58.

On Monday, securities filings from Disney revealed additional details about the circumstances of Chapek’s dismissal and Iger’s salary.

According to a filing, Disney “exercised its right to terminate without cause the employment” of Chapek as CEO. The decision to fire Chapek came around five months after the board had publicly backed him and granted a three-year contract extension.

In addition, the filing revealed that Iger will make a US$1m base salary annually in addition to a long-term incentive award that could rise to an annual total of US$25m in a combination of performance-based stock units and stock options.

It is widely expected that a great deal more changes will be forthcoming as Iger begins his second stint as CEO, after previously having led the company from 2005 to 2020, before moving into an executive chairman role until the end of 2021.

“I know change can be unsettling but it is also necessary and even energising, and so I ask for your patience as we develop a roadmap for this restructuring,” said Iger in his memo. “More information will be shared over the coming weeks. Until a new structure is put in place, we will continue to operate under our existing structure.”