According to former Morgan Stanley CEO James P. Gorman, the secret to a company’s smooth CEO transition “starts with a very basic principle: Do you, as the boss, want to leave the job?”

That question has haunted Disney’s succession story for over a decade.

The Search for Disney’s Next CEO

A new story by Meg James for the Los Angeles Times covers the ongoing search for a new CEO of The Walt Disney Company. Disney brought in Gorman a year ago as their new chairman of the board to lead the CEO search. He retired from Morgan Stanley in late 2024 after 14 years as CEO. Though multiple companies asked him to join their boards, he ended up at Disney.

“He chose Disney because it was the most challenging,” said Wharton School Dean Erika H. James, who serves on Morgan Stanley’s board. “He felt he could be that change agent in service to Disney … given all that was going on with the company.”

At the time, Disney was still recovering from the “Don’t Say Gay” controversy that led to Governor Ron DeSantis taking over the Reedy Creek Improvement District, renaming it the Central Florida Tourism Oversight District, and appointing his own board. Nelson Peltz and Jay Rasulo were fighting for seats on Disney’s board. And Bob Iger had barely been back in the CEO seat.

Iger returned in late 2022 when the board fired his first successor, Bob Chapek. Iger has called Chapek his “biggest regret.”

Iger first announced his retirement in 2015, which David F. Larcker, director of the Stanford Graduate School of Business Corporate Governance Research Initiative, called “odd” because Iger was in his early 60s and not ready to leave Disney.

Tom Staggs was made chief operating officer, positioned to take over from Iger, but left the company in 2016 when Iger had still not stepped down.

When Chapek was finally named successor in 2019, Kevin Mayer, another potential CEO, left. (Both Mayer and Staggs have reportedly consulted Disney in the past few years and some have even considered them CEO candidates again.)

Chapek took over in early 2020. Just a few weeks later, the country shut down due to the COVID-19 pandemic. Iger was still executive chairman of the board and reportedly retained some CEO duties in the midst of the unprecedented event. He officially retired at the end of 2021 — only to return to the CEO position 11 months later.

“There have been all of these starts and stops with succession,” Larcker told the LA Times. “It’s been a bit embarrassing for such a big company…. They’ve put people in a position where they are kind of doomed and Iger keeps coming back for another two years, another five years. That’s not the way it’s supposed to work.”

Iger’s contract was originally for two years, but this was quickly extended through 2026.

Of course, it’s not just Disney that has been going through a rough 5-10 years. “There’s so much volatility — economic, geopolitical and cultural volatility,” said Erika James. “People have a lot of anxiety, [which] makes it so difficult for leaders to gain a solid footing. Every day, you can be confronted with something that’s deemed a crisis.”

Gorman managed a successful multi-year hand-off at Morgan Stanley. Erika James said he had a disciplined “framework in mind.” Each candidate spent time with board members and in October 2023, Morgan Stanley named Ted Pick as Gorman’s CEO successor. The other candidates were given sizable portfolios, promoted to co-presidents, and received a one-time bonus of about $20 million to keep them with the firm.

Gorman and the board are reportedly planning similar moves with the Disney CEO candidates. The board previously said they are “committed to not only finding the right leader, but also focused on …. positioning the new CEO for long-term success,” which includes “surrounding the new CEO with a team of senior executives who can work together to lead the company into the future.” That could be a hint at candidates who are passed over being named co-presidents.

“I don’t know that there’s anyone who could have navigated these kinds of leadership transitions better than James [Gorman],” said Erika James. “He’s not afraid to do the hard things.”

Gorman “led the succession by remembering these are real people who are at stake. Shareholders are real people, the employees who will get a new leader are real people and the contenders for this role are real people.”

In a previous Morgan Stanley interview, Gorman brought up the question of if the CEO wants to leave. “And I did,” he said. “What that does is frees you up so that your successor has every opportunity to succeed.”

Iger is now 74-years-old. Sources close to the company told the LA Times he is actively mentoring Disney’s CEO candidates.

Disney Experiences Chairperson Josh D’Amaro is still the favorite to take over. But the problem is finding someone who can balance both the theme parks and Hollywood. D’Amaro has no experience in the latter.

The other frontrunner is Disney Entertainment co-chair Dana Walden. She has the movie industry covered but not theme parks.

Walden’s fellow Disney Entertainment co-chair Alan Bergman and ESPN head Jimmy Pitaro are also under consideration.

Disney hasn’t just brought in Gorman to find their next CEO. He leads a committee — which Disney didn’t bother with last time — that also includes General Motors CEO Mary Barra, Lululemon Athletica CEO Calvin McDonald, and former Sky broadcast chief Sir Jeremy Darroch. They not only need to find a replacement, but also keep shareholders happy.

“They must prove to investors that the value of their premium content and theme parks is meaningful,” Moffett Nathanson Research analyst Robert Fishman said. “Investors need confidence that their streaming pivot, which is well underway, will have a big payoff — more than what investors can appreciate today.”

Gorman plans to announce Disney’s next CEO early this year, likely next month.

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