Walt Disney Co.'s selection of Thomas O. Staggs as chief operating officer might have surprised outsiders -- but not people who have known Staggs for years.
“Tom has been a star since the second he arrived at Disney,” former Disney CEO Michael Eisner told the Los Angeles Times. “He is a terrific choice. He is excellent working with people, working with investors and he knows Disney better than almost anyone else.”
The world's largest entertainment company on Thursday clarified its succession planning by naming Staggs, a 25-year Disney veteran, as its No. 2 executive.
Staggs immediately stepped into the COO role, signing a new three-and-a-half-year contract that will pay him a base salary of $2 million a year, and bonuses that could total 250% of his annual base, according to a filing with the Securities & Exchange Commission.
Staggs also will receive $2.4 million in Disney stock and options.
But no one is preparing just yet for the exit of Disney Chief Executive Bob Iger, who turns 64 this month.
Last fall, Disney's board extended Iger's contract once again, this time keeping him at the helm of the world's largest entertainment company through June 2018. (Staggs' new contract also extends through June 2018.)
For the last five years, Staggs has served as chairman of Disney's Parks and Resorts, the second largest division at Disney in terms of revenue. More than 130,000 people work at the Disney parks and resorts. Before that, Staggs worked more than a decade as the company's chief financial officer.
Thursday, Disney stopped well short of saying that Staggs, 54, would automatically succeed Iger.
When asked whether Staggs would likely get the top job, Eisner said he didn't know.
“It certainly is a good step, and my guess is that this will make him the front-runner from inside the company,” Eisner said.
Disney's succession planning has been orderly this time around, in contrast to the hand-off from Eisner to Iger in 2005 -- or the particular messy three-year bake-off among three senior executives at Warner Bros., Hollywood's largest movie and TV studio.
Thursday's announcement helped send Disney shares, which have been trading at all time highs, even higher.
Disney stock closed up $1.36 to $102.64 a share.
"Bob and his team have done an incredible job managing the Disney brand, building and growing theme parks and the studio is running well," Eisner said. "And ABC and ESPN were monumental acquisitions. You cannot ask for stronger management of those assets.”
Staggs has been a key part of the management team during two Disney administrations -- first Eisner's and now Iger's.
In addition, it might be difficult for an outsider to navigate Disney's distinct corporate culture. Eisner said it was good to have an internal front-runner.
“It’s always better to promote from inside the company," Eisner said. "It’s better for corporate governance, for consistency for historical knowledge and brand awareness. Tom understands all of that, he knows all of the brands, from the theme parks to ESPN.”
What was it about Staggs that impressed Eisner, the man who hired him, more than 20 years ago?
“I just liked him," Eisner said. "I liked his Midwestern attitude and his intelligence. He’s very personable. He’s just an effective executive and he is not pretentious, he’s not arrogant and he doesn’t pretend to know it all.
"Not only that, he understands the Disney brand," Eisner said. "He’s been working at the parks for the last five years and he has been running a very big organization.”