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Iger to Stay Put as President of ABC

January 30, 1998|SALLIE HOFMEISTER | TIMES STAFF WRITER

Robert A. Iger has decided to stay on as president of Walt Disney Co.'s ABC Inc. unit, waiving an option in his contract that allows him to leave, according to the company.

The decision lays to rest uncertainty about near-term management changes at the unit. Amid declining ratings for the ABC television network and other problems, Iger's future had been a source of speculation for at least a year.

"He is not exercising his option," said Patricia J. Matson, vice president of corporate communications at ABC. "He intends to stay."

Iger, 46, could not be reached for comment.

Under a five-year contract signed in July 1995 when Disney agreed to buy ABC, Iger has an option to exit after 2 1/2 years of service--which comes at the end of this month.

Sources said Iger waived the option in exchange for certain considerations. Among them, friends say, Iger sought "protection" in the event Disney names a new president. Executives often have provisions in their agreements allowing them to collect on their contracts and leave if someone is brought in over them.

Since Michael Ovitz left as president of Disney in late 1996, Iger has been reporting to Chairman and Chief Executive Michael Eisner. Although Eisner says he has no plans to fill the position of president, Joe Roth, head of Disney's music business and movie and television studios, is eager to move up, according to industry sources.

Though ABC's cable operations, led by sports juggernaut ESPN, are booming, Iger's tenure as president has been clouded. Shortly after being acquired by Disney, ABC plunged in the ratings and erupted in turmoil. Longtime news chief Roone Arledge was forced to groom a successor, David Westin, appointed by Iger. Ted Harbert left as head of entertainment after a poorly orchestrated transition to Jamie Tarses, a skillful developer but an inexperienced manager.

Although ABC's performance has yet to turn around, the management upheaval seems to have settled down.

The rise in Disney's stock since the merger could translate into a huge payday for Iger. According to documents filed by Disney before the merger, Iger's base salary is $1 million a year, with a $2-million bonus the first year and discretionary annual bonuses thereafter, with a target of $1 million a year. He also has an option to buy 700,000 shares of stock at a strike price of $57.19. The option vests over seven years.

Disney's stock closed Thursday at $106.25, giving Iger a potential profit of about $34 million on those options.

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