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Bob Iger, Walt Disney Co.'s chief executive for more than a decade, agreed to a contract extension that will keep him atop the world's largest entertainment company until July 2019.
Based in Burbank, Calif., Disney announced the extension in a statement Thursday. Iger, 66, had a contract running through June 2018. His annual salary will remain unchanged, but he'll get $5 million for agreeing to the new pact.
The agreement settles who will run the film, TV and theme-park giant for the immediate future. The company has struggled to find a potential successor to its long-serving chairman and CEO. Tom Staggs, who was viewed as a potential heir, stepped down from his role as chief operating officer last May.
"It is obvious that the company and its shareholders will be best served by his continued leadership as the board conducts the robust process of identifying a successor and ensuring a smooth transition," Orin C. Smith, Disney's independent lead director, said in the statement.
The shares rose 0.8 percent to $112.92 at 11:22 a.m. in New York. They had gained 15 percent in the past year through Wednesday.
Disney has been grappling with potential succession issues during a particularly fraught time for its biggest business, cable TV. Its ESPN and Disney Channel networks have lost subscribers as viewers gravitated to new online viewing options. Theme parks and the company's film studio have picked up the slack, but Iger has said 2017 will be an anomaly for the company with sluggish profit growth.
Iger received $43.9 million in compensation in fiscal 2016, a 2.3 percent decline from the prior year. He's in line to receive a $60 million bonus in fiscal 2018 if the company hits a certain target.
Disney reported record sales and profit in the fiscal year ended Oct. 1., boosted by film releases including "Star Wars: The Force Awakens" and growth in its theme-park and consumer-products businesses. The company has projected modest earnings-per-share growth in fiscal 2017, citing fewer films scheduled for release and an 8 percent jump in cable TV programming costs due to a new contract with the National Basketball Association.
Iger holds the most powerful job in entertainment, overseeing world famous theme parks, Hollywood's most profitable film studio and the most valuable cable network in ESPN. Brands he's acquired over his 12 years as CEO, including Pixar, Marvel and Star Wars, generate billions of dollars a year in movie ticket sales, park admissions and merchandise revenue.
The contract extension buys time to turn around the struggling ESPN sports network, which dragged down sales and profit in the latest quarter.