Walt Disney Co Chief Executive Bob Iger could end up extending his term for a third time, analysts said on Tuesday, following the surprise announcement that Chief Operating Officer Tom Staggs, a potential successor, will step down in May.
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Disney's shares were down 2 percent in premarket trading, suggesting that investors weren't overly concerned about that prospect or Staggs' decision to move on after just over a year on the job.
The media and entertainment company didn't give a reason for Staggs' exit but said on Monday that he would remain a special adviser to Iger through September.
Staggs had never formally been named Iger's successor, but his move into the No. 2 job had put him in pole position to become CEO after Iger's scheduled departure in 2018.
A source with knowledge of the situation told Reuters that Staggs decided to leave after learning he was not guaranteed the CEO job.
"...We think Iger could potentially delay his exit if need be," Cowen and Co analysts said in a client note.
If Iger, 65, extends his term it wouldn't be the first time.
He has insisted that he will retire in June 2018, although the board previously convinced him to extend his contract twice.
In his 15 years as CEO, Iger has led Disney to record profits and executed successful acquisitions of Pixar, Marvel Entertainment and "Star Wars" producer Lucasfilm Ltd.
"To borrow a phrase, the best successor to Bob Iger may very well be Bob Iger," Nomura analysts said in a note.
Still, Disney's shares have declined 6 percent since the beginning of the year.
Iger recently acknowledged subscriber declines at Disney's sports network ESPN, raising concern among investors about how the channel would adapt to streaming, as customers move away from traditional pay TV services.
"We think Mr. Staggs had been working to solve ESPN and 'future of TV' issues while COO ... but TV operations are unlikely to be disrupted by his departure," the Nomura analysts wrote.
Disney's shares were trading at $96.38 before the opening bell.
(Reporting by Tenzin Pema and Sayantani Ghosh; Editing by Ted Kerr; Editing by Sayantani Ghosh)