Bob Iger abruptly stepped aside as Walt Disney Co.’s chief executive officer, handing the reins to theme-parks head Bob Chapek after years of speculation over who would succeed the longtime CEO of the world’s largest entertainment company.

Chapek, 60, who led Disney’s theme parks and consumer products businesses, takes over immediately, the company said Tuesday. Iger will stay to direct the company’s creative endeavors as executive chairman through 2021.

With the appointment, Chapek lands one of the most coveted jobs in entertainment. He’s a 27-year company veteran who led Disney’s home-video business during the DVD era, before transitioning to consumer products. In that role, he reorganized the business to cut costs and focus on franchises, including the “Frozen” toy craze.

“It’s a huge surprise,” Laura Martin, a Needham & Co. analyst, said on Bloomberg Television. “The suddenness of it -- the fact that it’s as of today and they don’t have a new parks head yet -- makes it feel like it’s all very sudden.”

The change jolted investors, who sent the shares down as much as 4.3% to US$122.69. The stock had fallen 11% this year through Tuesday’s close.

But in an interview on Bloomberg Television, Chapek said he’ll follow the course laid out by Iger, who has recently steered the company into new streaming businesses such as Disney+.

“The center of our brand is creative storytelling,” Chapek said. “If the creative storytelling is right, then everything else is right, no matter where you put it, whether you put it in the theatrical channel, Disney+ or the theme parks.”

While Disney had been under pressure to name a successor, Iger wasn’t expected to relinquish the CEO role right away. The timing of the announcement, just weeks after an upbeat earnings report, created an air of mystery around a transition that has been frequent parlor talk in Hollywood.

Disney has bet its future on streaming services, including the Disney+ platform that launched in November. That had fueled speculation that its streaming chief, Kevin Mayer, was in line for the CEO job.

On a call with investors on Tuesday, Iger said the transition will allow him to focus on creative endeavors at the company in a way that he couldn’t when he was still running the business day-to-day.

Chapek, on the other hand, will be able to immediately immerse himself in businesses he hasn’t run before, such as television. A native of Indiana, he is just the seventh CEO in Disney’s history. The company said Tuesday that its new chief will report to both Iger and the board.

“When I leave, he will be familiar with all parts of the company,” Iger said. “Not just the ones he managed.”

Avatar Land

Iger handed Chapek the job of parks chief five years ago, a role that Disney’s now former CEO has long deemed crucial because it represents daily interaction with fans around the world.

In that post, Chapek supervised the launch of the new Avatar-themed land in Orlando, Florida and the US$5.5 billion Disney Shanghai resort, as well as two Star Wars-themed lands that opened last year in California and Florida.

Chapek also redesigned pricing in the parks, selling higher-priced tickets on peak travel days in an effort to manage crowds. Theme-park attendance was flat last year, but revenue and profit rose under the new model.

Disney didn’t name a successor to lead the parks, underscoring the swiftness of the change.

Iger, 69, steered Disney through several multibillion-dollar acquisitions, including the US$71 billion takeover of Fox’s entertainment assets last year.

Movie Maestro

He set the industry standard for managing in the film business, cutting back on the number of one-off pictures to focus on established characters and franchises that could be marketed around the world.

Along those lines, he acquired Pixar, Marvel and Lucasfilm, building the most successful movie studio in Hollywood history. With the acquisition of Fox, Disney garnered one-third of total U.S. box office revenue last year.

Iger postponed his retirement multiple times as he pondered life after Disney and stuck around, most recently, to supervise the Fox deal. Chapek’s appointment is a setback for other potential contenders, most notably TV streaming chief Mayer.

Chapek takes over a company that faces challenges, such as the continuing erosion of viewers in its core TV business, led by ABC and ESPN. The coronavirus, meanwhile, is crimping profit at his parks division. The company’s resorts in Shanghai and Hong Kong remain closed under government orders.

He’ll be well compensated. Chapek will enter the job with a US$25 million annual target compensation, consisting of US$2.5 million in salary, a US$7.5 million target bonus and a long-term incentive worth US$15 million, according to a regulatory filing.

Creative Challenges

While all of his dealmaking brought Disney a wealth of content, Iger clearly has his work cut out for him on the creative side as well.

The newly acquired Fox studio has produced a string of duds and Disney has yet to prove itself capable of delivering more grown-up films or online programming aimed at adults.

And one of Iger’s crowning achievements, the acquisition of the Star Wars brand, remains a question mark as the company takes a hiatus on making films until it can plot out the future of the franchise.

Over his 15 years as CEO, Iger collected more than US$500 million in salary, bonuses and share sales, according to data compiled by Bloomberg. He still owns stock worth about US$150 million as of Tuesday’s close in New York.

In an interview on Bloomberg Television, Iger deflected questions about his future after Disney.

“I will have to use my imagination,” he said. “I am concentrating on the priorities we have talked about. I will not take my eye off the ball until I retire at the end of 2021.”