For Disney shareholders, the last five years have been anything but magical.
Since March 19, 2020, shares of the entertainment giant increased a mere 5.7 percent through March 19 this year, even as the S&P 500 index gained over 135 percent during the same period.
For context, here are the five-year returns for other companies in the entertainment industry, as of March 20:
- Netflix: 189%
- Live Nation: 260%
- Sony: 122%
From streaming wars to political skirmishes, holding this blue chip stock has been a white-knuckle ride for long-term Disney investors.
While Disney (DIS) appears to have stabilized over the last year and is projecting future growth in several of its business lines, concerns and questions remain — including the departure of CEO Bob Iger.
Why has Disney’s stock lagged for five years?
Disney’s stock has been on a roller coaster for half a decade, driven by a mix of internal strategy pivots and external headwinds.
Troubles began in March 2020, when the COVID-19 pandemic shuttered Disney’s theme parks, halted movie productions and eliminated box office revenues.
But the company appeared well-equipped to weather the economic downturn — and stay-at-home orders — with Disney+, its flagship streaming service that launched a few months earlier in November 2019. Streaming became Disney’s lifeline and Disney+ subscriptions surged. As a result, the stock ran up in November 2020, peaking at nearly $202 a share by March 8, 2021.
Investors initially cheered, but high content costs, slowing subscriber growth and operating losses in the billions soon drew concern. By Nov. 30, 2021, the stock was well on its way to a steep decline.
Troubles mounted in 2022, when Disney waded into Florida politics by opposing Gov. Ron DeSantis’ so-called “Don’t Say Gay” bill. DeSantis retaliated, stripping Disney of its special district status, leading to lawsuits and political back-and-forth drama. By June 13, 2022, the stock was as low as the close on March 23, 2020, during the height of the brief pandemic recession.
The culture war feud put a target on the back of then-CEO Bob Chapek, who had taken the reins from Iger in February 2020. Chapek’s mismanagement of the controversy — alongside declining TV revenue and mounting streaming losses — culminated in Chapek’s ousting and Iger’s surprise return as CEO in late 2022.
The CEO switcheroo briefly bolstered the company’s stock, but challenges persisted. Theme parks thrived post-pandemic, but Disney’s traditional linear TV holdings, including ESPN and ABC, kept sinking. Meanwhile, Disney’s direct to consumer unit, which includes Disney+, amassed $1.5 billion in losses in the last quarter of 2022.
In early 2023, activist investor Nelson Peltz staged a proxy battle with Disney, pushing for the company to fix its streaming business, bring back its dividend (which had been eliminated in 2020) and sort out its tangled CEO succession plans. Disney responded by promising to slash about 7,000 jobs and cut $5.5 billion in costs, focusing on profitability over growth.
The stock enjoyed a brief rally that February, after Peltz called off the proxy fight, but by the summer, the stock slumped again. In October 2023, Disney shares hit their lowest point over the last five years, at $79 a share, down nearly 60 percent from just two-in-a-half prior.
The stock remained volatile throughout 2024 as investors debated whether the company was truly turning a corner.
Iger’s pay soars as Disney’s stock simmers
During Disney’s annual investor meeting this week, 88 percent of shareholders approved the compensation package for Disney’s executives, including Iger.
The company’s 2025 proxy statement shows Iger’s pay has soared in recent years.
In the fiscal year ending Sept. 30, 2023, Iger’s total compensation hit $31.6 million, while Disney’s stock fell 14 percent. The following fiscal year, his package ballooned 30 percent to $41.1 million (including a $7.2 million bonus), while the stock gained 18.7 percent but still sat more than 50 percent lower than its all-time high in March 2021. For context, median CEO compensation rose 7.8 percent that same year, according to Harvard research.
When asked during the March 20 meeting how Disney intends to return more value to shareholders, Iger pointed to the $1 dividend increase approved in December. He also noted share buybacks, which totaled $3 billion in fiscal year 2024. The CEO said he expects a similar number of buybacks likely for the current fiscal year.
Disney shows promise as it navigates new media landscape
Moving forward, Disney faces a complicated transition as it continues its shift from a traditional, linear television model to a streaming-centric future.
The company achieved a significant milestone in mid-2024, when its streaming division achieved profitability for the first time. It built on that momentum, and by the December quarter, its streaming businesses generated a $293 million profit, reversing a $138 million loss from the prior year.
Disney’s diverse portfolio — encompassing theme parks, movie studios, cruise ships, media networks and intellectual property rights — also presents unique opportunities.
Compared to some entertainment giants, Disney’s stock is actually faring pretty well. Here are the five-year returns for other competitors, as of March 19:
- Comcast: 1.56%
- Paramount: -5.47%
- Warner Brothers Discovery: -49.81%
The March 20 shareholder meeting highlighted new developments slated for 2025, including full integration of ESPN into the Disney+ app, the largest expansion of Magic Kingdom at Disney World in Florida and the addition of seven cruise ships set to launch by year’s end.
The company has also released promising results recently. During Disney’s Q1 2025 earnings on Feb. 4, it revealed revenue totaling $24.7 billion for the quarter ending December 2024, up 5 percent from $23.5 billion a year earlier. Meanwhile, the company’s operating profit grew 31 percent year over year.
“Amid ongoing and unprecedented industry disruptions, we have emerged from a period of considerable challenges well positioned for growth and optimistic about our future,” Iger wrote to shareholders in the company’s proxy statement.
Iger’s upcoming retirement and Disney’s future
Despite Disney’s progress, the company is still down about 11 percent year-to-date as of March 19, and its long-term growth remains in question, especially as Iger’s retirement looms.
The CEO’s contract expires in early 2026 and the company remains tight-lipped about who will take his place.
In its 2025 proxy statement, Disney’s board chairman James Gorman wrote that the board plans to announce a new CEO early next year.
“The full board is engaged in and committed to finding the right leader for the company and we are planning for a smooth leadership transition that will enable Disney’s continued success,” Gorman wrote.
Details of the succession plan weren’t discussed at the annual shareholder meeting.
Bottom line
All told, it’s been a confusing story for long-term Disney shareholders the last five years. While the company seems poised for growth, its modest dividend increase and share buybacks seem insufficient to offset years of stagnant stock performance.
With Iger’s upcoming succession and lingering challenges in traditional media, it remains to be seen whether Disney’s next chapter will bring a happily-ever-after outcome for investors.
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