Apple Names Levinson Chairman, Disney’s Bob Iger to Board
Apple Inc. (AAPL) beefed up its board by appointing Art Levinson as chairman, filling a vacancy left by the death of Steve Jobs, and adding Walt Disney Co. (DIS) Chief Executive Officer Robert Iger as a director.
Levinson, on Apple’s board since 2000, becomes non- executive chairman, the Cupertino, California-based company said yesterday in a statement.
Adding Iger may cement ties to Disney, on whose board Jobs had a seat, and may ensure that Apple retains access to the entertainment company’s TV shows and movies, said Gene Munster, an analyst at Piper Jaffray Cos. Levinson’s appointment lets Tim Cook concentrate on being CEO without the added responsibility of being chairman, he said.
“They’re trying to shore up the Disney relationship or strengthen that relationship because it’s an important part of where Apple is going,” Munster said.
Apple may introduce a TV set by 2013, Munster said. The device would be easier to use than Apple TV, the set-top box it now sells, he said. One possibility would be for the company to strike licensing deals that let customers buy only programs they want, a la carte, rather than multichannel packages from cable companies, he said. Disney owns ABC and ESPN.
“The content piece is the critical key to the living room,” Munster said.
Apple fell 1 percent to $384.77 at the close in New York today. The stock has advanced 19 percent this year.
Audit Committee Seat
Iger will sit on Apple’s auditing committee, an assignment that may draw scrutiny because of the ties between Apple and Disney, said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. Federal regulations require that audit committee members have no substantial commercial ties with the company on whose board they sit, he said.
Apple gets a small portion of sales from distributing movies, music and TV. Disney has been an important partner in pushing media companies to make content available in Apple’s iTunes store. When Apple added video fare to iTunes, Disney was the first major studio to sign on.
“I’m a little surprised that they would put Iger on the audit committee,” Elson said.
Apple maintains so-called “arms-length” commercial ties with Disney, according to a January filing with the U.S. Securities and Exchange Commission. That meant that as a director at both companies, Jobs didn’t have a “material direct or indirect interest” in any of such dealings, Apple said then.
The same policies may apply to Iger.
Iger’s Apple board seat is a rarity for a Disney executive. No other executive sits on an outside board, according to Bloomberg data. Michael Eisner, Iger’s predecessor, sat on no boards while he was CEO, and the seat will be Iger’s first on an outside company. Disney said on Oct. 7 that Iger would add the chairman’s title next year.
“He is going to make an extraordinary addition to our already very strong board,” Apple’s Cook said of Iger. His role at Disney in generating content, spurring innovation, harnessing new technology and expanding into new markets help make Iger “a great fit for Apple.”
Levinson is chairman and former CEO of Genentech Inc., which is now owned by Roche Holding AG. (ROG)
“He has been our longest serving co-lead director, and his insight and leadership are incredibly valuable to Apple, our employees and our shareholders,” Cook said in the statement.
Jobs became Disney’s largest shareholder when that company bought Pixar, the animation studio he helped create. He passed away on Oct. 5.
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