Bob Iger will step down as Disney CEO and assume the role of executive chairman, Disney announced Tuesday. Bob Chapek, who most recently served as chairman of Disney parks, experiences and products, will assume the role of CEO, effective immediately, Disney announced. Chapek will continue to report to Iger and be appointed to the board of directors at a later date. Shares of Disney fell about 2.5% after hours. In an interview with CNBC's Julia Boorstin after Disney's announcement, Iger said the CEO reporting structure is a way to ensure a smooth transition. "We're not concerned at all about creating any confusion," Iger said of the arrangement. Iger will remain executive chairman of Disney through the end of 2021, according to the company. Iger had been planning his succession for a while, saying at Disney's investor day last year that "2021 will be the time for me to finally step down." Iger has been CEO of Disney since 2005. He's pushed back his retirement several times in recent years, and Tuesday's succession announcement came as a surprise.

On a call with investors shortly after the announcement, Iger addressed the timing of his announcement, which happened 22 months before he was expected to retire at the end of 2021. Iger said he decided to step down now because he wanted to focus on the creative side now that major projects like the Fox merger and launch of Disney+ were behind him. Iger said he would be able to help transition Chapek into the role while serving as executive chairman. "With everything else falling into place, the time seemed right," Iger said. Iger has been instrumental in making Disney a media powerhouse with key acquisitions and content plays. He launched Disney+, immediately making Disney a popular streaming service provider. Disney said the service had 26.5 million paying subscribers during the first quarter of 2020 after launching in November.

Bob Chapek, chairman of Walt Disney Parks and Experiences, stands for a photograph at an unveiling event of Star Wars: Galaxy's Edge at Walt Disney Co.'s Disneyland theme park in Anaheim, California, U.S., on Wednesday, May 29, 2019. Patrick T. Fallon | Bloomberg | Getty Images