Bob Chapek, a 27-year Disney veteran who heads the company’s parks division, has been named CEO of Disney, succeeding Bob Iger. The timing of the news and the selection of Chapek came as a big surprise on Tuesday afternoon to many in the entertainment industry.

Iger will continue as Disney chairman through the end of his contract on Dec. 31, 2021. Disney said Iger would continue to lead the company’s creative endeavors. Chapek takes the helm as CEO as of today. Chapek’s contract runs through Feb. 28, 2023. He will join the board of directors at a later date, Disney said.

“With the successful launch of Disney’s direct-to-consumer businesses and the integration of Twenty-First Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” Iger said in a statement. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”

On the investor call following the announcement, Iger nodded toward the increasingly large and complex company that Disney has become, but said it was the right time to start handing over the reins.

“I felt that with the asset base in place and with our strategy essentially deployed, that I should be spending as much time as possible on, basically, the creative side of our businesses,” he told analysts. “Because with the asset base in place and the strategy in place that becomes the biggest priority. And in thinking about what I want to accomplish before I leave the company at the end of ’21, getting everything right creatively would be the No. 1 goal… It was really that simple. It was not accelerated for any particular reason other than we felt the need was now to make this change.”

The question of who would succeed Iger has been a top topic of speculation in industry circles as well as the broader business arena for several years. Chapek has long been seen as a contender for the job, given his varied experience and long tenure with Disney, but other Disney executives were seen as having a better shot because of their proximity to high-priority assets for the company.

“I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees,” Chapek said. “Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team. I share his commitment to creative excellence, technological innovation and international expansion, and I will continue to embrace these same strategic pillars going forward. Everything we have achieved thus far serves as a solid foundation for further creative storytelling, bold innovation and thoughtful risk-taking.”

Chapek has headed Disney’s theme park division since 2015. In 2018, he was upped to chairman of parks, experiences and products. Before that, Chapek held a range of senior management positions, running consumer products, film distribution and home entertainment at various times. Disney cited Chapek’s success in launching Shanghai Disney Resort and “Star Wars”-themed lands in domestic parks as examples of the skill that won him the promotion to CEO.

Chapek has taken on the formidable task of following the Babe Ruth of media executives. Iger has vastly expanded the size and scope of Disney during his 15 years as CEO, notably with the acquisition last year of 21st Century Fox. The successful launch in November of the Disney Plus streaming service cemented Iger’s legacy as a bold and innovative leader.

Iger noted that Chapek will be only the seventh chief executive to head the company since its founding in 1923.

“Throughout his career, Bob has led with integrity and conviction, always respecting Disney’s rich legacy while at the same time taking smart, innovative risks for the future,” Iger said. “His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio.”

Chapek will report to Iger and the Disney board. Susan Arnold, Disney’s lead independent board member, said the board’s decision to promote Chapek to the top job was unanimous.

“Mr. Chapek has shown outstanding leadership and a proven ability to deliver strong results across a wide array of businesses, and his tremendous understanding of the breadth and depth of the Company and appreciation for the special connection between Disney and its consumers makes him the perfect choice as the next CEO,” Arnold said.

Arnold also had words of praise for Iger, who she called “one of the world’s most esteemed and successful business leaders.” She credited Iger with having “transformed The Walt Disney Company, building on the Company’s history of great storytelling with the acquisitions of Pixar, Marvel, Lucasfilm and Twenty-First Century Fox and increasing the Company’s market capitalization fivefold. Disney has reached unparalleled financial and creative heights thanks to Mr. Iger’s strong leadership and clear strategic vision. We believe Mr. Chapek’s leadership and commitment to this strategy will ensure that the Company continues to create significant value for our shareholders in the years ahead.”

Before Chapek joined Disney in 1993, he worked for H.J. Heinz and in advertising for J. Walter Thompson.

Following the news, shares of Disney fell more than 2% in after-hours trading, though the stock pared some of its losses after the investor call came to a close. Shares plunged 3.6% during the regular session amid a broader selloff related to global fears surrounding the spread of coronavirus.

The timing of the Iger-Chapek announcement surprised Wall Streeters, who scrambled on Tuesday afternoon to analyze the shuffle.

“Overall, while management change was expected for some time, we believe the announcement today is likely to raise a number of questions,” wrote Barclays analyst Kannan Venkateshwar in a note Tuesday. “Given the launch of streaming just last quarter and a new CEO, it remains to be seen if Disney adjusts its outlook in any way as well as any further changes to the management team that could be announced as a part of this transition.”

(Pictured: Bob Iger, Bob Chapek)

Elaine Low contributed to this report.