In a statement issued Thursday, board member Orin Smith called Iger "the architect of Disney's success."
The 63-year-old Iger was named as the company's CEO in 2005. Disney acquired Pixar, Marvel and Lucasfilm during his tenure, expanding its status as an entertainment and media empire. Disney also owns ABC and ESPN.
Disney's market capitalization grew from $48.4 billion in 2005 to $150 billion since Iger became CEO.
Disney says Iger's compensation will remain the same and he will be able to earn a performance-based retention bonus if the company meets certain financial goals.
Disney shares slipped 48 cents to $87.01 in afternoon trading. Its shares have risen 34 per cent over the past year.