Walt Disney Co.’s board of directors on Wednesday elected John E. Pepper, Jr. the former chairman and chief executive of the Procter & Gamble Co., as chairman. He’ll replace former Senator George J. Mitchell, who is retiring.

Last December, when Mitchell made his intention to step down known, the board asked him to postpone and stand for re-election to facilitate an orderly succession process. Mitchell, who has served as Disney chairman since March 2004, will officially retire on Dec. 31. Pepper will take over on Jan. 1.

Pepper joined the Disney board in January, along with Orrin Smith, the former president and chief executive of Starbucks Coffee Co. Disney is hoping that Pepper will bring some of his expertise in brand-building, corporate management and identifying markets. At Proctor & Gamble, Pepper helped the company develop markets in Eastern and Central Europe and China.

“In John’s leadership of the board, Disney’s shareholders will benefit from his notable record of successes in leading and growing one of the world’s largest consumer products companies,” said Chief Executive Robert Iger, in a statement.

“Since joining the Disney board, John has quickly immersed himself in our business and shared his broad and deep expertise in corporate management, global brand building and leadership development,” Iger said.

The board also announced it was raising the company’s annual cash dividend by 12.5 percent over last year to 27 cents per share, payable to shareholders of record on Dec. 12, 2005.

Shares of Disney slipped 3 cents to close earlier at $29.38 on the New York Stock Exchange.