Disney reverses its plans on pay cuts for executives in the coronavirus shutdown. This has been a topic of conversation since the early days of the pandemic and it seems that the company is reversing course. Back in April, Disney slashed the salaries of vice president-level executives and those above them by 20%. Then, senior vice president pay got cut by about 25% and executive VPs got a 30% cut. This all went a long way to steady the waters after the initial uncertainty surrounding COVID-19. Disney makes a ton of its money off of theme parks, theater attractions, and cruises. So, the loss of all three branches of their business was enough to create substantial worry. Well, now those cuts are coming to an end according to a report from Variety.
An earlier statement from the company described the measures, "In light of this, we are going to be implementing a variety of necessary measures designed to better position us to weather these extraordinary challenges. Among them, we will be asking our senior executives to help shoulder the burden by taking a reduction in pay – effective April 5, all VPs will have their salaries reduced by 20%, SVPs by 25%, and EVPs and above by 30%. I will be taking a 50% reduction in my salary. This temporary action will remain in effect until we foresee a substantive recovery in our business. Our executive chairman, Bob Iger, has chosen to forgo 100% of his salary."
I broke some of that tension down for Comicbook.com earlier this summer when the move was first announced.
Bob Iger is acting Chairman of Disney and he's forgoing his entire salary this year. CEO Bob Chapek is slashing his own base pay by 50 percent to help out. To put it in perspective, the average Disney VP earns in the range of $150,000 to $200,000 in base pay. (Those are figures reported by THR) On the Executive VP level, things can go higher than $700,000 depending on which branch of the business they reside in. There is also the matter of the Disney stock options available to those at these lofty levels.
Some of the disgruntled VPs, senior VPs, and executive VPs argue that this isn't fair because Iger and Chapek still have other forms of compensation secured. Iger especially has netted $44.5 million in additional compensation because of company performance coming out of last year. All of that would remain intact while the $3 million base salary is what would go unpaid. Meanwhile, Chapek has $2.5 million in base salary. But, his annual target bonus is $7.5 million and there is an annual long-term incentive grant worth $15 million out there for him as well.
Have you begun planning a trip to Disney for next year yet? Let us know down in the comments!