Disney has been hit hard by the current global health crisis. Currently, every Disney Park worldwide is closed, along with retail locations, movie theaters, and vacation properties. Movie releases have been delayed, production has stopped, and thousands of Disney employees and Cast Members are out of work.
While CEO Bob Chapek and Chairman Bob Iger have agreed to forgo the majority of their salary, other executives affected by the pay cuts have pushed back, citing the lack of a clear end date and skepticism over how much Iger and Chapek are really giving up.
According to The Hollywood Reporter, Disney’s executives, who make from $150,000 – $700,000 a year depending on their position, have been unilaterally given a 20 to 30 percent pay cut with no clear end date and little time to review the terms. While others have criticized these complaints during such tumultuous times, some have begun scrutinizing the sacrifices that Disney’s top executives have made, finding them not to be as impactful as once believed.
Chairman Iger elected to sacrifice 100% of his salary, while recently appointed CEO Chapek has given up 50% of his salary. According to the Hollywood Reporter, though, “the bulk of Iger and Chapek’s compensation will remain untouched because the cuts only apply to their base salaries.” For example, “in the case of Chapek, his base is $2.5 million, but his annual target bonus is $7.5 million and his annual long-term incentive grant is $15 million.”
Defenders of Iger and Chapek have countered by stating these bonuses are based on the company’s performance and stocks, which are certain to suffer in the current economic climate. Further more, both top executives have given up other perks, including car payments.
The current pay cuts don’t only affect Iger and Chapek, however. Sources for The Hollywood Reporter say that while the word “temporary” has been used to describe the cuts, they offer no defined end date. While the “amended contracts are ‘pretty much voluntary’…the expectation is for executives to sign.”
With so many aspects of the Walt Disney Company currently affected by the global health crisis, and with no definitive end date in place, we simply don’t know how long economic impacts due to the global health crisis will last. Experts claim the impact on the entertainment industry could last well into 2021, until a vaccine is completed and made widely available.
All Ears will continue to monitor this situation as it develops.
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