Will Bob Iger Repeat One Of His Regrets as Disney’s CEO?

Disney has been caught up in a number of battles lately.

From the issues surrounding the Company’s response to Florida’s Parental Rights in Education Bill (what critics called “Don’t Say Gay”) to legal battles surrounding Park Pass reservations, the dissolution of Disney World’s Reedy Creek Improvement District, and a proxy battle for a seat on the Company’s Board of Directors — Disney has been…busy. And now a recent battle regarding Cast Member pay is gaining national attention.

What’s Happening?

Here’s a quick recap of what’s been going on. Back in October of 2022, the contracts for various unionized Disney World Cast Members expired. So, Cast Member unions and Disney came to the drawing board to craft some updated terms — since that time, the negotiations have been ongoing.

The Disney World Cast Member unions have asked Disney to increase the minimum wage to $18 per hour. They’ve also asked that the pay of those who already make close to that amount be increased by $3 to keep up with inflation.

There was a rally over the wages, Disney issued a statement, and ultimately the negotiations resumed in January. Disney presented what they called a “strong and meaningful offer” back in December that would immediately increase starting wages for some roles (like bus drivers, housekeepers, and culinary) up to a minimum of $20 an hour. They also indicated that there would be a path to achieving $20 for all other full-time, non-tipped union roles within the contract term (basically, over a period of years).

According to the Orlando Business Journal, Disney’s contract offer also included the following (among some other things):

25% of the non-tipped roles for Cast Members within the Service Trades Council Union would see their wages increase to at least $20 per hour (within the first year of the contract)
Culinary workers would increase to $20 to $25 per hour (depending on the role)
There would be retroactive pay dating back to October 2022 — this would start at a minimum of $700 for Cast Members who work 40-hour weeks
A new 401(k) option would be implemented (along with a pension)
There would be 8 weeks of paid child-bonding paid for eligible workers

But, Cast Member unions have argued that the changes (which would come more gradually for some Cast Members with increases of reportedly $1 per year) would not be put in place quickly enough to address the inflation, increases in housing costs, and more impacting Cast Members immediately.

Ultimately, in February of 2023, Cast Members REJECTED Disney’s contract offer by a 96% margin. They then met with Disney again for negotiations on February 15th, and things took a turn.

Unite Here Local 362 indicated that Disney did NOT increase its wage proposal. Instead, they claimed that “Disney’s proposal…reduced retroactive pay for thousands of workers” and that it was “worse” than the company’s previous offer.” The union insisted that Disney “refused to add even one cent to its wage proposal.”

Though contract negotiations were supposed to last 2 days, union leaders indicated that they would NOT return to negotiate with Disney on the second day, essentially suspending the talks. They also noted that public actions would be announced soon to bring some Cast Member issues to light.

Statement on today’s bargaining with @WaltDisneyWorld management. #DisneyWorkersNeedaRaise pic.twitter.com/Hm6on3b5gF

— UNITE HERE! Local 362 (@UNITEHERE362) February 16, 2023

Disney Spokesperson Andrea Finger responded by saying, “We’ve provided the union with options that would set all non-tipped cast members on a path to $20 an hour and provide opportunities for immediate increases, and we look forward to continuing discussions.”

Disney also pointed out that they’ve provided a contract option that would accelerate wage increases for many Cast Members and bring all current non-tipped Cast Members up to at least $17 an hour. Disney also indicated that many wages would increase to $20 an hour during the first year.

So…what’s happening now?

What Others Are Saying

Well, it seems Disney’s battle isn’t staying in Orlando or even in Florida, as the matter has gained the attention of national news sources and senators from other states.

Senator Bernie Sanders commented on the matter on February 21st, tweeting a message to Disney saying “Pay your workers a living wage.” Bernie also commented on how much was provided to former CEO Bob Chapek and how that amount compared to the pay given to Disney Cast Members.

If Disney can afford to give a $20 million golden parachute last year to a CEO who did a lousy job, it can afford to pay Disney World Cast Members who are struggling to pay the rent & groceries a minimum wage of at least $18/hour. I say to Disney: Pay your workers a living wage.

— Bernie Sanders (@SenSanders) February 22, 2023

Earlier in 2023, we shared a full post about just how much Bob Chapek made in 2022. Chapek received a pay package of $24.18 million for his work in 2022 and the value of his severance package is worth over $20 million.

In a filing, Disney also revealed that one executive who quickly left the Company made over $8 MILLION in less than 4 months.

But it’s not just Sanders who has commented on the issue. In a post on The Street, Editor at large of The Arena Group, Daniel Kline, opined that “Disney’s offer would put a single worker well below the cost of living while the union’s counter-offer would not get single employees to that level.” Kline continued, “Asking for wages that come close to (or slightly exceed) the cost of living in an area where costs have been steadily rising does not seem like the union pushing the company too far.”

Kline arguesthat the COVID-19 pandemic has changed the demand for housing in Florida as folks from New York and other locations flooded to various parts of the state. Though the intensity of the trend of increasing rent has “settled down a bit,” Kline insists that the “needle is still moving up.”

Kline notes that the trend has placed Disney World Cast Members in competition with various people for housing — from retirees to remote workers — and “Walt Disney needs to address this and take real steps to take care of its workers. That starts with paying a living wage.”

He continued by sharing, “A company can’t project an image of happiness and magic while forcing its workers to make choices between food and shelter. Nobody wants to think of Mickey Mouse or Cinderella sleeping in a car or going hungry.” While Orlando used to be a cheaper place to live, Kline insists that’s no longer true so Disney should “step up and take care of the people it asks to take care of millions of guests a year.”

When it comes to rent costs, Florida Atlantic University has some interesting data. Based on the January 2023 data, the national average rent cost is $1,970.24. But in Orlando, that average rent price is higher at $1,999.80. In terms of where the average rent “should be,” FAU places that at $1,863.32 for the national average and just a bit higher at $1,866.90 for Orlando.

Though month-over-month there has been a decrease in rent costs for both the national average and Orlando average, the FAU data still reveals that the year-over-year rent cost change for Orlando is 7.43%. That’s even BIGGER than the 6.90% change on a national scale.

And that’s not all, the story has also gotten picked up by national news sources, like CNN and The New York Times.

What Will Disney Do? And What Influence Might Bob Iger Have?

At this point, it’s unclear what steps Disney will take next and what influence Bob Iger could have on the situation, but this battle is interesting in light of some previous comments about wages he has made. In an interview with CNN+ back in 2022 (before Iger returned as CEO of the Walt Disney Company), Iger discussed various matters.

At one point, the interviewer (Chris Wallace) asked Iger about a documentary that had been co-directed by Abigail Disney. The documentary criticized the Walt Disney Company for “the wide disparity in pay between hourly theme park workers and Iger’s CEO compensation.”

Abigail Disney has long criticized the pay gap at Disney. The film she co-directed follows four Cast Members and documents their “struggle to make ends meet on what the park pays them” (SFGATE). Abigal Disney said that she “cannot see [Roy Disney] taking $66 million home for a year’s work in the same year when at the same company, people can’t afford food. I don’t see that happening.” The $66 million is in reference to Bob Iger’s 2018 salary.

Abigail Disney has said that “Disney is a long way from being the worst offender” when it comes to their treatment of employees. But she has indicated that since Disney is a leader in the business they have an “incredible redemptive capacity to lead other companies.”

When asked whether he had any misgivings about the salary disparity, Iger said, “I’ve never been defensive about what I made.” He insisted that his salary was typical of the compensation for CEOs of large media companies.

But, Iger did acknowledge some regret around not increasing the starting hourly wage of Disney Cast Members from $10 to $15 early on. He said, “We were being pushed to go to 15. There was some hesitation in that regard because of the cost associated with it. We should have done that right away.”

Now, however, faced with a push to move from $15 to $18, it seems Cast Member unions have faced a battle, despite Iger being back as the reigns as CEO again.

Universal Orlando, on the other hand, recently announced that it would be raising its starting pay to $17. That might further encourage (or push) Disney to feel like it must follow suit — potentially.