On October 13th, Senator Elizabeth Warren wrote a letter addressed to Disney CEO Bob Chapek, and Chairman of the Board Bob Iger. In her letter she succinctly laid out her position and supported it up with cited articles and quotes.
In her letter she expresses her concern about the 28,000 cast members that would be laid off and asked about their history of stock buy backs, executive compensation, and more.
Here’s an excerpt from her letter:
“Dear Mr. Iger and Mr. Chapek:
I write to express concern about The Walt Disney Company’s (Disney) recent decision to lay off 28,000 workers during an economic recession while reinstating pay rates for highly compensated senior executives. In the years leading up to the crisis, your company prioritized the enrichment of executives and stockholders through hefty compensation packages, and billions of dollars’ worth of dividend payments and stock buybacks, all of which weakened Disney’s financial cushion and ability to retain and pay it’s front-line workers amid the pandemic. While I appreciate that your company has continued to provide health-care benefits to furloughed workers for the past six months, thousands of laid off employees will now have to worry about how to keep food on the table as executives begin receiving hefty paychecks again. I would like the know whether Disney’s financial decisions have impacted the company’s decision to lay off workers and whether your company plans to extend health care or other critical benefits and protections to laid off employees. ”
She doesn’t even mention the overpayment for Fox, the mismanagement of some of their franchises like Star Wars, or the constant, expensive, expansion projects.
When the letter came out Disney blew it off, answered nothing, and then lobbied for California to let Disneyland reopen.
Now Bob Chapek has responded to Warren in a letter.
According to CNN Business, here’s what was said:
“As you are well aware, this unprecedented crisis has had a devastating impact on companies nationwide, and businesses large and small have had to take the difficult steps required to weather the impact….”
Warren fired back yesterday with:
Bob Chapek had announced that the company was restructuring the day before Warrens letter. In his interview with CNBC he flat out said “shareholder wealth” was a priority:
“Well what we want to do Julia is to accelerate our transition to a real direct-to-consumer priority company. Uh, we believe that we’ve got the opportunity to build upon the success of Disney+, which by almost any measure has been far and above anybody’s expectations, and really use this to catalyze our growth and increase share holder wealth.”
JUST IN: Disney announces a major reorganization, as streaming becomes the most important facet of the company’s business. “We believe that we’ve got the opportunity to build upon the success of Disney+,” CEO Bob Chapek tells @JBoorstin. https://t.co/fE1Gzo4hol pic.twitter.com/uxJw0Q5Y9z
— CNBC (@CNBC) October 12, 2020
Executives were given back their full pays right before the layoffs were announced. Disney significantly overspent on Fox. They’ve cause fan division and damage to the ‘Star Wars’ brand and led to lower demand than expected for the expansion and toy sales. They kept raising prices on the parks and priced some of their core audience out, etc. There a lot of questionable actions done by Disney that have contributed to their financial situation right now. Again, they could not have foreseen it, but now their short sightedness means many are out of work and the company was even asking the government for bailouts themselves.
They don’t owe people jobs or help, but for a company that sells itself as a place about “family” and “community” it really isn’t a good look.
What do you think? Comment and let us know!
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