Disney has been in the news a lot lately. Due to the Coronavirus pandemic they’ve shut down parks, pushed movie releases back, took debt market loans, scheduled furloughs for later this month and even slashed executive pay. All to stave off the mountain of expenses with less and less income rolling in. Now those executives are asking questions.
According to the release VPs, SVPs, and EVPs and higher are to have their pay slashed from 20-30%. The higher up, the bigger the cut.
The Hollywood Reporter is reporting that some executives aren’t happy over the “unilateral” decision about the cuts and the amended contracts that don’t provide an end date for the cuts. Plus they were only give two days to agree and sign.
Of course they don’t have to voluntarily agree but as THR points out that their sources have indicate “If an executive doesn’t sign, he or she is taking a risk with regard to future career mobility within the studio and the prospect of potential bonuses.”
Now, as THR points out, a typical Disney VP earns between $150k and $200k base pay, while other departments might make more. 20% would be a $30k to $40k reduction. Since it’s only applying to base pay someone like Bob Chapek isn’t going to take much of a hit in his 50% offering he would still get $1.25 million and that wouldn’t include “his annual target bonus is $7.5 million and his annual long-term incentive grant is $15 million.”
They also point out that Bob Iger is donating 100% of his salary, which at base was $3 million, but he actually earned $44.5 in “additional compensation” which is based on how well the company performs.
THR also stated they were told that “representatives who have pushed back on behalf of their executive clients have been met with a Disney business affairs department unwilling to negotiate.”
I guess one way to look at it is that they at least will have jobs and continue to have jobs. I don’t see anyone telling these executives that “it’s okay. You can apply for that extra $600 a week, like what was said to all the parks and resorts cast members that are going to be laid off later this month.
So many people are out of work and might not be brought back and these people are complaining because they have to take a pay cut to help pay for the people that are getting laid off or who are “essential” to keep things running.
A “Disney source” told THR “Much of the company has ground to a halt because of this pandemic, and for these people to complain in the face of so much suffering in the world is just incredibly selfish and sad.”
I kind of have to agree. I understand that the language isn’t such that it gives a set date to go back to full salary, however, the company is borrowing from the debt market to stay afloat and now they are apparently lobbying for part of the government bail out money too. Frankly, a lot of positions could be merged into others and streamlined for a leaner bottom line. I do think some of these pay cuts could end up being longer than temporary, but I also think that some of the jobs could also be eliminated. Maybe the pay cut isn’t so bad after all.
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