But shareholders — including Disney company executives — will still see $1.5 billion in dividends this year, leading some to say that the company is putting profits above people. Because that $1.5 billion would, theoretically, pay employee wages for another three months.
Disney stops paying 100,000 workers, roughly half its workforce, even as it protects executive bonus schemes and a $1.5 billion dividend payment due in July. https://t.co/7yyGs7XGXG
— Lisa Abramowicz (@lisaabramowicz1) April 19, 2020
Disney’s top brass is poised to benefit greatly.
An in-depth look at the company’s compensation structure reveals that the CEO and other executives are entitled to annual equity bonuses based on their performance.
Bob Iger, the former chief executive of the entertainment giant, owns millions of dollars worth of Disney shares. Iger, who is now the chairman of Disney, received over $100 million in stock incentives in 2017 when he agreed to stay on as CEO. A year later, he got a one-time stock reward worth $26.3 million.
Disney rewards top executives based on the price of Disney’s stock. The execs that own Disney stocks (including executives) will be entitled to a payout of $0.88 per share.
Of course, this isn’t nearly the first time Disney has been accused of putting profits over people. Even as recently as last year, Abigail Disney called out the business that wears her family’s name for not doing right by Disneyland employees.
Should Taxpayers Bail Out Disney?
Of course, Disney is counting on government money to help pay for their furloughed employees.
The New York Times recently ran an op-ed piece asking if several travel-related businesses — including Disney — actually deserved to be bailed out by taxpayers, as they’ve spent enormous sums on money on stock buybacks.
During the past decade, flush with cash, most of the companies in line to get taxpayer money did not prepare for a downturn. Instead, they spent enormous sums on stock buybacks, which reward shareholders and increase executive pay.
One consequence of a bailout, depending on how it is structured, would be to save private capital from large losses on these loans — loans that were, in retrospect, much riskier than they appeared.
The economy needs help, and fast. Yet it is hard to escape the conclusion that the $2 trillion aid package validates and indeed further rewards the questionable practices of the last decade.
In fact, the Times article showed Disney is being one of the worst offenders of what they call “self-enriching practices.”
This is an unprecedented crisis for the company. It will be interesting to see if Disney changes course, or continues to — as some believe — put their shareholders and the financial interests of their executives above their workers who actually make the magic each and every day.
[Sources: FT.com, The New York Times]