On April 19, The Walt Disney Co. announced that it would stop paying 100,000 of its "cast members," the employees working at the Parks, Experiences, and Products division, after the coronavirus pandemic forced Disney's parks to close their gates. While the company will still provide healthcare bonuses, they encouraged staff to apply to federal support. Those working in Orlando, Florida, could be entitled to as little as $275 a week.
Now Abigail Disney, granddaughter of the company’s co-founder Roy Disney, is slamming the company for cutting the pay of workers while keeping quiet on paying bonuses to executives and dividend payments typically worth $1.5 billion to shareholders.
Bob Iger, the executive chairman, gave up the remainder of his $3m salary for this year, while Bob Chapek, who recently replaced Iger as chief executive, will forgo half his $2.5m base salary. Disney's protected incentive schemes, however, could still ensure that executives earn millions. Iger earned $65.6m in 2018 and $47m last year, while Chapek could potentially earn an annual bonus “of not less than 300 percent” of salary. Suspending cast member pay is expected to save Disney $500 million a month.
"OK, I've been holding my tongue on the theory that a pandemic is no time to be calling people out on anything other than failing us in a public health sense," Disney began. "I thought it might be a moment for peace and reconciliation. But I feel a thread coming on..."
"WHAT THE ACTUAL F***?????" Disney asked. "Look, dividends aren't ALL bad, given the number of fixed income folks who rely on them. But still 80% of shares are owned by the wealthiest 10%. So that excuse only goes so far. But the REAL outrage is, of course, those bonuses..."
"All 1.5 billion of them. 1.5 BILLION. That'd pay for three months salary to front line workers. And it's going to people who have already been collecting egregious bonuses for years." Disney then goes on to quote a Financial Times piece about the payments.
"This is why I was quiet in March when executives at the company made a big pr push to call attention to the fact that they were giving up a portion of their salaries for the year," Disney continued. "I told people to wait until we heard about the rest of the compensation package, since salary is a drop in the bucket to these guys."
"The real payday is in the rest of the package. By design because it is taxed differently. Shareholders have twice voted to rebuff the outrageous pay, so it's not just that common decency is being flouted here. Its the will of their allegedly all-important 'owners.' Iger's comp will still be 900 times median wage."
"But it gets worse," Disney continued. "The front line workers at the parks had to fight for years to get their pay bumped up to $15/hr and the pr folks touted that as incredible magnanimity on management's park, but if you know the back story, which I do, you would be horrified to know just how hard they made it for the people asking for that $15."
"The way they floated around congratulating themselves it was damn hard to take. If a frontline worker gets 40 hours a week(and that's a big if, since just like everyone else, Disney shaves away hours to keep folks from being full time) 52 weeks a year (again a big if, esp since they don't have paid sick days unless they get 40 hours, which, see above parenthetical statement) they pull down 31,200 per year. Sounds nice till you consider gas prices and the housing market in Orange County."
"It's weird to note, btw, that both Disney's, Land and World, are in Orange Counties, but anyway. So Iger's compensation for THIS YEAR will amount to 1,500x their pay. Chapek's, if he gets the full amount, is 300% of his 3 million base pay, or $9MM. 288x the front liners'."
"And 173x his median workers pay, plus another 15MM over the long term. What kind of person is comfortable with this??? If you have a shred of empathy in your body, if you care even a little about your employees, if you believe a word of your nice rhetoric about how, acc to Mr Chapek, 'Our ability to do good in the world starts with our cast members . . . who create magic every day. Our commitment to them will always be our top priority.' If even a whiff of this is sincere, none of this compensation bullshit is possible."
Disney goes on to conclude: "THIS COMPANY MUST DO BETTER. Disney faces a rough couple of years, to be sure. The challenges are existential, even. But that does not constitute permission to continue pillaging and rampaging by management."
The heiress went on to slam Disney for stock buybacks, a practice which many companies participated in while stocks were booming: "In fact, if a bonus reflects performance, we might want to claw back some of those millions given how they've managed cash. Between March 31, 2018 and June 30 of 2019 the company made $11.5 billion of stock buybacks. ELEVEN. POINT. FIVE. BILLION. Now no one could have foreseen this crisis. That is an absolutely fair thing to say."
Disney says that instead of stock buybacks, which tend to benefit shareholders, the company should have invested the money or saved it for a rain day.
"But ANYONE, could have anticipated SOME crisis," Disney states. "That's one of the things responsible managers do. And good, solid, competent management is why they get the 'big bucks' we are told. But those buybacks are beginning to look pretty self indulgent right now and whom do buybacks enrich? Well, shareholders, and again, that's great for people on fixed incomes, sure, but who gains the most? Well if you are being compensated in shares and you drive the price up in buybacks that works out really nicely for you, doesn't it?"
She adds: "And therein lies another piece of terrible management, worse even the buy backs and the compensation. They have consistently tried to PR their way through a series of messes of their own making, and that will only last for so long."
"I don't have a role at the company, which is fine with me," Disney states. "I'm just a citizen who cares and I think that makes me free to say what I believe. But I am an heir. And I do carry this name with me everywhere. And I have a conscience which makes it very difficult for me to sit by when I see abuses taking place with that name attached to them. This isn't all that hard. This isn't all that complicated. Just give up SOME of your already ample compensation, especially this year. Give up, god forbid two or three basis points on the annual return."
"Analysts will shout and scream and have little temper tantrums," Disney finished up by saying. "Who cares. You are bigger than they are. And as the biggest, most exceptional, most iconic guy in town, you could CHOOSE TO LEAD. If you do, who knows who would follow you. We have a moment here. A crisis is always an opportunity for change. Reassess this mess you've made of the goodwill you got handed on which you depend more than you like to admit. And pay the people who make the magic happen with respect and dignity they have more than earned from you. BE DECENT."
Hopefully Disney workers will get some kind of help to cover the cost of bills and rent.