Disney execs taking pay cuts, Iger to forgo salary, Chapek taking 50% cut

Top Walt Disney Co. execs will be taking pay cuts amid the coronavirus pandemic, with Executive Chairman Bob Iger forgoing his entire salary and CEO Bob Chapek taking a 50% cut.

The announcement comes a few days after Disney announced that Disneyland and Walt Disney World will remain closed until further notice due to the coronavirus pandemic.

In addition to Iger and Chapek taking cuts, starting April 5, all VPs will have their salaries reduced by 20%, SVPs by 25%, and EVPs and above by 30%.

This temporary action will remain in effect until the company foresees a substantive recovery in its business.

Not only are the U.S. theme parks closed, but so are all of the international parks, TV and film production, all releases of new films have been pushed back due to movie theaters being closed and ESPN has taken a huge hit with all college and professional sports, the Disney Cruise Line and Adventures By Disney has been sidelined, and all of the shopDisney brick and mortar stores have been closed.

In 2019, Iger’s compensation package totaled $48 million, largely in stock and bonuses tied to the company’s strong performance. Chapek had been in line to earn $2.5 million in salary plus bonuses of up to $22.5 million.

Last week Disney announced that it will pay its park hourly employees through April 18. Unions have asked that Disney keeps paying employees through the closure.

Here is the full memo sent out:

Dear Fellow Employee,

Our world is facing an unprecedented crisis that has fundamentally upended our lives, creating uncertainty and hardship – while, at the same time, spurring kindness and compassion. And although there are still many unknowns with respect to the impacts of COVID-19, our top priority remains your safety and well-being.

As we’ve seen, the coronavirus poses significant health risks and has exacted a grave toll on so many lives. As such, it’s more important than ever that all of us follow the guidance of health experts and take the necessary precautions, including continuing to work from home, wherever possible, and practicing social distancing. By doing so, we also help to protect our loved ones, neighbors, and friends.

This is a trying period for all of us and as we navigate these challenging times together and make adjustments in our daily lives, we’re grateful for everyone’s continued flexibility and understanding.

The pandemic is also having a devastating impact on the global and U.S. economies, and it’s hitting businesses like ours particularly hard. In a matter of weeks, we’ve experienced widespread disruption across our company, with our domestic parks and hotels closed indefinitely, our cruise line suspended, our film and TV production halted and theatrical distribution delayed both domestically and internationally, and our retail stores shut down. While I am confident we will get through this challenging period together and emerge even stronger, we must take necessary steps to manage the short- and long-term financial impact on our company.

In light of this, we are going to be implementing a variety of necessary measures designed to better position us to weather these extraordinary challenges. Among them, we will be asking our senior executives to help shoulder the burden by taking a reduction in pay – effective April 5, all VPs will have their salaries reduced by 20%, SVPs by 25%, and EVPs and above by 30%. I will be taking a 50% reduction in my salary. This temporary action will remain in effect until we foresee a substantive recovery in our business. Our executive chairman, Bob Iger, has chosen to forgo 100% of his salary.

As we navigate through these uncharted waters, we’re asking much of you and, as always, you are rising to the challenge and we appreciate your support. Your dedication and resilience during this difficult time are truly inspiring, and it gives me renewed confidence that we will come through this crisis even stronger than before, as we have so many times in our company’s history.

Please continue to take care of yourself and your loved ones, stay well, and know that we are here to support you.

Best,
Bob