With the recent closures of the Disney parks, there have been several measures taken by the Walt Disney Company to maintain economic viability. One of those measures has been a major salary reduction for Disney executives.
This announcement came just last week, but it seems that all has not gone smoothly with the pay cuts.
It seems the terms of the amended company contracts failed to provide an end date to the salary reductions, among other things, prompting executives to push back against the cuts.
According to the Hollywood Reporter, Disney executives and senior leadership are in disagreement over some aspects of the salary reduction measures.
Execs Push Back on “Temporary” Salary Cuts
The main factor causing an issue is that the amended contracts use the word “temporary” when referencing the salary reduction, but provide no concrete end date. On top of that, the executives were given only two days to read over and sign the contracts.
According to Hollywood Reporter, “Sources say the amended contracts ‘are pretty much voluntary.’ However, the expectation is for executives to sign. If an exec 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.”
Some affected executives (those at vice president, senior vice president, and executive vice president levels had voluntary salary cuts) are upset that the decision to cut their salaries was made “unilaterally” and represents a decrease of 20-30%. In general, Disney VPs earn between $150,000 and $200,000 while an executive VP can have a salary of around $700,000.
How Do the 20th Century Fox Execs Fit Into All of This?
Another notable aspect of the discord comes right on the heels of the one year anniversary of the Disney/Fox merger. According to Deadline, when Disney acquired Fox, they inherited a large number of executives with loftier titles, compared to relatively conservative Disney. For instance, to Disney’s one CEO at the time (Iger), Fox had seven. These execs were fit into the mix at Disney, often retaining their higher titles while doing the same level of job as a lower-titled counterpart on the Disney side.
Fox execs came in with overall lower base salaries than their Disney counterparts as well. This means in light of the cutbacks, Fox execs could be faced with higher pay cuts due to title, with less comparable base pay than the original Disney execs.
But What About the Bobs?
While these executives aren’t the only ones taking a pay cut, they may feel the pinch more than their superiors. CEO Bob Chapek will be taking a 50% reduction to his base salary and Chairman Bob Iger is completely forgoing on his salary. Still, there are those arguing that the cuts are unfair, pointing out that a cut to Iger and Chapek’s BASE salaries isn’t as significant a hit to their overall total income.
Both senior leaders will make several millions of dollars in additional bonus compensation that may be untouched by the pay cuts. Last year alone, Bob Iger made a reported $44.7 million total, with only 3 million coming from his base salary. And Bob Chapek may be on track to earn $7 million or more in bonus payments that are separate from his base salary.
Where Do They Go From Here?
With experts believing that it could take at least 18 months for the impact to lessen on companies like Disney, the concern from executives can be boiled down to the fact that they don’t want to take pay cuts that last well over a year. Still, Disney’s Business Affairs Department seems unwilling to budge and it appears the decision will go on as planned.
What do you think about the executive salary reductions at Disney? Tell us in the comments!