Disney has confirmed that its top execs will take a pay cut during the coronavirus pandemic, with new CEO Bob Chapek and executive chairman Bob Iger taking the largest reduction.
In a memo sent to staff on Monday, Chapek said that he will reduce his salary by 50% while Iger will forego his US$3 million salary.
Chapek, formerly the president of Disney’s parks division, was set to receive a 2020 salary of US$2.5 million, with up to a further US$22.5 million in performance-related incentives.
Elsewhere at the company, executives at the VP level will see compensation reduced by 20% from April 5. SVPs will take a 25% pay reduction, with EVPs seeing their salaries drop by 35%.
With this being the first major test of Chapek’s mettle in the role, the CEO told staff: “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 his memo, he wrote: “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 US 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.”
Research firm Moffett Nathanson has estimated that between all of these, Disney will take a revenue hit of US$3.4 billion in 2020.
While it will do little to change the tide, Disney will hope that its ongoing expansion of DTC product Disney+ – which launched across Western Europe on March 24 – will bring some good news when it reports its financial results in May.
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25th May 2020