The Walt Disney Firm has shared government compensation packages for present CEO Bob Iger, in addition to the CFO and others within the present c-suite. This publish takes a have a look at these numbers, Disney’s rationalization for the salaries & bonuses, in addition to the newest on the succession planning course of and the annual shareholder’s assembly.
It’s now been over two years since Bob Iger reentered the constructing as CEO of the Walt Disney Firm, after the Board of Administrators pulled off a traditional Bob Swap™️, changing Chapek with as soon as former and now present CEO Bob Iger. The sequence of occasions culminating in that pivotal second remains to be being pieced collectively, as a part of our one way or the other still-ongoing Battle of the Bobs collection. A minimum of one e-book on the topic is prone to be launched this 12 months. We are able to’t wait.
In his letter to shareholders, Iger mentioned how Disney has emerged from a interval of appreciable challenges effectively positioned for progress and optimistic concerning the future. He touted how Disney had “reinvigorated our movie studios, that are working with renewed inventive energy.” Disney ranked primary on the world field workplace in 2024 with a $5.46 billion slate (the primary time any studio eclipsed $5 billion since 2019) that included Inside Out 2 and Deadpool & Wolverine, each of which set information. Disney additionally carried out effectively in TV, profitable quite a lot of accolades, together with a record-breaking 60 Emmy Awards. Disney+ additionally continues to develop, with greater than 120 million subscribers and profitability for the primary time ever.
In fact, you’re in all probability right here for Parks & Resorts, so right here’s what Iger stated about that enterprise section in his letter:
Our Experiences companies stay the gold customary for the business, and we’re assured within the section’s long-term prospects and dedicated to investing to drive continued long-term progress. Our footprint continues to develop with a number of tasks and expansions presently underway at our parks all over the world. We’re additionally increasing Disney Cruise Line, permitting us to deliver our most beloved IP into markets the place we don’t have theme parks. This previous 12 months we debuted a brand new island vacation spot — Lighthouse Level — and we just lately launched our newest ship — the Disney Treasure — in December. As well as, our collaboration with Epic Video games will deliver collectively Disney’s beloved manufacturers and franchises in a transformational new video games and leisure universe.
Maybe what’s extra noteworthy here’s what was not stated. No point out of Walt Disney World, Disneyland–or any theme park by title. It wasn’t precisely a protracted letter, however ESPN was known as out a number of occasions. It’s not stunning that theme parks wouldn’t be touted, as nothing main opened on the ones that Disney owns final 12 months (Fantasy Springs will not be Disney-owned) and nothing is on faucet for 2025 or 2026.
It feels just like the parks are going to tread water for the following couple of years, with nothing to drive progress besides the speculation {that a} “rising tide lifts all ships” and maybe perhaps discovering methods to chop prices and improve income. Most likely not precisely what theme park followers wish to see occur. We’re nonetheless hopeful that Walt Disney World has some leisure surprises up its sleeves for the following two years, however it’s equally prone to be a time of rising pains.
Turning to government compensation, CEO Bob Iger noticed his complete compensation bundle surge in 2024 to a staggering $41.1 million, up from “solely” $31.6 million within the earlier 12 months. For no matter it’s price, that’s nonetheless down from $45.9 million in fiscal 2021, his final full 12 months of employment on the firm earlier than returning to the helm final 12 months shortly after the brand new fiscal 12 months started. So I assume perhaps Bob’s a discount even at a cool $41 million?
Iger’s compensation is weighted in direction of performance-based incentives, with solely $1 million of the overall accounted for by his base wage (up from $865,385 within the earlier 12 months). About $18.3 million of his pay got here within the type of inventory awards, $12 million was stock-option awards, $7.2 million in non-equity incentive plan compensation, and $2.1 million in different compensation, in line with the corporate’s proxy assertion filed with the SEC.
Per that very same SEC submitting, inventory awards are topic to efficiency situations which might be valued primarily based on the likelihood that such targets will likely be achieved. Assuming, as an alternative, that the best degree of efficiency situations are achieved by the Walt Disney Firm’s inventory, Iger’s inventory award for fiscal 2024 might be price as a lot as $31.8 million–simply the inventory award–for a complete of over $50 million.
The purpose, although, is that Iger’s compensation might differ and is extra performance-based now than it was up to now. That is frequent of media executives, and why there have been loopy headlines about Warner Bros CEO David Zaslav making $250 million per 12 months. He doesn’t really; that’s his most compensation if he hits inventory efficiency targets.
Zaslav gained’t accomplish that as a result of he sucks and there’s no method he’s going to greater than triple the present share worth, which is what can be wanted to earn ~$200 million of his theoretical pay. This isn’t to defend the $50 million Zaslav really makes–he isn’t price even that–however quite, to defend correct reporting.
Disney’s SEC Proxy Assertion additionally signifies that CFO Hugh Johnston made $24.5 million final 12 months (a big improve over his predecessors); Basic Counsel Horacio Gutierrez earned $15.8 million; HR head Sonia Coleman earned $7.6 million; and comms chief Kristina Schake earned $6.4 million. The entire senior c-suite noticed pay raises.
In accordance with SEC guidelines, Disney supplies the ratio of the annual complete compensation of its Chief Govt Officer to the annual complete compensation of Disney’s median worker. The ratio is an inexpensive estimate calculated in a fashion in line with SEC guidelines and the methodology described under.
To find out this, Disney opinions the annual base wage of the worldwide workforce. Because of inhabitants dimension, the corporate identifies a band of staff with a base wage that approximates the median base wage amongst staff. The corporate calculates the median worker’s complete annual compensation for fiscal 2024 (base wage, additional time pay, and the corporate’s contribution to medical health insurance premiums), and the median worker’s compensation didn’t comprise distortive compensation options.
The median Disney worker works in a full-time hourly position in parks and has been with the Firm for over seven years. For fiscal 2024, the median worker’s complete annual compensation was $55,111. Bob Iger’s complete annual compensation was $41,122,670. The ratio of those quantities was 746:1. (That’s up from the earlier 12 months, when the ratio was 595:1.)
That ratio is all the time eye-popping. That is in all probability going to be an unpopular opinion, however I don’t essentially have an issue with excessive compensation when the exec is clearly chargeable for success. When former Disney CEO Michael Eisner exercised inventory choices price $565 million within the late Nineteen Nineties, he was arguably price each penny after turning the troubled firm round and constructing it into an leisure behemoth. (Would Disney even exist at present however for Michael Eisner and Frank Wells?!)
It’s truthful to say that the corporate had a great 2024–or at the least a greater 12 months than 2023 or 2022, which was a reasonably low bar. On the similar time, it additionally feels just like the turnaround course of is simply getting began. Not solely that, however that Iger is fixing issues of his personal creation with streaming, ESPN, and even the output on the studios. (I’d prefer to assume that creativity is again on the fore in filmmaking, however I’d be extra reassured if all the highest performers weren’t all sequels.)
At this level, issues are going higher however the future remains to be unsure for Disney. There are large query marks about linear tv, ESPN, streaming, debt, and extra. No matter progress happens with the theme parks gained’t be an natural improve in demand, and even the 5-year plan is unsure.
Provided that, I have a look at these median (and under!) Parks & Resorts staff, particularly the frontline Forged Members, and might’t assist however assume that they have been those who have been the difference-makers. As soon as once more, Parks & Resorts has stored chugging alongside and had a report fiscal 12 months, even with nothing new opening. Forged Members on the frontlines, are doing the exhausting work and heavy lifting to make magical recollections and preserve folks coming to the parks.
This weblog has repeatedly advocated for larger pay for Forged Members. Once more, this isn’t a matter of making an attempt to attain simple factors. It’s egocentric. High quality Forged Members who’re handled proper, really feel valued, and are loyal to the corporate are a great factor for me, as a visitor who can see and really feel a distinction when Disney takes care of its folks. Forged Members are the difference-makers, and the corporate investing in them is simply good enterprise.
I virtually ranted about this in response to the information that Disney Cruise Line is rising really helpful gratuities, however the topic of tipping is so fraught that it appeared prone to be misinterpreted. (Off-topic, however I don’t assume companies needs to be offloading compensation choices to prospects, particularly ones with clientele in a variety of nations with totally different cultural norms round tipping. Simply pay DCL Crew Members extra. They honestly are the gold customary of service!)
As we hear extra complaints from readers about Forged Members, larger pay is the very apparent (at the least, to me) reply. Firms don’t appeal to and retain high expertise with out aggressive wages. There are lots of people who wish to work to make the magic for friends and are keen to simply accept much less to do it, however that’s not the norm.
There’s a singular purpose why Disney has needed to decrease its hiring requirements, and that’s pay. To be clear, Forged Members are principally superlative–however to no matter extent you may assume they’re not as pleasant, educated, or no matter as they have been in 2019 or earlier, the solutions to which might be morale and cash (with a straight line between the latter and former).
A little bit of an apart, however this can be a big a part of why I like In-N-Out Burger and Buc-ee’s. The household and people who personal these corporations are rich. Good for them–they in all probability deserve it. Not simply because they run nice companies, however as a result of they maintain their folks and that’s instantly evident within the buyer expertise. It’s an ‘all people wins’ state of affairs–what’s to not love?!
Turning to succession planning, Chairman of the Board James P. Gorman had this to say in his letter to shareholders:
As we communicated all year long, the Board stays actively engaged within the high-priority work of administration succession planning. As Chair of the Succession Planning Committee, I’m centered on managing our succession course of, and we now have continued to make robust progress during the last 12 months. In response to shareholder suggestions, I used to be happy to share an replace on our anticipated timing to announce a CEO successor in early 2026. The total Board is engaged in and dedicated to discovering the correct chief for the Firm and we’re planning for a easy management transition that may allow Disney’s continued success.
The Board additionally stays centered on efficient Firm oversight, which incorporates common analysis and planning to take care of acceptable Board illustration throughout a broad and related set of expertise and experiences. 5 non-management Administrators, together with myself, have joined the Board since 2021, bringing extra views and experience to this already high-quality Board. We’ll proceed to hunt robust alignment of our Board’s expertise, views and backgrounds to supervise Disney’s strategic priorities.
To be utterly clear, I additionally (nonetheless) assume it’s a good factor that Bob Iger will proceed to function Chief Govt Officer by means of December 31, 2026 and that the corporate will announce his successor in early 2026. He wants the runway for succession planning and to show issues round, and is finest located at making that occurs from the angle of expertise and experience. The just about year-long window between anointing the chosen one and having them take the helm might be savvy, as long as Iger doesn’t get second (third? fourth? fifteenth?) ideas about leaving.
With regards to the lengthy tail of succession planning, it’s in all probability additionally price mentioning the management shake-up at Parks & Resorts that simply occurred, with Disneyland, Disney Cruise Line, and Shanghai Disneyland all getting new presidents. This very effectively might be setting the desk for Josh D’Amaro’s inevitable departure–both to the CEO seat or outdoors the corporate if he’s handed over for a promotion–from the Experiences Chairman position. It’ll be attention-grabbing to see a front-runner emerge for that as a result of, from the skin trying in, nobody has actually carried out something to impress.
Maybe we’ll be taught extra throughout the 2025 Annual Assembly of Shareholders of The Walt Disney Firm, which will likely be held nearly at
www.virtualshareholdermeeting.com/DIS2025. That assembly will happen on Thursday, March 20, 2025 at 10 a.m. Pacific.
Lastly, for somebody who’s clearly fixated on his legacy, I’m considerably shocked Bob Iger has such a excessive compensation bundle. It might look like sooner or later, he’d have more cash than he can ever spend, and may wish to contemplate the optimistic optics of being paid much less. Take a $1 wage–or take his precise wage however donate all of it to some Disney-adjacent charity if he needs the tax break–and say you’re doing it for love of the sport and to make sure that Disney has a robust basis and is left in succesful arms.
If Bob Iger needs to cement his standing because the one who rebuilt Disney, that is likely to be the savvy transfer. Or maybe not. Perhaps Iger realizes that followers will deal with his wage for a day or two, however overlook it inside per week irrespective of if it’s $1 or $100 million. Those who dislike him will simply discover a totally different purpose to take action, and people who love him will likewise be followers regardless. I don’t know. He’s loads smarter than me, so he’s in all probability thought of this from each angle.
Want Disney journey planning ideas and complete recommendation? Make certain to learn 2024 Disney Parks Trip Planning Guides, the place you could find complete guides to Walt Disney World, Disneyland, and past! For Disney updates, low cost data, free downloads of our eBooks and wallpapers, and far more, join our FREE electronic mail e-newsletter!
YOUR THOUGHTS
What are your ideas on Bob Iger’s fiscal 2024 compensation and severance? Suppose he’s “price” 746x the common Parks & Resorts Forged Member? Do you agree or disagree with our evaluation? Any questions we may help you reply? Listening to your suggestions–even whenever you disagree with us–is each attention-grabbing to us and useful to different readers, so please share your ideas under within the feedback!
