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 submit takes a take a look at these numbers, Disney’s clarification 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 by some means 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 will’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 in regards to the future. He touted how Disney had “reinvigorated our movie studios, that are working with renewed artistic 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 numerous 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 most likely right here for Parks & Resorts, so right here’s what Iger mentioned about that enterprise phase in his letter:
Our Experiences companies stay the gold commonplace for the trade, and we’re assured within the phase’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 at the moment underway at our parks around the globe. We’re additionally increasing Disney Cruise Line, permitting us to convey 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 convey 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 mentioned. No point out of Walt Disney World, Disneyland–or any theme park by identify. It wasn’t precisely a protracted letter, however ESPN was referred to as out a number of instances. It’s not shocking that theme parks wouldn’t be touted, as nothing main opened on the ones that Disney owns final 12 months (Fantasy Springs isn’t 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 idea {that a} “rising tide lifts all ships” and maybe possibly discovering methods to chop prices and enhance 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, but it surely’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 value, 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 suppose possibly Bob’s a cut price even at a cool $41 million?
Iger’s compensation is weighted in direction of performance-based incentives, with solely $1 million of the whole 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, based on the firm’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 might be achieved. Assuming, as an alternative, that the very best stage of efficiency situations are achieved by the Walt Disney Firm’s inventory, Iger’s inventory award for fiscal 2024 might be value 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 prior 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 received’t accomplish that as a result of he sucks and there’s no method he’s going to greater than triple the present share value, 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 value even that–however moderately, to defend correct reporting.
Disney’s SEC Proxy Assertion additionally signifies that CFO Hugh Johnston made $24.5 million final 12 months (a major enhance over his predecessors); Normal Counsel Horacio Gutierrez earned $15.8 million; HR head Sonia Coleman earned $7.6 million; and comms chief Kristina Schake earned $6.4 million. All the senior c-suite noticed pay raises.
In accordance with SEC guidelines, Disney gives the ratio of the annual complete compensation of its Chief Government Officer to the annual complete compensation of Disney’s median worker. The ratio is an affordable estimate calculated in a way in step with SEC guidelines and the methodology described beneath.
To find out this, Disney critiques the annual base wage of the worldwide workforce. As a result of inhabitants measurement, 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, extra 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 at all times eye-popping. That is most likely going to be an unpopular opinion, however I don’t essentially have an issue with excessive compensation when the exec is clearly accountable for success. When former Disney CEO Michael Eisner exercised inventory choices value $565 million within the late Nineteen Nineties, he was arguably value each penny after turning the troubled firm round and constructing it into an leisure behemoth. (Would Disney even exist right now however for Michael Eisner and Frank Wells?!)
It’s truthful to say that the corporate had 2024–or a minimum of 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 wish to suppose 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 massive query marks about linear tv, ESPN, streaming, debt, and extra. No matter progress happens with the theme parks received’t be an natural enhance in demand, and even the 5-year plan is unsure.
Provided that, I take a look at these median (and beneath!) Parks & Resorts staff, particularly the frontline Forged Members, and may’t assist however suppose that they had been those who had been the difference-makers. As soon as once more, Parks & Resorts has stored chugging alongside and had a document fiscal 12 months, even with nothing new opening. Forged Members on the frontlines, are doing the laborious work and heavy lifting to make magical recollections and preserve folks coming to the parks.
This weblog has repeatedly advocated for increased pay for Forged Members. Once more, this isn’t a matter of making an attempt to attain straightforward factors. It’s egocentric. High quality Forged Members who’re handled proper, really feel valued, and are loyal to the corporate are 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 nearly ranted about this in response to the information that Disney Cruise Line is rising advisable gratuities, however the topic of tipping is so fraught that it appeared prone to be misinterpreted. (Off-topic, however I don’t suppose companies needs to be offloading compensation selections to clients, particularly ones with clientele in a variety of nations with completely different cultural norms round tipping. Simply pay DCL Crew Members extra. They honestly are the gold commonplace of service!)
As we hear extra complaints from readers about Forged Members, increased pay is the very apparent (a minimum of, to me) reply. Firms don’t appeal to and retain prime expertise with out aggressive wages. There are lots of people who wish to work to make the magic for company and are keen to just accept much less to do it, however that’s not the norm.
There’s a singular cause why Disney has needed to decrease its hiring requirements, and that’s pay. To be clear, Forged Members are largely superlative–however to no matter extent you may suppose they’re not as pleasant, educated, or no matter as they had 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 it is a enormous a part of why I really like In-N-Out Burger and Buc-ee’s. The household and people who personal these firms are rich. Good for them–they most likely deserve it. Not simply because they run nice companies, however as a result of they deal with their folks and that’s instantly evident within the buyer expertise. It’s an ‘everyone 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 have now continued to make sturdy 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 complete Board is engaged in and dedicated to discovering the best chief for the Firm and we’re planning for a clean management transition that can allow Disney’s continued success.
The Board additionally stays centered on efficient Firm oversight, which incorporates common analysis and planning to take care of applicable 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 are going to proceed to hunt sturdy alignment of our Board’s expertise, views and backgrounds to supervise Disney’s strategic priorities.
To be fully clear, I additionally (nonetheless) suppose it’s a good factor that Bob Iger will proceed to function Chief Government 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.
In the case of the lengthy tail of succession planning, it’s most likely additionally value 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 exterior the corporate if he’s handed over for a promotion–from the Experiences Chairman position. It’ll be fascinating to see a front-runner emerge for that as a result of, from the surface trying in, nobody has actually accomplished something to impress.
Maybe we’ll be taught extra in the course of the 2025 Annual Assembly of Shareholders of The Walt Disney Firm, which might 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 stunned Bob Iger has such a excessive compensation bundle. It will appear to be sooner or later, he’d have more cash than he can ever spend, and may wish to think about 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 powerful basis and is left in succesful palms.
If Bob Iger needs to cement his standing because the one who rebuilt Disney, that may be the savvy transfer. Or maybe not. Perhaps Iger realizes that followers will give attention to his wage for a day or two, however overlook it inside per week regardless of if it’s $1 or $100 million. Those who dislike him will simply discover a completely different cause to take action, and those that love him will likewise be followers regardless. I don’t know. He’s rather a lot smarter than me, so he’s most likely thought-about this from each angle.
Want Disney journey planning suggestions and complete recommendation? Be certain that to learn 2024 Disney Parks Trip Planning Guides, the place you will discover complete guides to Walt Disney World, Disneyland, and past! For Disney updates, low cost info, free downloads of our eBooks and wallpapers, and rather more, join our FREE e mail e-newsletter!
YOUR THOUGHTS
What are your ideas on Bob Iger’s fiscal 2024 compensation and severance? Suppose he’s “value” 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 once you disagree with us–is each fascinating to us and useful to different readers, so please share your ideas beneath within the feedback!
