Disney CEO Makes $30 Million, Lays Off Hundreds

I'm certainly not a financial analyst, but let's see if we can't connect some dots here. Robert Iger, the CEO of Disney, re-upped with the company in January of 2008. At the time, the five year deal included a stock option offer to buy 3 million shares of Disney stock at $29.51, part of an overall options package Iger agreed to, which totaled $34.4 million. The CEO's salary for 2008 was a reasonable $2 million, although his performance bonus was up a touch, to $13.9 million (from $13.7 in 2007). Yowzers. Adding in other compensation, his 2008 earnings were just north of $30 million. Not bad. But the stock has fallen to 21 in the past 12 months, so Iger can't cash in his options until they hit the strike price again. There's little doubt that will happen; Disney has always done well on Wall Street. Still, it's an 11% jump from his 2007 income, and while revenue was up in 2008, profits were down about 5% over at the House of Mouse. Late last week, Disney's TV divisions, including ABC, ESPN, and SoapNet, cut 400 jobs due to the troubled economy. "After months of making hard decisions across our businesses to help us adjust to a weakening economy," said TV president Anne Sweeney, "we're now faced with the harsh reality of having to eliminate jobs in some areas." In "some areas," yes. What infuriates me is the performance bonus of $14 million, which would sure pay a few of those salaries Disney just slashed. But that's not the end of Disney's cuts. Some 600 executives in the theme park and resort divisions have been offered buyouts, and they have until Friday, February 6th to take the money and run or hope they make it through the next parade of layoffs. But wait, there's more: The Los Angeles Times reports that ABC has recently merged its network and TV production arms, meaning some redundancies will be eliminated there, as well. The number of jobs lost isn't terribly surprising; nearly every major media group has dropped hundreds of employees over the past few months, a direct result of slumping advertising revenue. But should an executive who's presiding over the losses make $14 million as a performance bonus?

Comments

[knives]

That just makes me angry. He doesn't sweat for the company. It's not built on his blood. He could definitely afford to give up a few million to save jobs.

[Lisa]

I love Disney, but this makes me mad. I'm still mad at them for dropping VODT. At least Fox picked it up!

[john Hoffman]

I should have become a soulless film executive instead of an animation grunt.

[Nikolai]

What I don't understand is the astounding rate of pay of many of these CEOs! I don't blame the CEOs, I would take the money too, but how and why do these corporations figure the amounts of these astronomical salaries and bonuses?

I thought the idea of a corporation was to plow the money back into the business while making a decent (not decadent) salary, and then for GOOD performance possibly issuing a reasonable bonus as well.

Again, I just don't get it. I guess they must move in an alternate universe.

[TED]

recent studies have shown that the actual value of a CEO is overrated. Also, the egos that most of these man have mean they would work at lower rates as long as the perks and power were in place.

[CH]

My husband was part of the layoffs, totally out of the blue and it's really messed our lives up. We risked leaving our own country, where his industry wasn't doing too well, to be able to move somewhere more stable at a company we thought very stable just so that our son could start elementary school and be able to stay there without moving every two years as we've had to before he turned five. Now he's 6 1/2 and we have to move him again. He has a large group of friends, his birthday in just a few months and that's not the worst of it. We have a dog who is nearly 10 and the country we have to go back to is the UK where they still have quarantine laws so we have to choose to risk his life flying him at all, if he does fly does he go now and endure the 6 month quarantine or be left here with friends for 6 months instead whilst his blood test for the PET passport comes through ? Or find him a new home when we've had him since he was 3 months old.
I guess you could read this and say Well, you chose that risk by moving somewhere far from home and you'd be right. We chose this with our eyes wide open, knowing we'd have to get residency whilst living over there. We should have had our residency by now, we're only a few months off getting it, but Disney didn't have a decent HR department at the company he was at which stalled our application for almost an entire year leaving us with no legal right to be here without work.
So reading about this guy makes me so mad knowing that the decisions of his company leave us having to make decisions that are ripping us apart. This is just one person and his family perhaps sitting on money that could pay those salaries probably ten times over and here we are having to sell half our possessions to be able to pay for our move back to the UK, ripping our son away from his friends and leaving our pet in the hands of relative strangers where we may never see him again. I have no words left........

[Mark]

"... This is just one person and his family perhaps sitting on money..."

Sadly, there is no "perhaps" to it. That man (I use the term loosely) is very truly sitting on piles and piles of money, to the point that his children and grandchildren have the real choice of never working a single day in their lives (as long as they stay in Daddy's good graces and get some inheritance). The company suffered this year, yet he thought nothing of taking a _bonus_ for his poor performance, a bonus which would easily cover the salaries of hundreds of laid off employees.

[Get The Big Picture]

Oh, Iger turned down a bonus. Something in the $2 million range, on top of the money he already received. A Disney spokesman said Iger felt that was the "appropriate" course of action.