The Walt Disney Co. executive chairman Bob Iger will forgo his entire salary while newly-appointed CEO Bob Chapek will take a 50% pay cut in his basis salary as the company is trying to overcome the financial impact of the novel Coronavirus.
Chapek in an internal email has shared the information with the company employees on Monday. The email has been accessed by entertainment publication The Hollywood Reporter.
Iger, one of the highest paid executives in the media and entertainment industry, is encountering a steady decline in his pay package, which in the current fiscal has been $47.5 million, down from $65.6 million during the 1918 fiscal.
Chapek had joined as the Walt Disney Company as the CEO at an annual basic package of $2.5 million. The deal also included an annual target bonus of $7.5 million, and an annual long-term incentive grant of $15 million. However, his 50% pay cut will only be limited to $1.25 million.
“Effective April 5, all VPs will have their salaries reduced by 20%, SVPs by 25% and EVPs and above by 30%,” The Hollywood Reporter has reported from the mail.
“As we navigate through these uncharted waters, we’re asking much of you and, as always, you are rising to the challenge and we appreciate your support. Your dedication and resilience during this difficult time are truly inspiring and it gives me renewed confidence that will we come through this crisis even stronger than before, we have so many times in our company’s history,” Chapek further stated.
Disney on Monday has also outlined specifics about its financial move in an afternoon filing with the Securities and Exchange Commission.
“Mr. Iger has agreed to forgo, through the last payroll period in the Company’s current fiscal year, receipt of all but that portion of his base salary necessary to fund, on an after-tax basis, his contributions to continue to participate in the Company’s health benefits plan,” the filing stated. “He is also waiving his right to receive his car allowance payable during the same period the salary waiver is in effect.”
“Mr. Chapek will forego receipt of 50% and each of Mr. Braverman, Ms. McCarthy, Ms. Parker and Ms. Mucha will forego receipt of 30% of the base salary that would otherwise be payable under his or her employment agreement for as long as the Company determines to continue in effect salary reductions generally for its executives. The salary waivers will not modify other rights under the applicable employment agreements determined by reference to the officer’s base salary; such provisions will continue to be applied based on the stated base salary payable under the applicable agreement.”
The filing concluded, “Additionally, except for the amount of compensation for paid time off, the reductions are not intended to reduce any Company employee benefit provided to such officers that is determined by reference to the base salary payable, except as may be required at law.”
The Disneyland and the Walt Disney World have been closed indefinitely due to the novel Coronavirus pandemic. The parks’ shopping districts and hotels were also closed, along with all North American Disney stores. Disney Paris was closed, too