Disney heir says 50% of executive bonuses should be given to lowest-paid employees, slams CEO's $66m pay package
Disney CEO Bob Iger's $66 million package last year was 1,424 times that of the median salary of a Disney employee, which is $46,127
Earlier this week, Abigail Disney, granddaughter of Walt Disney's brother Roy Disney, criticized Disney CEO Bob Iger's multimillion-dollar pay in a series of tweets. Iger made nearly $66 million last year, and Abigail called it "insane". Speaking about Iger's compensation, she said, "By any objective measure a pay ratio over a thousand is insane."
According to a study from Equilar, Iger's $66 million package last year was 1,424 times that of the median salary of a Disney employee, which is $46,127.
Just days after calling Iger's pay "insane", the granddaughter of the company's co-founder Roy, wrote an opinion piece in the Washington Post, in which she acknowledged that she "struck a nerve with a Twitter thread about wage inequality at the Walt Disney Co."
"I believe that Disney could well lead the way, if its leaders so chose, to a more decent, humane way of doing business," she wrote in a piece published Tuesday.
She proposed that the company put aside half of the bonuses that it gives its executives and distribute that to the bottom 10% of Disney's 200,000 employees.
Six of Disney's top executives, including Bob Iger, received stock awards and options worth a combined $62 million last year, according to a regulatory filing. This, however, doesn't include the additional bonus, which is potentially millions of dollars more, earned by lower-tier executives at the media and theme park conglomerate.
"Besides, at the pay levels we are talking about, an executive giving up half his bonus has zero effect on his quality of life," she writes. "For the people at the bottom, it could mean a ticket out of poverty or debt. It could offer access to decent health care or education for a child."
Abigail's posts on Twitter about executive pay went viral last weekend. "There's a point at which there's just too much going around the top of the system into this class of people who — I'm sorry this is radical — have too much money," she said.
1/ So acc to Fortune, critics of outrageous CEO pay are getting it all wrong. "Alex Edmans, professor at London Business School, thinks that critics may have twisted view of compensation, especially when they focus on pay ratios and median salaries." https://t.co/UZ8GD5nNUy— Abigail Disney (@abigaildisney) April 23, 2019
In her opinion piece on Washington Post, Abigail reiterated her criticism of the pay that the company's lowest-paid workers make.
The company says it pays above the $7.25-an-hour federal minimum wage: Workers at its Florida resorts will make $15 per hour by 2021, while employees at Disneyland in California had their pay increased to $15 an hour at the start of this year. But Abigail Disney said that's not enough.
"This argument fails to acknowledge that the cost of living varies from place to place and few can make do on that, no matter where they live," she wrote.
In the same discussion, she also took the issue with Republican-led tax reform, saying that major corporations who have benefitted from the lower tax rate have put in the extra money into executive pay and share buybacks instead of distributing it among their workers.
"At a company that has never been more profitable, whose top executives drive home with seven- and eight-figure paychecks and whose primary resource is the good-spirited, public-facing people who greet guests day after day, why are we dancing around a minimum wage anyway?" she added.
This is in no way saying that Abigail doesn't believe in executives receiving bonuses. But "the people who contribute to its success also deserve a share of the profits they have helped make happen."
"Here is my suggestion to the Walt Disney Co. leadership. Lead," she concluded. "Reward all of your workers fairly. Don't turn away when they tell you they are unable to make ends meet. You do not exist merely for the benefit of shareholders and managers."
Disney was quick to respond to the criticism and said that the company has made "historic investments" in its workers' pay and benefits, including education initiatives that allow hourly employees the ability to earn a college or vocational degree "completely free of charge". Disney said it has increased the starting hourly salary at Disneyland to $15 and pledged as much as $150 million to education effort.
In addition to this response, the company also defended Iger's pay, which, apparently is "90% performance-based".
"He has delivered exceptional value for shareholders: Disney's market capitalization has grown exponentially over the last decade, raising $75 billion in the last month alone, and the stock price has increased to $132 a share from $24 a share when Mr. Iger became CEO in 2005," a Disney spokesperson told CNN Business.