Walt Disney’s executive chairman and former CEO Bob Iger will forgeo salary and his successor as chief executive Bob Chapek will take a 50% pay cut as companies addresss the economic upheaval and corporate and public pain and PR of the coronavirus.
In a memo to Disney employees, Chapek said that effective April 5, VPs will see a 20% percent salary reduction. SVPs and EVPs and above will see, respectively, a 25% and a 30% cut.
“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,” Chapek said in his email. “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.”
Disney is the latest large company to slash salaries in the global pandemic. Boeing’s CEO Dave Calhoun and Board Chairman Larry Kellner have agreed not to receive any additional pay until the end of the year. Marriott International’s CEO Arne Sorenson and Executive Chairman Bill Marriott are receiving no pay during the downturn in business. Cash strapped AMC Entertainment on its earnings call in late February announced pay cuts for its top executives (and have said they won’t be pulling in a salary).
Disney has warned of the adverse material impact of the virus on its business operations with theme parks closed, sports events canceled, production halted and advertising taking a hit.
The company has said it will be paying its castmembers through April 18.
Here’s the email from Chapek:
Dear Fellow Employee,
Our world is facing an unprecedented crisis that has fundamentally upended our lives, creating uncertainty and hardship – while, at the same time, spurring kindness and compassion. And although there are still many unknowns with respect to the impacts of COVID-19, our top priority remains your safety and well-being.
As we’ve seen, the coronavirus poses significant health risks and has exacted a grave toll on so many lives. As such, it’s more important than ever that all of us follow the guidance of health experts and take the necessary precautions, including continuing to work from home, wherever possible, and practicing social distancing. By doing so, we also help to protect our loved ones, neighbors, and friends.
This is a trying period for all of us and as we navigate these challenging times together and make adjustments in our daily lives, we’re grateful for everyone’s continued flexibility and understanding.
The pandemic is also having a devastating impact on the global and U.S. economies, and it’s hitting businesses like ours particularly hard. In a matter of weeks, we’ve experienced widespread disruption across our company, with our domestic parks and hotels closed indefinitely, our cruise line suspended, our film and TV production halted and theatrical distribution delayed both domestically and internationally, and our retail stores shut down. While I am confident we will get through this challenging period together and emerge even stronger, we must take necessary steps to manage the short- and long-term financial impact on our company.
In light of this, we are going to be implementing a variety of necessary measures designed to better position us to weather these extraordinary challenges. Among them, we will be asking our senior executives to help shoulder the burden by taking a reduction in pay – effective April 5, all VPs will have their salaries reduced by 20%, SVPs by 25%, and EVPs and above by 30%. I will be taking a 50% reduction in my salary. This temporary action will remain in effect until we foresee a substantive recovery in our business. Our executive chairman, Bob Iger, has chosen to forgo 100% of his salary.
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 we will come through this crisis even stronger than before, as we have so many times in our company’s history.
Please continue to take care of yourself and your loved ones, stay well, and know that we are here to support you.
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