Disney CEO did briefly address Warren’s concerns on Tuesday saying, the senator’s “indictment that our past actions somehow weakened our financial cushion and our ability to retain and pay workers amid the pandemic is ill-considered and misleading.”
Chapek added, “As you are well aware, this unprecedented crisis has had a devastating impact on companies nationwide, and businesses large and small have had to take the difficult steps required to weather the impact.”
However, Warren responded to the statement yesterday saying, “Disney won’t answer my questions because it has no good answers. The company said it was simply unfeasible to keep paying workers yet had no explanation for how it was feasible to restore senior executive pay.”
During the start of the COVID-19 crisis, Disney did agree to take a 50% pay cut and executive chairman Bob Iger agreed that he would forgo the remainder of his salary. At that time thousands of Disney VP’s were also forced to take temporary paycuts but back in August those cuts were eliminated and executive salaries were restored to their original amounts.
In addition, and as Warren argued in her letter, base salaries on represent a fraction of a Disney executives earnings with stock options and bonuses also factoring into their wages. The senator added, “Disney spent its emergency fund by handing out billions of dollars to its top wealthy executives and shareholders in stock buybacks and dividends,” Waren continued, “But once the pandemic hit its business, it left thousands of workers holding the bag.”
In his response, Chapek noted that the Walt Disney Company went on to pay employees for “well over a month” after the theme parks closed. He continued, “As the pandemic persisted, we had to make the difficult decision to furlough employees while continuing to pay the full cost of their health coverage.” The CEO would go on to say, “More than six months after closing our domestic parks, with the outcome of the pandemic still very uncertain, we had no choice to lay off a number of non-working employees.”
Chapek also highlighted in his letter that financial decisions that the Walt Disney Company made over the last few years are not related to the company’s need to lay off workers during the COVID-19 crisis. He said, “As we have stated, given the ongoing uncertainties of this pandemic, including limits on capacity to promote social distancing, and the State of California’s refusal to permit a safe reopening any time soon, it unfortunately is not feasible to pay non-working employees indefinitely.”
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