If you’ve been following along with MickeyBlog then you know that Elizabeth Warren recently penned an open letter to Disney over the decision to layoff some 28,000 whilst increasing executive salaries just a few weeks before. Warren argues that Disney is putting shareholders over employees and is not satisfied with the response she’s had from Disney.
As CNN reports, on October 13, Warren skewered Disney for making “short-sighted” business decisions that impacted the company’s capital while “showering its top executives with over-the-top compensation packages and salaries.”
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.”
Photo: CNBC
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.”
It will be interesting to see what happens next in the dialogue between Warren and the Walt Disney Company. We promise to keep you posted!
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Melissa Roden
As an agent with MickeyTravels and a Blogger with MickeyBlog I enjoy sharing, tips, tricks and advice to help readers and clients get the most out of your time with Disney. When I'm not helping clients plan their perfect holidays or nab those hard-to-get discounts you can find me enjoying a Dole Whip at Disney World with my daughter! Reach out for a FREE, no obligation quote at 1.800.801.4025 or find me on Facebook!
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