Please ensure Javascript is enabled for purposes of website accessibility

Disney Executives to Take COVID-19 Pay Cuts

By Rhian Hunt - Mar 30, 2020 at 3:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The higher up the ladder, the bigger the salary reduction.

In a move intended to help cut costs during the coronavirus pandemic, Disney (DIS -1.38%) executives are taking reductions in pay while the disruption lasts. Executive Chairman and former CEO Bob Iger is leading the way, giving up his approximately $48 million salary for 2020, while other company leaders will take substantial cuts in remuneration.

Freshly elevated CEO Bob Chapek, who has occupied the post for only about a month, will take a 50% pay cut under the plan, which the company announced in a memo Monday morning. The memo didn't indicate if only Chapek's $2.5 million base salary will be halved, or if the measure applies to his $7.5 million annual bonus and $15 million yearly incentive, too, as noted by The Hollywood Reporter.

A hundred dollar bill being cut with scissors.

Image Source: Getty Images

Executive VPs will forgo 30% of their salaries, while senior VPs and VPs will endure 25% and 20% pay cuts, respectively. Disney has slated the reductions to begin on April 5. At lower levels, the media titan plans to keep paying its hourly workers through April 16, though Disney theme parks remain closed

While the loss of theme park revenues has been a big hit to the company's top line, other aspects of its business have taken hits, too. The coronavirus has caused delays and postponements of filming on a number of projects, affecting another major Disney business unit. 

Nevertheless, Chapek praised the dedication of Disney employees in the memo announcing the salary cuts, saying "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."

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney and short April 2020 $135 calls on Walt Disney. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
$106.63 (-1.38%) $-1.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.