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Walt Disney Cuts Executive Pay to Conserve Cash in the COVID-19 Crisis

By Anders Bylund - Mar 31, 2020 at 10:21AM

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The House of Mouse won't let its leaders go hungry, but the company is starting its cost-saving efforts at the top.

Walt Disney (DIS 2.35%) is taking steps to conserve cash during the coronavirus crisis. The company is starting at the top by reducing the base salaries of Disney's named executives.

The details

Here are the executive pay reductions, as published in an SEC filing on Monday evening:

Name

Title

2019 Base Pay

Base Pay Decrease

Bob Iger

Executive Chairman

$3 million

100%

Bob Chapek

CEO

$2.5 million

50%

Alan Braverman

Senior EVP, General Counsel

$1.75 million

30%

Christine McCarthy

Senior EVP, CFO

$1.8 million

30%

Jayne Parker

Senior EVP, Chief Human Resources Officer

$1.05 million

30%

Zenia Mucha

Senior EVP, Chief Communications Officer

$1.16 million

30%

These pay cuts are temporary, lasting until the company can restart its paused operations such as theme parks and movie production. Iger has agreed to forgo his base salary at least until the end of Disney's fiscal year, which runs until the end of September.

The officers are still eligible for stock-based and cash bonuses, which typically constitute the majority of their total pay. For example, Bob Iger Pocketed $21.8 million of cash bonuses in 2019 alongside equity awards worth $19.7 million. The reductions will take effect in the payroll period starting on April 5.

Disney's corporate logo next to a walking Mickey Mouse.

Image source: Walt Disney.

Disney has not furloughed or fired any of its full-time staff at this point, even though that move could save the company up to $500 million. Disney did pause its business relationships with third-party park workers such as the performers at Disney World's Cirque du Soleil and the staff at park-based Rainforest Cafe locations.

Anders Bylund owns shares of Walt Disney. 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.

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