Disney’s top execs – including VP’s, SVP’s and EVP’s – are to take pay cuts to deal with the impact of the Coronavirus pandemic, with new CEO Bob Chapek and executive chairman Bob Iger taking the largest reductions.
In a memo sent to staff on Monday, Chapek said that he will reduce his salary by 50% while Iger will forego his $3m salary.
Chapek, formerly the president of Disney’s parks division before he took the top job in February, was set to receive a 2020 salary of $2.5m, with up to a further $22.5m in performance-related incentives.
The pandemic is having a devastating impact on the global and US economies, and it’s hitting businesses like ours particularly hard
Disney CEO Bob Chapek
Executives at the VP level will see compensation reduced by 20% from 5 April, while SVP’s will take a 25% pay reduction and EVP’s will see their salaries drop by 35%.
Chapek said: “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.
“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 US 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.”
Research firm Moffett Nathanson has estimated that Disney will take a revenue hit of $3.4bn to the end of 2020 as a result of the Covid-19 lockdown around the world.
While it will do little to change the tide, Disney will hope that its ongoing expansion of DTC product Disney+, which launched across Western Europe on 24 March, will bring some good news when it reports its financial results in May.