Walt Disney Co.’s top brass are biting the bullet during the COVID-19 pandemic, with executive chairman Bob Iger foregoing his $3 million salary in fiscal 2020, while newly minted CEO Bob Chapek will reduce his pay by 50%.
Chapek outlined that and other executive pay changes in a memo to employees Monday. According to the memo, Disney executives at the VP level will see their compensation reduced by 20% beginning April 5, with SVPs taking a 25% pay cut and EVPs taking a 35% cut.
“This temporary action will remain in effect until we foresee a substantive recovery in our business,” Chapek said in the memo.
Iger received total compensation of about $45.7 million in fiscal 2019, more than 90% of that through stock awards and other compensation tied to company performance. The year before, when his salary was $2.875 million, his total compensation was $65.6 million. Iger has said he will retire at the end of 2021.
Chapek, who had been head of Disney’s Theme Parks before being named CEO in February was expected to receive about $2.5 million in salary in fiscal 2020, and could receive up to another $22.5 million in performance-related incentives.
The salary reductions come as the coronavirus continues to keep Americans confined to their homes to stem the outbreak. Disney has had to close its domestic theme parks and hotels, suspended its cruise line, halted film and TV production and theatrical content distribution, and is weathering a lack of live sports programming at its flagship cable channel ESPN. In a research note, MoffettNathanson media analyst Michael Nathanson estimated Disney would take a $1.4 billion revenue hit in fiscal Q2 and Q3 2020 as a result of the virus.
“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,” Chapek wrote in the memo.
Disney shareholders appeared to be pleased, driving the stock up about 3.5% ($3.40 per share) to $99.80 each on March 30.