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  • News Disney stops paying 100,000 workers; protects executive incentive schemes

    Some excerpts from the LA Times' unusually pointed article (emphasis mine):

    Disney stops paying 100,000 workers; cuts mean $500 million a month in savings

    Walt Disney Co. will stop paying more than 100,000 employees this week, nearly half of its workforce, as the world’s biggest entertainment company tries to weather the coronavirus lockdown.

    Suspending pay for thousands of so-called cast members will save Disney up to $500 million a month across its theme parks and hotels, which have been shut in Europe and the U.S. for almost five weeks.

    But slashing fixed costs in a more severe way than other theme-park owners, such as NBCUniversal and Warner Media, poses significant risks to the reputation of the century-old empire behind Mickey Mouse.

    The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive-bonus schemes and a $1.5-billion dividend payment due in July.

    By contrast, some big multinationals, including L’Oréal and Total in France, have vowed to forgo state aid in a show of solidarity with taxpayers.

    Disney over the past month has raised debt and signed new credit facilities, leaving the company with about $20 billion in fresh cash to draw upon for a downturn. “They could afford” not to furlough staff, said Rich Greenfield, analyst at BTIG.

    He cautions, however, that Disney is probably braced for a “very prolonged shutdown.” Disney made nearly $7 billion in operating income from its parks, experiences and products business last year, making up nearly half of all operating profits. Shares in Disney have fallen by a quarter since the outbreak of the virus....

    Top Disney executives have made salary sacrifices to “better enable the company to weather the extraordinary business challenges.” Bob Iger, executive chairman, gave up the remainder of his $3-million salary for this year, while Bob Chapek, who recently replaced Iger as chief executive, will forgo half his $2.5-million base salary.

    Disney protected incentive schemes, which account for most of the executives’ remuneration. Iger earned $65.6 million in 2018 and $47 million last year, The latest package is more than 900 times that of the median Disney worker’s earnings, which stands at about $52,000.

    Chapek could potentially earn an annual bonus “of not less than 300%” of salary, in addition to a long-term incentive award of “not less than $15 million.”

    Speaking at Disney’s shareholder meeting in March, Chapek said: “Our ability to do good in the world starts with our cast members ... who create magic every day. Our commitment to them will always be our top priority.”


    "Disneyland is often called a magic kingdom because
    it combines fantasy and history, adventure and learning,
    together with every variety of recreation and fun,
    designed to appeal to everyone."

    - Walt Disney

    "Disneyland is all about turning movies into rides."
    - Michael Eisner

    "It's very symbiotic."
    - Bob Chapek

  • #2
    Thank you for sharing this article. It's all so tragic Mr Wiggins , it's painful to see. So many Cast Members, their lives in tatters.

    I think that this coupled with LilMonsterPageantHelper's outstanding, but very sad update, Disney believes that they parks are going to be shut down for a LONG time and they are pulling in for the long haul.

    If we read into the news and some of the updates on this site, it may be August at the earliest that the parks open, and that might be being optimistic.

    Comment


    • #3
      I had read over on ign.com that Netflix was now worth more money than Disney right now because of everything happening in the world. This move doesn't surprise me, it was inevitable, especially since it seems the entire corporation is effectively cut off from making money outside of Disney+ for the foreseeable future. They'll do anything they have to to stay alive.

      Another forum had done the math and calculated that in some cases, a lot of hourly park Cast Members would be making more money doing nothing on unemployment (with the increased weekly amount mandated) than they actually would working their full 40 in an open park. This whole situation is screwy (at my work I am currently being given a 5 dollar increase in hazard pay to do about a fourth of the work I was doing before).
      "I take no side. I am beyond your worrying and wars. I am unseen. Unknowable. Like a rock in the river."

      Comment


      • #4
        This came up before on another thread, the fact that so many CEOs and high-flyers (not just Iger & Chapek) are tooting their own horns about 'giving up' part or all of their salaries. But when you looked more closely, their 'salary' was a minuscule part of their total remuneration package.

        They let it be thought by the 'great unwashed' that they were giving up 50% (or whatever) of their total remuneration and did not bother to correct the misconception. Name and shame, I say.

        "Life is not about waiting for the storm to pass, it's about learning to dance in the rain.​"

        Comment


        • #5
          The WWE did something like this recently too. They laid off tons of backstage employees, producers, and talent...but are still paying out their dividend, the stock market is so disjointed from reality now

          Comment


          • #6
            It just keeps getting worse for the mouse. Analysts on Wall Street are downgrading Disney's stock today. Some are saying they may not reopen until 2021 and may not make a profit until a vaccine is available. The hits keep on coming for Disney which puts them another step closer to a hostile take over.

            https://www.marketwatch.com/story/di...ary-2020-04-20


            https://www.thewrap.com/disney-stock...it-suisse-ubs/

            Comment


            • #7
              While it wont be great for everyone..they are making 600 bucks a week and do still have healthcare though Disney.

              Better than many, yes would be nice to be paid fully but really could be worst
              Happy Halloween!!!

              Comment


              • #8
                Originally posted by tarheelalum View Post
                It just keeps getting worse for the mouse. Analysts on Wall Street are downgrading Disney's stock today. Some are saying they may not reopen until 2021 and may not make a profit until a vaccine is available. The hits keep on coming for Disney which puts them another step closer to a hostile take over.

                https://www.marketwatch.com/story/di...ary-2020-04-20


                https://www.thewrap.com/disney-stock...it-suisse-ubs/
                I could see an Amazon or Apple making a play. Amazon might be even more likely because they have all the channels available for merch as well as content. Disney would never be the same again, but then again, the world is not the same.

                Once Amazon bought Disney, they could jettison the leisure portions if they wished or license them to other companies and have them run Parks &Resorts like TDL.

                Disney would then have unprecedented reach through Amazons vast network and Bezos would have a treasure trove of IP second to none.

                Besides, he and his gf Lauren Sanchez were at DL just back in Feb.

                Comment


                • #9
                  Though this administration does not seem to care much about monopolies, evidenced by allowing Disney's takeover of Fox which I am sure would have been denied under many previous administrations, a hostile take over would still need to pass the committee, and someone as big as Amazon, which has a wealth of media properties already, buying Disney would be a hard sell. It would be very difficult to explain how the merger would not be to the detriment of the consumer.

                  Comment


                  • #10
                    Originally posted by linkeq2001 View Post
                    Though this administration does not seem to care much about monopolies, evidenced by allowing Disney's takeover of Fox which I am sure would have been denied under many previous administrations, a hostile take over would still need to pass the committee, and someone as big as Amazon, which has a wealth of media properties already, buying Disney would be a hard sell. It would be very difficult to explain how the merger would not be to the detriment of the consumer.
                    What monopoly does Disney have now that they purchased Fox's movie studios? There are still quite a few other movie studios. Disney did not buy any of Fox's TV or cable networks.
                    Last edited by tarheelalum; 04-20-2020, 01:52 PM.

                    Comment


                    • #11
                      Originally posted by Golden Zephyr View Post

                      I could see an Amazon or Apple making a play. Amazon might be even more likely because they have all the channels available for merch as well as content. Disney would never be the same again, but then again, the world is not the same.

                      Once Amazon bought Disney, they could jettison the leisure portions if they wished or license them to other companies and have them run Parks &Resorts like TDL.

                      Disney would then have unprecedented reach through Amazons vast network and Bezos would have a treasure trove of IP second to none.

                      Besides, he and his gf Lauren Sanchez were at DL just back in Feb.
                      I'd much rather see Apple buy Disney. Amazon is the walmart of the internet and a horrible cheap company as far as the way the treat their employees. Apple is a far better company and one I could see embrace Disney's theme park's in a manner that would enhance their technology products.Plus Amazon's CEO dresses like Dr Evil.

                      Comment


                      • #12
                        Originally posted by tarheelalum View Post

                        I'd much rather see Apple buy Disney. Amazon is the walmart of the internet and a horrible cheap company as far as the way the treat their employees. Apple is a far better company and one I could see embrace Disney's theme park's in a manner that would enhance their technology products.Plus Amazon's CEO dresses like Dr Evil.
                        I'm with you there, I would much rather Apple buy Disney, as Apple at least has a history of focusing on innovation, creativity, and aesthetic. They. would be far more likely to carry the Disney flame.

                        Even more-so, I'd rather Disney just remain Disney and not be bought up at all. I am saddened at even the prospect of Disney being bought by anyone else.

                        Amazon is brutal, ruthless, and relentlessly cheap in ways current management can't even fathom. Bezos wants to control EVERYTHING in the marketplace and Disney would offer him the ability to put himself FAR ahead of his competitors again with its treasure trove of brands, IPs and destinations.

                        Amazon has gained enough market cap in just the last two weeks alone to buy all of Disney.

                        Every state government has shut down all of Amazons small business competitors and Amazon effectively has no competition in the marketplace by any small retail business at this point.

                        Who knows what will happen in the future, but right now, Amazon has no equal.

                        Comment


                        • #13
                          Originally posted by tarheelalum View Post
                          It just keeps getting worse for the mouse. Analysts on Wall Street are downgrading Disney's stock today. Some are saying they may not reopen until 2021 and may not make a profit until a vaccine is available. The hits keep on coming for Disney which puts them another step closer to a hostile take over.

                          https://www.marketwatch.com/story/di...ary-2020-04-20


                          https://www.thewrap.com/disney-stock...it-suisse-ubs/

                          There are other HUGE entertainment conglomerates who are getting their ratings downgraded by various sources. My son works for one and he says that 'common wisdom' is saying that full scale 'mass gatherings' aren't going to happen until we have a reliable vaccine. So 2021 isn't all that far-fetched.

                          But that and a buck-fifty will get you a cup of coffee. We're in uncharted territory now.
                          "Life is not about waiting for the storm to pass, it's about learning to dance in the rain.​"

                          Comment


                          • #14
                            If Trump has anything to say about it, he won`t let Bezos do it.. The two have been feuding for years..

                            https://www.foxbusiness.com/money/do...s-feud-history

                            Comment


                            • #15
                              Originally posted by Mr Wiggins View Post
                              Some excerpts from the LA Times' unusually pointed article (emphasis mine):

                              Disney stops paying 100,000 workers; cuts mean $500 million a month in savings

                              Walt Disney Co. will stop paying more than 100,000 employees this week, nearly half of its workforce, as the world’s biggest entertainment company tries to weather the coronavirus lockdown.

                              Suspending pay for thousands of so-called cast members will save Disney up to $500 million a month across its theme parks and hotels, which have been shut in Europe and the U.S. for almost five weeks.

                              But slashing fixed costs in a more severe way than other theme-park owners, such as NBCUniversal and Warner Media, poses significant risks to the reputation of the century-old empire behind Mickey Mouse.

                              The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive-bonus schemes and a $1.5-billion dividend payment due in July.

                              By contrast, some big multinationals, including L’Oréal and Total in France, have vowed to forgo state aid in a show of solidarity with taxpayers.

                              Disney over the past month has raised debt and signed new credit facilities, leaving the company with about $20 billion in fresh cash to draw upon for a downturn. “They could afford” not to furlough staff, said Rich Greenfield, analyst at BTIG.

                              He cautions, however, that Disney is probably braced for a “very prolonged shutdown.” Disney made nearly $7 billion in operating income from its parks, experiences and products business last year, making up nearly half of all operating profits. Shares in Disney have fallen by a quarter since the outbreak of the virus....

                              Top Disney executives have made salary sacrifices to “better enable the company to weather the extraordinary business challenges.” Bob Iger, executive chairman, gave up the remainder of his $3-million salary for this year, while Bob Chapek, who recently replaced Iger as chief executive, will forgo half his $2.5-million base salary.

                              Disney protected incentive schemes, which account for most of the executives’ remuneration. Iger earned $65.6 million in 2018 and $47 million last year, The latest package is more than 900 times that of the median Disney worker’s earnings, which stands at about $52,000.

                              Chapek could potentially earn an annual bonus “of not less than 300%” of salary, in addition to a long-term incentive award of “not less than $15 million.”

                              Speaking at Disney’s shareholder meeting in March, Chapek said: “Our ability to do good in the world starts with our cast members ... who create magic every day. Our commitment to them will always be our top priority.”

                              Just curious as to what solution is. And you can't mention Chapek, Iger, or the management team in any negative way.
                              "And yes, we implore EVERYBODY to follow the park rules. Having off-ride footage is great, but any still photo's or video's taken ON the coasters at SFMM are strictly against the rules. They are there for your (and everybody's) safety." "Six Flags doesn't allow ANY loose articles on their coasters, and they don't allow video taping on their coasters. " BUT, "​ This is not true. Six Flags does not allow ANY On-Ride video or pictures on the rides. The ONLY way is if you get explicit permission from Park Management." ???

                              Comment


                              • #16
                                Originally posted by Stormy View Post
                                This came up before on another thread, the fact that so many CEOs and high-flyers (not just Iger & Chapek) are tooting their own horns about 'giving up' part or all of their salaries. But when you looked more closely, their 'salary' was a minuscule part of their total remuneration package.

                                They let it be thought by the 'great unwashed' that they were giving up 50% (or whatever) of their total remuneration and did not bother to correct the misconception. Name and shame, I say.
                                Agree.

                                I think very few people know that they're actually giving up next to nothing.

                                Comment


                                • #17
                                  Originally posted by TacAlert View Post

                                  Just curious as to what solution is. And you can't mention Chapek, Iger, or the management team in any negative way.
                                  Terrible as it may be, we're probably looking at it. Myself and others will give these executive types guff (which is deserved in many cases) but even if I don't believe their decision making reflects it most of the time, they're still the brains of the operation and smarter than some will give them credit for. Greedy and out of touch? I'm sure. But still smart. These are unprecedented times so there isn't much of a comparison for me to make but I'll use my current workplace as an example:

                                  When **** hit the fan, the company had to assess it's goals and priorities and much like Disney's keys (which go Safety, Courtesy, Show and Efficiency, in that order), there is going to be a hierarchy to them. They're going to want to obviously try and hit and fill as many goals as they can for as long as they can, but as the situation worsens, some priorities will crumble to preserve the ones that are considered "more important". In my workplace, the top 3 priorities are: 1) Ensure that people are protected and safe from the virus, 2) Ensure that the company survives long term and finally, 3) Ensure Employees remain employed (or at least, as many as possible).

                                  Looking at Disney from this scenario, they attempted to keep number 3 going for as long as possible and even though they are laying off as many people as they feel is needed at this particular juncture, they've still got employees on furlough able to keep their benefits. But priority 3 has been deemed something that needs to break a little to ensure what they probably feel is more important, priority 2 (making sure the company is even there when this thing passes). I don't have the numbers in front of me the way Disney's execs do, so I can't speak to it fully, but I'm sure some folks who are more educated on matters than I am looked at them and came to this decision. Does it suck? Absolutely. Does it look bad? Yeah, I guess. You've got some heads up top retaining their overly large incentive packages but the key word there is "incentive". It's their reason to stick around, after all, who wouldn't with those kinds of numbers? -and keeping them around is a top priority in this situation because, again, despite their often questionable judgement, they are still the most qualified/"smartest" person(s) in the room to guide the company through this crisis. They are needed. Do they need to be paid that much? Probably not, but if it's what they're demanding to remain in place and steer the ship with a bunch of holes blown in it, then the company's hands are tied in order to ensure it survives or doesn't get overtaken.

                                  Could these execs' bonuses be used to keep paying employees? They could, for a time. But despite how much they make, we'd probably be surprised to see how fast it drains. Just think of the massive amount of employees Disney has spread across all facets of the company (Cruise Line, Theme Parks, Movies, ESPN, ABC, FOX, MARVEL, Lucasfilm, etc.). Millions and millions of dollars may seem like a lot when it's going to one person but it would probably only last little while longer if it attempted to fully fund every person from every division I just listed. So instead, the priority was given to what they felt was more important; keeping the captain around to steer the ship through rough waters.

                                  Do I feel for the Haunted Mansion butler who was probably just laid off? I absolutely do. I was one of them at one point. They have an important job. But when looking at the reality of the situation, while that butler may have more "Disney street smarts" than someone like Iger or Chapek, they just don't have the know how, the connections or the good will on Wall Street needed to keep the company alive if either of the two Bobs or other execs decide to abandon ship. So of course they were cut. Again, it is sad and I feel for them on a number of levels. But that employee can now take advantage of an increased unemployment mandate which will honestly probably be giving them more a week to do nothing than Disney was paying them to work a full 40 in the park. But that's just for the folks on the lower end. I'm sure there are some salaried folks who will be making less after all things are considered and I can't speak to them.

                                  If nothing else, this whole debacle should probably inspire a much needed/overdue discussion about employee worth in the workplace vs. big bonuses/payouts given up top once things start to calm down and folks are returned to their "regular" pay. I wouldn't be surprised to see countless workforces start to realize they are worth more after being on the frontlines for this thing and to demand more money after seeing their employers abilities to pay them out more in a time of crisis.
                                  "I take no side. I am beyond your worrying and wars. I am unseen. Unknowable. Like a rock in the river."

                                  Comment


                                  • #18
                                    Originally posted by Blurr View Post
                                    Terrible as it may be, we're probably looking at it.
                                    Bingo.

                                    As I posted in another thread:

                                    Originally posted by Mr Wiggins View Post
                                    Given the new information coming from medical researchers almost daily, the impact of this crisis to the theme park industry in general and to Disney's costly-to-run resorts in particular may be more severe and longer lasting than we've thought. This situation goes far beyond whether current Parks management is habitually cheap or spends like Walt himself -- it's about making the hard choices necessary to protect the Company from any attempts at a takeover.
                                    "Disneyland is often called a magic kingdom because
                                    it combines fantasy and history, adventure and learning,
                                    together with every variety of recreation and fun,
                                    designed to appeal to everyone."

                                    - Walt Disney

                                    "Disneyland is all about turning movies into rides."
                                    - Michael Eisner

                                    "It's very symbiotic."
                                    - Bob Chapek

                                    Comment


                                    • #19
                                      Originally posted by Mr Wiggins View Post

                                      Bingo.

                                      As I posted in another thread:

                                      Given the new information coming from medical researchers almost daily, the impact of this crisis to the theme park industry in general and to Disney's costly-to-run resorts in particular may be more severe and longer lasting than we've thought. This situation goes far beyond whether current Parks management is habitually cheap or spends like Walt himself -- it's about making the hard choices necessary to protect the Company from any attempts at a takeover.
                                      Agreed. -and let me add a disclaimer/addendum to my previous post: I don't like where the Bob's come from creatively. I don't believe personally that they are good candidates to run the company from a creative standpoint, long term. I would love for their roles to go to someone else who excels in that department and who could be brought up to learn the ins and outs of the more brutal corporate side of things. Again, that is a long term wish. But right now I feel like the Bobs are a necessary "evil". This situation and type of battle arena are exactly what folks like them were bred for. It is not going to be pretty but they are going to be able to identify and make any financial decisions that are necessary to make sure Disney remains a company at all. An untrained, more creatively inclined person might be totally cut off from any part of the company that allows their strengths to shine (since they aren't allowed to run or build anything at all during lockdown). Taking the chance on someone new just probably isn't in Disney's cards right now with so much instability.

                                      So, while I certainly wish that farther on down the line, someone with both creative and financial capabilities inherits the roles occupied by Iger/Chapek (and is able to prove to Wall Street that their way works), I am personally fine with allowing the Bobs to steer the ship right now with all things considered. Keeping the company alive by any means is something I trust them to do, brutally if needed. Again, it won't be pretty and in some cases it won't feel or be fair. But it will be the necessary "evil".

                                      "I take no side. I am beyond your worrying and wars. I am unseen. Unknowable. Like a rock in the river."

                                      Comment


                                      • #20
                                        Paying stock holders 1.5 billion in dividends and keeping executive bonuses in place is not a good example of making hard choices. Those are greedy shortsighted choices that very well may prove to be the company's downfall. They are basically raiding the company of capital in dire times.

                                        Comment

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