Disney's top executives, including chairman Bob Iger and Chief Executive Officer Bob Chapek, will forgo their bonuses for 2020 "in light of the company's circumstances this year" related to the coronavirus, according to an SEC filing released Tuesday.
The move comes as the entertainment giant struggled to meet some performance metrics due to the pandemic's financial impact. Disney reported a loss of $2.8 billion for the full year on revenue of $65 billion, with its Parks, Experiences and and Products segment taking a $7.4 billion hit for the full year.
The pandemic has forced Disney to delay many of its blockbuster film releases, close its theme parks globally with some remaining shut down indefinitely, extend the suspension of its cruise line and layoff some 32,000 employees. The company also ended its annual pass program and shuttered Radio Disney as part of a restructuring.
Iger, who announced in February 2020 that he would be stepping down from his role as chief executive officer and staying on as chairman through 2021, saw his total compensation package fall to $21 million for the company's most recent fiscal year which ended on Oct. 3. Iger took a salary of $1.56 million for the year, with stock and options awards of $6.9 million and $9.5 million, respectively.
Iger previously received a $41 million compensation package in fiscal 2019, with $10 million and 9.5 million in stock and option awards, respectively, and $65.6 million in fiscal 2018, with 35.3 million and 8.2 million in stock and option awards, respectively, as an incentive to remain with the company past his original planned retirement date.
Meanwhile, Chapek, who took over Iger's role after serving as chairman of Disney Parks, Experiences and Products since 2018, received a compensation package of $14.1 million for his first year in the role. A nearly three-decade veteran of the company, Chapek took a salary of $1.81 million, plus stock and options worth $6.13 million and $3.37 million, respectively.
The cut in bonuses comes in addition to the previous announcement from the executives last summer that they would be taking a pay cut.
In addition, other top Disney executives, including senior executive vice president, general counsel and secretary Alan Braverman, chief financial officer Christine McCarthy, senior executive vice president and chief communications officer Zenia Mucha, and senior executive vice president and chief human resources officer Jayne Parker, saw their compensation packages significantly decline.
In a letter to shareholders, Disney's compensation committee said that its compensation plan was "made to motivate executives and recognize them for their unwavering efforts and leadership throughout the pandemic, while taking into account the pandemic’s impact on the financial performance of the Company and the broader employee workforce."
"The Committee considered this backdrop in determining compensation for the Company’s executives, including taking action to meaningfully reduce NEO compensation and further incorporating ESG metrics for diversity and inclusion into executives’ go-forward compensation structures," the committee noted.
Going forward, the compensation committee plans to remove adjusted earnings per share and adjusted return on invested capital as bonus metrics for fiscal 2021 and will add revenue as a new criteria.
Despite the company's struggles, Disney has seen a boost in the streaming segment of its business, with Disney+ gaining a total of 86.8 million subscribers since its launch in November 2019. Disney said during its Investor Day Presentation in December that it expects that number to grow to somewhere between 230 million to 260 million subscribers by 2024.
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Disney is diving deep into streaming, with plans to spend between $14 and $16 billion on streaming content between now and 2024. As a result, the company will raise the price of the service to $7.99 per month beginning in March 2021.
Disney's slate of movies and television shows include over 50 new projects, with 10 new Marvel series, 10 new "Star Wars" series, 15 Disney live-action, Disney Animation, and Pixar series and 15 all-new Disney live-action, Disney Animation, and Pixar feature films.
The company will also bring new content to Hulu and ESPN+. Hulu now has 38.8 million subscribers while its cord-cutting Hulu + Live TV has 4 million paying subscribers, making it the fifth-largest pay-TV provider overall. Hulu is expected to have between 50 million and 60 million subscribers by the end of fiscal 2024.