Walt Disney Co. Executive Chairman Bob Iger will forgo his salary starting in April as the company deals with the financial impact of the coronavirus crisis, which has shuttered theme parks and film productions, it was reported Tuesday.
Disney Chief Executive Bob Chapek said Monday that senior executives including Iger would have their salaries reduced to "shoulder the burden'' of the Burbank entertainment giant's response to the COVID-19 pandemic, the Los Angeles Times reported. Chapek will take a 50% salary cut.
Chapek was named CEO in February, replacing Iger, who said he wanted to focus on leading Disney's creative endeavors after 15 years in the top job. Chapek was previously chairman of Disney's parks, experiences and products segment.
Iger's annual base salary was $3 million during the company's most recent fiscal year, while his total compensation was $47.5 million, including a cash bonus and stock awards. Chapek's base salary is $2.5 million, plus a target bonus of $7.5 million and an annual long-term incentive award of $15 million, according to a regulatory filing.
The decision comes as Disney continues to suffer from widespread disruption due to government-mandated steps to slow the spread of the novel coronavirus. Disney on Friday said Disneyland and Walt Disney World parks would remain closed "until further notice.'' Disney had previously said the parks would be closed through the end of March.
The outbreak has also closed Disney's cruise line business, shuttered retail stores and delayed multiple film and television productions. The situation also forced the company to push back the release dates for high- profile films including "Mulan" and "Black Widow'' indefinitely.
On March 20, Disney disclosed it had raised $6 billion in debt as it faced a blow from 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 said in an email to staff. "In light of this, we are going to be implementing a variety of necessary measures designed to better position us to weather these extraordinary challenges. Among them, we will be asking our senior executives to help shoulder the burden by taking a reduction in pay.''
Many other executives will see their pay reduced as well. Vice presidents at Disney will have their salaries cut by 20%. Pay for senior vice presidents and executive vice presidents will be docked 25% and 30%, respectively.
The reductions take effect April 5.
"This temporary action will remain in effect until we foresee a substantive recovery in our business,'' Chapek said.
Iger is one of the media industry's highest-paid executives, but his base salary of $3 million makes up a small percentage of his total compensation. His $47.5 million pay package in fiscal 2019 included a cash bonus of $21.8 million, plus stock awards and options totaling $19.7 million.
Bonuses and other awards are based on performance and determined at the end of the fiscal year.