In your professional opinion, does Bob Iger’s salary, which is 1,424 times higher than the median Disney employee, present a morale or other risk for Disney?
Does Iger’s compensation represent a fair deal for the CEO who has overseen the tripling of Disney’s stock price?
Do you take exception with the disparity between your pay and your CEO’s compensation?
This controversy was sparked over the weekend by a viral Twitter thread from Roy Disney’s granddaughter, which you can read about here:
https://www.fastcompany.com/90333082/disney-ceo-bob-igers-compensation-is-insane-says-abigail-disney
Senior Associate 1 - I respect your take but wholeheartedly disagree. It furthers the notion of extreme elitism and dehumanizing poverty. Having lived and been brought up in other countries the end result is that you end up with mansions next to shanty towns. America is unfortunately heading this way and it creates a society where people stop caring about those at the bottom. It’s a simple question to me about what would I rather have society look like? 1 super rich person, 5 very rich people, 5 “middle class” and 89 poverty level people or 20 rich people, 60 “middle class”, and 20 poverty level. Personally, I’d prefer the second one.
The biggest determinant of your socioeconomic position is what position you were born into. Those born into wealth or even upper middle class have significantly more upward mobility because they can afford the opportunities to move upwards. It is much harder to move up when you start at the bottom, in underfunded schools, in neighborhoods with high crime/poverty and little economic opportunity, and no money to be able to move to areas where there is more economic mobility.
Short answer, good for him. He deserves it. #theLife
You and me both!!
He tripled the stock price. Im certain that made Disney a good chunk of money. Plus, I am certain a lot of that compensation was in stock options, which would get the benefit of his hard work in tripling the stock price. I’m sick of hearing that CEOs shouldn’t make X dollars more than the average employee. The average employee at Disney probably does not have a degree and definitely doesn’t have the experience necessary to be a CEO. If he made Disney money, he should be compensated fairly. If the average Disney employee made Disney that much money, then they should be compensated as well. But I worked at a six flags growing up, paid 8 bucks an hour. That’s exactly what 16 year old me with no degrees and no experience was worth. Not the 15 Disney is already paying
I would also like to know if this granddaughter is sitting on a large trust fund and Disney stock and if so, doesn’t she think that’s a little excessive and that should be redistributed? Argument works both ways.
Unless you are making a considerable amount of money it's unlikely you would pay significantly more in taxes, and I'd argue the implementation of greater efficiencies but getting rid of the middlemen in our current system would cover any increase in tax expenses.
And you are talking about a generation that had the idea that a college education was the only guarantee of being employed drilled into their heads. The student loan system is incredibly predatory, shackling students with huge debts starting at 18/19 in order to fund colleges vanity projects and stuff the pockets of creditors by giving them greater rights than any other form of creditor.
And philanthropy in a broken system is like scooping water out of a boat with a bucket while there are multiple holes in it. Imagine living in a country where the poor and downtrodden didn't have to rely on the whims of a stranger's philanthropic inclinations.
And ask anyone who doesn't have incredible insurance or tons of money how much they like the current system, where they are taking Ubers to ERs because an ambulance ride costs $3000+ yet the paramedics and EMTs make 12/hour? Where is that money going?
Imo there is no honest argument for why a CEO or other higher up should earn literally 1000X the median employee
Disney is a gargantuan company though. How many people in the world are qualified to run it as well as Iger is? If you look at CEO salary vs percentage of revenue it's probably more reasonable vs other companies.
How much would he cost to replace? He is doing a great job for shareholders, who need to have confidence in leadership. There’s no reason to make it personal. He’s just an expense on the GL to keep the company running well. If you don’t think he deserves his salary, it’s clear you don’t understand the free market/capitalism
There are also companies that run successfully where the CEO doesn’t make 1,424x the median employees salary. It’s a choice. In the NBA, Lebron James is worth more than most of the rest of the league combined (players 10 through 350). However, he doesn’t get paid that way. The NBA recognizes the need for these other players as an “infrastructure” so they created a cap on salary for an individual player. Its not wrong or right but simply pointing out that lack of some measure of equity leads to death of infrastructure + elites and poverty (historically)
I am not ignorant. Venezuela has rampant inflation. They’ve raised minimum wage 300% just this year alone. That inflation, along with rampant corruption, has caused Venezuela’s collapse. Please don’t call people ignorant when you have no idea who they are or what they know. Obviously Venezuela has many issues, some of which they can control and some they cannot. But raising the minimum wage has caused inflation which has absolutely aggravated their economic situation.
Bob Iger creates trillions in value, from the people who purchase Disney stock to those whose pensions/retirement DEPEND on it. He gets a percentage of the value he creates. Just as employees get a percentage of the value they create in the form of salary and benefits. Create more value = make more money. If you turn society into mostly middle class, competition disappears and no one is motivated to create the value an elite few create. If you complain about how he’s making it on the back of his poor workers, here’s two points to dwell on: 1) how do his life choices and daily habits differ from the average worker? 2) how much value does the average employee create? I assure you Disney is not successful because of a few Park employees putting on a show or because some employee came up with a new marketing initiative. It’s because of the analysis, coordination, long hours, and immensely exceptional decision making from those at the top. The money doesn’t trickle down but the effects of those decisions do
Don’t be salty you aren’t there, aspire to be better and stop fucking complaining about what you don’t have.
Look. Who cares what he makes? The board decides his comp on behalf of investors who own the company. If they choose to pay him that much who are we to judge? If you have a real problem with it buy some shares and vote the directors out.
Anything else is worthless debate.
Only if it was that easy.
You know an average Joe can’t just go in and buy shares to vote out the directors and then the CEO? Like makes no sense.
First of all an average Joe doesn’t have enough money to begin with so how is this capitalistic cycle fair?
He didn't triple the stock price. The housekeeper who left a towel animal in a child's hotel room, which caused him to beg his parents to return next year, tripled it. He's standing on the shoulders of minimum wage workers who break their backs to give their guest a magical experience.
Disney parks are a tiny portion of Disney.
Okay so Bob Iger made $65M. Divide by 201k Disney employees and you’re at $323.38/employee. Over a standard 2080 hours, that’s 15.5 cents/hour. Is that really worth getting worked up over? During his tenure he oversaw several high profile acquisitions, including Pixar, LucasFilm, Marvel, and FOX Entertainment. He’s done a fantastic job at the helm, and should be compensated accordingly .
This!!! Thank you for saying it more eloquently than I could. One could argue she’s benefited the most from Iger. Sounds like she’s biting the hand that feeds her. When she starts donating all her earnings to charity, I’ll come back to the negotiating table
I would think that the debate goes to say whether or not it is all thanks to him that the stock went up. As is the case almost anywhere in business, success is happily ascribed or claimed by individuals, while failure/loss is socialized. Hence the argument being valid IMHO whether or not his contribution was really that great/significant/whatever that it justifies such a disproportionate participation in the performance gains.
That’s a good point. I didn’t think about it that way. Surely he contributed but were his contributions worth what he was paid? I am unsure. I’d have to know the breakdown between salary, bonus and cash out of stock options before I would even begin forming an opinion
Would anyone have issue with his compensation If his base salary was $1 and all the rest was stock based compensation that only paid out should the value of the company increase?
Fair point. And that’s what I was not great at articulating above. Most of that 64 million was more than likely stock options that he exercised. I think that’s a more than fair way to pay a CEO since their job is to create wealth for the company
I’m highly impressed by the (mostly) respectful and thoughtful discussion.
I don’t know what thread you’re reading—looks like a bunch of libertarians and socialists yelling past each other to me
I agree with most of your points SA1, but you are wrong about how the NBA works. The players collectively bargain a certain percentage of basketball revenue so what doesn’t go to Lebron because of individual salary limitation does go to other players.
Okay then I am incorrect about that. I have no idea about sports. My point was, that wealth created doesn’t just vanish because there is a salary cap.
Let’s be real, bobs salary is INSANE. Even if we tie it to the financials, Disney made $12B in NI in 2018 and the CEO got paid $65M.
BoA made $26B (more than twice the amount of Disney) and their CEO gets around $50M.
Fannie Mae made $12B, and their highest paid exec made a little over $3M.
If anything, Bob Iger should be in the $25M range
that’s a valid point...I tried to keep it pretty simplistic. But even with the change in value ($4M increase in NI, +50% YoY) you can’t attribute all of the change in value to a single person. Yes he’s the leader, but there are plenty of VPs and other staff along the way that helped drive the change. I think he should be well compensated, but $65M is way too much for one person.
The American Dream
Also remember he is paid what the board and shareholders think is fair. He has turned Disney into an absolute powerhouse. Endgame is about to make $2.5 billion.
Y'all realize we just answered someone's take home essay promt?
Regulation gave birth to the high compensation. The tax code was modified disallowing deductions of CEO salaries > $1M. Companies responded by offering more incentive compensation, including stock based comp. It's a little funny.
Because the average worker isn’t running a multibillion dollar company across several industries and employing thousands. Not sure how you can equate an entry level position with a leader of a company
Let the market decide.