As TAG tussles with the studios over contract wage hikes, and I get told by a Disney Senior Vice President that "times are tough" and we can't expect what the editors, grips and art directors have already secured at the bargaining table, (we're negotiating a contract eight months after them), Rupert Murdoch's Wall Street Journal Magazine runs this bon mot in its July issue:
PAY DAY -- Which CEOs are earning their pay, and which, well, aren't? We weigh in on pay packages that stand out -- for better or worse.
Robert Iger -- The Walt Disney Co. Pay: $30.6 million
Includes: $2 million salary, $13.9 million bonus, $13.7 million in stock and options.
Disney had a record year, with $37.8 billion in revenue, Iger's focus on franchises like the Jonas Brothers has paid off. But does that warrant a $16.3 million bonus? Even Iger may not have thought so: He trimmed $2.4 million off what the board initially approved. That seems reasonable, given Disney's stock was down 30 percent in 2008 ...
-- SMART MONEY, July 2009, p. 20.
See, falling stocks only impact the wages of run-of-the-mill employees, not Top Dogs.
Because corporate boards of directors mostly behave like this ...
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19 comments:
Yeah, times are tough ...
Good to see Bob joining in the severe belt-tightening by knocking off $2.4 million from his $16.3 million bonus.
It's crazy isn't it? I would gladly take the $.3 million for my 12 hour days/6 day weeks!
Playing Devil's Advocate, what would be an "acceptable" pay for the CEO of Disney? Would people complain if instead of 30 million he was paid 15 million? Or 7 million? Or 1 million? Personally, I have no idea what an acceptable amount of money for the position is, but I do know running a company that employs 150,000 people can't be easy. Especially when a bad CEO can ruin the lives of all of those he employs (see: Car Industry), while Iger helped lead Disney to a record year of 37 billion.
Regardless, Disney's "record year" doesn't help them much when complaining about "tough times".
"...Toyota's top executive, Hiroshi Okuda, earned $903,000 in 2006." -- USA Today
"running a company that employs 150,000 people can't be easy"
By that logic, Obama should earn a gazilion bucks.
Managers keep reminding everyone that artists are disposable/replaceable. Well, I happen to think that managers and CEO are replaceable as well. CEO's are not gods, but WE are meant to think they are.
R.
I posted the above comment in response to Anon #3, as an example of what a CEO of a large company can make.
When a CEO makes enough in a single year to live lavishly for the rest of their lifetime, and their children's lifetimes, and their grandchildren's lifetimes, there is zero financial incentive to foster the long-term health of the company. It becomes monopoly money, where each CEO gets in a d**k waving contest with every other CEO about whose package is bigger. It rewards hubris, as we've seen in the financial industry.
It's not about stress or difficulty. You can argue that a CEO who, after a month of work, is set for life, and who can delegate absolutely anything they want, and hire anyone they want, has a far far less stressful and difficult life than the average worker.
Look at the historical multiples of CEO-to-average worker pay. In 1970, the average U.S. CEO at a major company made 28 times the typical worker at that company. Now it's 465 times.
So with Iger making $30.6 million, the average Disney employee should be making (divide by 465) $65,806/year. Hmmm, sounds about right. And if Iger made what CEO's made in 1970 (multiply that by 28), he'd get a paltry, impoverishing $1.84 million a year. God, how could he manage? I mean, that's only 4 times what we pay the president of the United States, and we know how easy that job is.
and again if Disney had "a record year" in terms of earnings how can they expect us to believe them when they hide behind the generic "well, times are tough" posturing ? Whose times are tough ? Their times ? Not a company that had "a record year" and can still afford to pay it's CEO $30.6 million in one year .
The "times are tough" ploy being pulled out to justify why we can't expect to negotiate a good contract with decent wages and benefits rings awfully hollow.
"When a CEO makes enough in a single year to live lavishly for the rest of their lifetime, and their children's lifetimes, and their grandchildren's lifetimes, there is zero financial incentive to foster the long-term health of the company."
Couldn't agree more. I remember working at a technology company and reading in the paper that the head of my division just cashed in a pile of stock options and cleared $30 mil. My first thought was that he no longer had any idea what it meant to earn a living.
Would I have done the same thing in his shoes? Hell yes - the difference is, the only thing the company would have seen of me after that was the back of my head as I walked out the door. This guy stayed around and kept talking as if he needed the job. It was, and is, insulting.
The guy is CEO of one of the largest media companies in the world with a whole LOT of responsibilities. The fact that he decided to reduce his pay is pretty significant amongst CEO's.
http://www.reuters.com/article/governmentFilingsNews/idUSN1736506920090617
AIG's ex-CEO had private jet fly stock to Bermuda
Wed Jun 17, 2009 7:33pm EDT
* Was "angry" at ouster
By Lilla Zuill
NEW YORK, June 17 (Reuters) - The former head of ailing U.S. insurance giant AIG told a court on Wednesday that he had a private jet fly a large block of the company's stock to Bermuda from New York to prevent AIG from seizing it.
Here is my general idea for an appropriate CEO pay:
It should be a calculation based on two things:
1) How has the company's profits and stock price performed over the LONG term (let's say the past 7 years.
2) A multiple of the LOWEST paid worker of the company. If the profits/stock have performed well over the last 7 years, the multiple is high. If profits/performance has been poor, the multiple is (relatively) low.
This would be a good system because the emphasis would be on encouraging long term strategy and growth, rather than short term greed, which is often destructive to the company and its employees. Additionally, it would incentivize the company to pay workers well, because the more THEY make, the more the CEO makes (but not TOO much, because then that would hurt profits/stock price). A good balance.
Under this system, I don't see a need for capping CEO pay. If he/she makes oodles, it's because he's done a good job, AND his employees are partaking in the spoils too.
Require MBAs to serve at least five years in the Peace Corps digging wells and supervised by Greenspan, Paulson, Bernanke, and every other member of the Federal Reserve.
Why is it that none of the bankers who have orchestrated this scheme for the last fifty years haven't been thrown in jail?
the bankers can't be thrown in jail because their buddies and some co-conspirators (like Dodd and Frank) are all in the government.
Dodd and Frank???????
Thanks for enlightening us. How stupid of the rest of us, (and the voting public), for foolishly thinking the Republicans are largely responsible. You know, the party that thinks that any attempt to correct or regulate the system is "Socialism?" The party who believes the "free market" fixes itself. Yes, Clinton also believed it, but what did he know? All he did was create a budget surplus. I guess it was a miracle he managed to do that in spite of Dodd and Frank.
The original post highlighted Bob Iger and his position on giving back some of his salary. it is a noble gesture for any CEO to do that if their company is having economic challenges..
Yes, nice gesture. Nicer gesture: How about assign the give-back to a specific purpose, like creating jobs.
For example: I am currently involved in a company related project that is short-budgeted, short-staffed and short-salaried. A small fraction of that substantial income could work miracles.
Out of $30.6 million, he trimmed $2.4 million off. So now his compensation is $28.2 million.
The idea that this is noble, or something to be applauded, is a wonderful example of how upside-down our world has become. Instead of making 500 times the average Disney employee's pay, he'll make 450 times. It's still obscene, out of balance, and a complete disincentive to foster the company's long-term health.
I'm not saying Bob Iger is a bad guy or that he's not interested in Disney's future, but his pay is, like that of most Fortune 500 CEOs, ridiculous. And his $2.4 million dollar gesture silly. It's as meaningful as all the Detroit CEO's giving up their private jets for their second trip to Washington D.C. and instead showing up in hybrids. BFD. They still don't get it.
Wow!
Either you guys need to run for Congress and try to change the system, or become a CEO yourself so you can do it the "right way".
But stop your bitching. It just makes you all look like a bunch of cry babies who want someone else to fix it for you.
If you are unhappy with your pay, then negotiate better or quit and find a better paying job.
Either become "the man"...or shut up.
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