As the largest entertainment company in the world, the Walt Disney Co. (DIS) comes with the accompanying high executive salaries or, in the case of outgoing ones, exit payments -- during the 15 years that he spent leading the company, chief executive Bob Iger reached a net worth of around $350 million.
Late on Sunday night, Disney rocked both fans and shareholders when it announced that Iger would come out of retirement to replace his successor, Bob Chapek.
While Chapek led Disney during a tumultuous period of covid-related park closures and political battles with Florida Gov. Ron DeSantis, the board ultimately ruled that Iger was the best choice to lead the company "through this pivotal period."
Just How Long Do I Have To Work To Earn Iger's Annual Salary?
According to documents filed Monday to the Securities and Exchange Commission, Iger's role comes with a $1 million annual salary, a $1 million bonus and $25 million in stock options -- for a total value of $27 million annually or a grand total $54 million at the end of the two-year contract ending Dec. 31, 2024.
While this is money that even many wealthy people will never see, the salary is actually less than what Iger would make before retiring -- he earned $47.5 million in 2019 and $65.6 million in 2018.
Also, Chapek is not leaving the role without a hefty payout. The outgoing CEO earned $32.5 million in 2021 and, according to calculations by Bloomberg News, will receive at least $23 million going out. That includes $16.9 million in pension and $3.5 million in stock options.
As a shareholder, Chapek could also end up significantly wealthier if Disney's stock goes up during Iger's tenure. Disney shares fell Monday, ending the day down 1.4% to $96.21. The stock is down almost 38% so far this year.
Iger's salary, lower compared to what it was in 2018 and 2019, reflects certain pay equity pressures faced by the company.
In 2019, a tweet by Abigail Disney, grandniece of Walt Disney went viral after criticizing the $65.6 million salary received by Iger.
What Will We See During Iger Era 2.0?
"This growth in inequality has affected every corner of American life," Abigail Disney wrote in an opinion piece for the Washington Post, referring to an Equilar calculation that Iger made 1,424 times the median pay of a Disney employee. "We are increasingly a lopsided, barbell nation, where the middle class is shrinking, a very few, very affluent people own a great deal and the majority have relatively little."
At the time, Walt Disney Co, justified the salary by pointing to Iger's leadership: He is widely believed to be one of the most successful CEOs in the company's history after overseeing acquisitions of Pixar, Marvel, and Lucasfilm as well as closing the $71 billion 21st Century Fox deal in 2019.
Chapek has also been heralded during his time at the helm but Iger's past track record is leading many shareholders to put a lot of hope in him even as he steps in when the company is in a very different place from when he left.
"There are still plenty of questions on investors' minds," Ed Ponsi wrote of Iger's return for TheStreet's RealMoney. "Will Iger revamp Disney+? The Disney streaming division, which includes Disney+, ESPN+ and Hulu, lost $1.5 billion last quarter. How will Iger prepare Disney's theme parks for a potential recession in 2023? When it comes to franchises such as Marvel and Star Wars, what is the optimal mix and amount of content?"
