Disney’s budget cuts and mass layoffs are anticipated to continue in 2024. However, CEO Bob Iger walked away from 2023 with a salary of $31 million, raising scrutiny over the growing disparity between CEO and average employees’ wages.
This isn’t the first time that Iger’s salary has come into question. While writers and actors were forced to strike for job security, livable wages, and safeguards against AI, Disney was among the greedy studios within the Alliance of Motion Picture and Television Producers refusing to negotiate with them. Additionally, Iger had the gall to label the writers’ and actors’ demands as “not realistic” and “disturbing,” even though his estimated yearly salary as CEO was a whopping $27 million.
Iger’s statements demonstrated just how out of touch with reality CEOs with inflated salaries are. He seemingly couldn’t comprehend the average worker’s situation because he was comfortable at Disney with his hefty, nearly $30 million annual salary. Iger’s salary sounds just fine to him, yet the idea of a worker earning enough to afford groceries is apparently scary. Although the strikes did end with the actors and writers receiving satisfactory new contracts, the woes of Disney workers might not be over yet.
Bob Iger’s salary revealed alongside reports of impending Pixar layoffs
It was recently reported that Iger’s overall compensation for the 2023 fiscal year topped $31 million, which is even more than estimates predicted during the strikes. Granted, a large portion of Iger’s (and many CEOs’) salaries is stock and option award values rather than cash. Still, his base salary was already a handsome $865,000. It is estimated that Iger also received at least $2.1 million in bonuses, plus over $26 million in stock and option awards. Essentially, on top of already high salaries, CEOs have many performance incentives, allowing them to often balloon their compensation value to tens of millions of dollars. However, offering stock-option awards is a little controversial since it can encourage risk-taking and make CEOs opportunistic.
Meanwhile, just days before Iger’s hefty compensation figures were released, Deadline reported that Disney is considering more layoffs at Pixar. Last year, the company underwent multiple rounds of layoffs, ultimately cutting thousands of jobs. Now, an unconfirmed report suggests that the next layoffs could cost Pixar up to 20% of its workforce. The layoffs would be part of Disney’s continued aggressive cost-cutting efforts as the studio faces disappointing box office returns and pressure to elevate its stock price.
Iger is far from the only CEO earning salaries that are, quite frankly, ridiculous amounts. If we’re including stock grants and options, the average salary of CEOs of the largest U.S. firms was $27.8 million in 2021. Meanwhile, the average CEO pay ratio to that of the average worker is a shocking 399 to 1. This ratio has deteriorated terribly in recent years, considering it was 20 to 1 in 1965. In 2022, ex-Disney CEO Bob Chapek earned $24 million, while the average employee made $54,256, resulting in a CEO-to-employee pay ratio of 446 to 1. Given that Iger’s salary is even more than Chapek’s, the divide between CEO and employees probably grew larger in 2023. UPS, Netflix, General Motors, and Starbucks are just a few other companies that boast similarly startling CEO-to-employee pay ratios.
The average worker’s salary in the United States rose a modest 18% between 1978 and 2020, while the average CEO salary rose 1,322%. For comparison, CEO pay rose over 18% from 2019 to 2020 alone. It goes without saying that the average worker’s pay is not keeping up with the average CEO’s pay. These numbers are even more concerning when we think about how the average worker is struggling to keep up with the rising cost of living. Shouldn’t it be a priority to at least get the average employee up to a livable wage before needlessly piling even more money on CEOs? CEOs like Iger would perhaps be more sympathetic and aware of their employees’ needs if they were at least somewhere close to being on the same level. Instead, the wage disparity basically means CEOs and employees live in entirely different worlds.
(featured image: Michael Kovac, Getty Images)
