UPDATE (5:45pm): Disney has issued a response. Our original story continues below.
In a letter directed to Disney Executive Chairman Bob Iger and Disney CEO Bob Chapek, Senator Elizabeth Warren inquired about how the top executives at The Walt Disney Company were treated financially since the start of the COVID-19 pandemic with the news that 28,000 Cast Members would be laid off. The full letter is available on Warren’s website, but in the letter she expresses concern over the recent layoffs that occurred after the reported restoration of executive pay. While the executive pay restoration reportedly occurred back in August, The Walt Disney Company was aware of the financial strain COVID-19 would have on their theme parks and staffing levels after seeing a lack of demand at an open Walt Disney World.
Disney Parks Chairman Josh D’Amaro noted that the layoffs were due to the “prolonged impact of COVID-19 on our business, including limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic – exacerbated in California by the State’s unwillingness to lift restrictions that would allow Disneyland to reopen”.
Warren notes that Disney has paid out billions of dollars worth of stockholder dividends in the years leading up to COVID-19, which she says weakened Disney’s position to pay frontline workers during the pandemic. In fiscal 2018 and 2019, Disney paid $5.4 billion in dividend payments to shareholders. In the three years leading up to the COVID-19 pandemic, Disney paid the top 20 executives at the company more than $338 million in total compensation.
Warren notes that Chapek was quoted as saying that “Our ability to do good in the world starts with our Cast Members…who create magic every day. Our commitment to them will always be our top priority”. Warren notes that Disney has taken good care of their executives and shareholders while recently leaving the frontline Cast “out to dry”.
To end the letter, Warren asks a series of questions as it relates to layoffs, executive compensation, and shareholder dividends.
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