Bob Iger's Money & The Annual Meeting

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Kristen K.'s picture
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Bob Iger's Money & The Annual Meeting

I posted a piece that I wrote this week about the Disney Shareholders meeting this year, in which I said I thought that it should be fairly routine and stress free. However the Wall Street Journal is now predicting quite a bit of drama from the hedge funds that are asking to separate the Chairman/CEO jobs.

Amongst the issues they have is apparently Bob Iger's pay package. From my understanding, roughly 92% of Bob Igers pay package is incentive based according to the 2013 annual proxy report. What that means is the better the company does, the bigger his bonus is. I don't think that's an bad work model personally. It provides a reason for Iger to do everything he can, because the more successful the company is, the more successful he is. That incentive pay is part of his contract with Disney, yet it needs to be approved by the board yearly. Over the past year Disney's profits have soared and financially the company over the past three years has been doing VERY well under his guidance. What that means is that Bob Iger should be racking in a GIGANTIC chunk of change in his incentive based pay. Personally as a shareholder, I have no problem with that. My annual dividend was three times greater than ever before. You go Bob!

However, two to four large pension funds are urging large shareholders to vote in favor of a shareholder proposal to separate the roles again, and to vote against "the advisory vote on compensation."

WHY? Iger is doing his job, shouldn't he get paid. We're not talking about a man who is taking crazy amounts of money out of a failing company. We're talking about a guy who has lead the company into record years. Should he not get his share of the record profits?

Whether you are a shareholder or not, what do you think about this? How do you feel Bob Iger is doing for the company? If you take away the profits, is he still a good leaders? Has he preserved and grown the legacy left behind by Uncle Walt? Tell me what you think.

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I think Iger has done a wonderful job with Disney. He has made the brand not only stronger, but also able to withstand the devastating swings in the economy and the stock market.

One can tell that he cares about the Disney brand, and not just to make money. He went out of his way to get back Oswald the Lucky Rabbit, simply out of the sentimental value that it was Walt's. No CEO that only cares about the bottom line would do something like that.

I'm just sorry that he will leave the CEO post soon.

Zz.

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The Colonel's picture
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I've wondered why Disney Parks seems to be keen on building huge projects and making billion dollar purchases but they seem reluctant to keep up the maintenance and cleaning standards that they themselves have established in the past.

When compensation and the the success of the company is based on earnings and stock price solely, it leads to certain practices that may not be in long-term best interest of the company. It's better for the bottom line to let a ride deteriorate until it almost falls down, then do a complete refurb. Maintenance is an expense. Capitalization looks better on the financial statements. It's also much sexier on Wall Street to announce a big project like Avatarland than to fix The Tree of Life or Splash Mountain. This may be a major reason why routine maintenance and cleaning has fallen off. This applies not just to Iger, but to all Disney executives getting incentive pay.

Of course the parks are a minor component of Disney income these days. But I still think its an important part of the whole Disney cache and mystique. No doubt Iger has been good for the stockholders though. The Pixar deal was a coup.

His compensation is insane.

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Allie's picture
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The Colonel wrote:
I've wondered why Disney Parks seems to be keen on building huge projects and making billion dollar purchases but they seem reluctant to keep up the maintenance and cleaning standards that they themselves have established in the past.

When compensation and the the success of the company is based on earnings and stock price solely, it leads to certain practices that may not be in long-term best interest of the company. It's better for the bottom line to let a ride deteriorate until it almost falls down, then do a complete refurb. Maintenance is an expense. Capitalization looks better on the financial statements. It's also much sexier on Wall Street to announce a big project like Avatarland than to fix The Tree of Life or Splash Mountain. This may be a major reason why routine maintenance and cleaning has fallen off. This applies not just to Iger, but to all Disney executives getting incentive pay.

Of course the parks are a minor component of Disney income these days. But I still think its an important part of the whole Disney cache and mystique. No doubt Iger has been good for the stockholders though. The Pixar deal was a coup.

His compensation is insane.

I do agree with Colonel on this point. My only argument against such an incentive focused salary is it stands to reason that it could encourage more focus on short term successes then a long-term focus. I whole heartedly agree that Iger should be justly paid for his efforts, but as a non-shareholder I care more about Disney's broad strategy and that it stays strong and stable for a long time then I care about how it does financially one year over another.

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I'm glad somebody agrees with something I say. I was beginning to think my wife is right about me. yay

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