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Disney Still Awards Bonuses
01/15/02
By: Robert Johnson, OrlandoSentinal.com
Despite Walt Disney World’s lingering attendance slump and continuing cutbacks in hourly workers’ schedules, some executives received annual bonuses last week that ranged from $25,000 to $30, 000 each.
The bonuses were paid to some general managers and vice presidents, say Disney World employees who asked to remain anonymous for fear of their jobs.
Bill Warren, a Disney World vice president, acknowledged that bonuses were paid to certain executives, but he would not confirm details. He said the bonuses were approved by the Walt Disney Co. board of directors.
“They base their decision on business results, and it is part of a strategy to recruit, retain and motivate our talent,” Warren said.
He would not confirm an estimate by Disney World insiders that about 75 executives usually receive bonuses, or that the amounts received by some last week were about 40 percent lower than those paid last year.
“The information you have received is inaccurate and misrepresents executive compensation at Walt Disney World, “ Warren said. But he would not offer his own figures or say specifically which numbers provided by Disney World insiders he disagrees with, saying: “The specifics of compensation are proprietary.”
Chris Castro, a Disney spokeswoman in Burbank, Calif., would not comment when asked whether vice presidents of other company operations, such as Disneyland, also received bonuses.
Compensation experts estimate that about75 percent of public companies in the United States will pay bonuses for 2001 to at least some executives.
Still, as word of the bonuses spread through the ranks of hourly workers, some were dismayed.
“The lower-level people are the ones who could least afford to lose pay after September 11, and we still aren’t back to our normal 40 hours a week,” a 10-year veteran hourly worker said. “For higher-ups who haven’t lost pay to get bonuses doesn’t seem fair.”
Hours for some full-time Disney World workers were trimmed after Sept. 11. The dramatic slowdown in travel after the attacks followed a summer that was already a slow one for much of Central Florida’s tourism industry.
The Disney World bonuses were paid Thursday. Earlier this month, the entertainment giant said in a filing with the Securities and Exchange Commission that neither Chairman Michael Eisner nor President Bob Iger would receive bonuses for the year 2001. Both Eisner and Iger received salaries of $1 million in 2001.
Disney’s SEC filing didn’t discuss bonuses paid below the corporate level, and the company isn’t required to by federal law.
The Disney World bonuses extended all the way down to the general managers who supervise such operations as the attraction’s water parks: Typhoon Lagoon and Blizzard Beach, according to the employees who asked for anonymity.
Such bonuses, even in tough economic times, are good corporate policy, said Judith Fischer, managing director of Executive Compensation Advisory Services in Alexandria, VA. “A company that doesn’t give executives bonuses isn’t giving them incentives to dig out.”
Fischer said that Disney World’s downturn, which has included sharply lower attendance, the closing of some restaurants and resorts and the delay of some expansion plans, shouldn’t preclude bonuses to top individual performers. “You have to keep talent on board. There’s a market for top talent, even now.”
“It’s a sad comment on the business world, but hourly workers can be replaced,” she said.
But Paul Dorf, managing director of Compensation Resources, Inc., a New York-area firm, disagreed.
“I happen to be a believer that management should set an example,” Dorf said. “If low-level employees are taking less money, executives should too – and definitely not bonuses.”
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