Disney Drops CEO’s Salary, Shakes Up Board

Walt Disney Co.’s proxy filing with the Securities and Exchange Commission shows sizable salary drops for Disney’s top brass, plus the exit of two high-profile members of its board of directors: Facebook Inc. Chief Operating Officer Sheryl Sandberg and Twitter Inc. Chief Executive Jack Dorsey. The Jan. 12 statement showed that Disney Chief Executive Bob Iger will earn $36.3 million for 2017. The 17 percent year-over-year decline in his salary signifies the smallest compensation package Disney’s top executive has received since 2013. By comparison, Burbank-based Disney’s stock declined about 1.3 percent during 2017. It closed Jan. 17 at $111.97. However, Iger – whose contract runs through 2021 – stands to gain with Disney’s recently announced $52.4 billion acquisition of 21st Century Fox assets. He will receive 245,098 shares of Disney stock as part of the deal. Moreover, after overseeing Disney’s absorption of Fox, Iger will be entitled to an additional 687,898 performance-based shares that will vest in 2021. Video competition The proxy filing also revealed that on March 8 at Disney’s annual shareholders’ meeting, Facebook’s Sandberg and Twitter’s Dorsey will not seek re-election. “Given our evolving business and the businesses Ms. Sandberg and Mr. Dorsey are in, it has become increasingly difficult for them to avoid conflicts relating to board matters,” Disney said in a Jan. 12 statement. One area where competition has surfaced is sports broadcasting. Key deals by Twitter and Facebook – with the NFL and digital sportscaster Stadium, respectively – began challenging Disney-owned ESPN in 2017. This online video nips at Disney’s bottom line as the studio soon yanks its content from Netflix to offer exclusively on a Disney streaming service beginning 2019. “We’re going to be looking at more direct-to-consumer opportunities for our company,” Iger told Bloomberg in December. “And if that requires us to wean the businesses of [Fox] relationships with other distributors, then that’s what we’ll do. Just as we did with Netflix.” In December, Disney appointed two non-competing technology executives to its board: Safra A. Catz, co-CEO of software giant Oracle Corp.; and Illumina Inc. leader Francis A. deSouza. Based on the proxy statement, it appears the board will shrink from 12 members to 10 when Sandberg and Dorsey exit. Also reported in the proxy is the exit of former Starbucks Corp. Chief Executive Orin Smith, 75, as lead independent director; and former Seagram Co. Vice Chairman Robert Matschullat, 70. Both will not be eligible for re-election because of board term and age limits.