Democratic Sen. Elizabeth Warren of Massachusetts has sharply attacked Walt Disney Co. over its plans to lay off 28,000 workers, accusing the company of prioritizing executive pay and shareholder interests over the needs of rank-and-file employees, it was reported Thursday.
The senator and former candidate for the Democratic presidential nomination sent a letter Wednesday to Disney Executive Chairman Bob Iger and Chief Executive Bob Chapek, challenging the company’s decision to cut staff in response to the ongoing COVID-19 pandemic, the Los Angeles Times reported.
“It appears that, prior to, and during the pandemic, Disney took good care of its top executives and shareholders, and now is hanging its front-line workers out to dry,” Warren wrote, according to The Times.
Disney called Warren’s letter “misinformed” and said it contained “a number of inaccuracies” but did not go into detail, according to The Times.
In April, Disney furloughed more than 100,000 of its 223,000-person global workforce and continued to pay health benefits to those employees who were put out of work.
Josh D’Amaro, chairman of Disney’s parks, experiences and products segment, called the decision to ultimately begin layoffs “heartbreaking” in a memo to staff, saying it was “the only feasible option we have in light of the prolonged impact of COVID-19 on our business.”
Still, Warren, a frequent and vocal critic of big business and corporate excess, hit Disney for providing executives with “hefty compensation packages” and paying billions in shareholder dividends.
“In the years leading up to this crisis, your company prioritized the enrichment of executives and stockholders through hefty compensation packages, and billions of dollars’ worth of dividend payments and stock buybacks, all of which weakened Disney’s financial cushion and ability to retain and pay its front-line workers amid the pandemic,” wrote Warren, according to The Times.
Early in the lockdown, Disney slashed executive pay to save money, cutting salaries by at least 20% for employees at the vice president level and up. Iger said he would forgo his $3 million annual base salary, while Chapek took a 50% cut to his $2.5 million base compensation.
Warren said in her letter that executive pay has since been restored to pre-pandemic levels. She also noted that the bulk of top-level executive compensation comes from bonuses and stock awards, not salary, The Times reported. Iger’s total compensation was $47.5 million for fiscal 2019, including cash and stock.
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