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Why Disney CEO Makes $47 Million

Disney Logo
courtesy of the Walt Disney Co.
The Walt Disney Co. (NYSE: DIS) filed a Schedule 14A definitive proxy statement after markets closed on Friday. The company’s annual meeting is scheduled for March 12, and one of the items on the agenda is consideration of an advisory vote by stockholders on proposed executive compensation. Given that CEO and Chairman Robert Iger is about to collect $46.5 million in compensation for 2014, this might be a good time for shareholders to consider advising the board on compensation. Iger has been chief executive officer since 2005 and chairman of the board since 2011.

Iger’s total compensation includes $22.8 million in non-equity incentives (that is cash to you and me) based on “extraordinary creative successes” for Disney’s animated feature “Frozen” and its Guardians of the Galaxy franchise, among other things. Just 8% of Iger’s total compensation in 2014 was based on his fixed salary of $2.5 million. Of the remaining portion, 40% is derived from annual performance and 52% is paid over the longer term in stock options and other performance-based units.

Since Iger took over as chairman, Disney’s revenues have risen from about $41 billion to about $49 billion and net income is up from $5.26 billion to $8.0 billion. Dividends have nearly tripled, from $0.40 per share to $1.15, although the dividend yield is still just 1.2%.

Among the 30 stocks on the Dow, Disney is the fifth-best performer so far this year, up a bit more than 1%. Over the past 12 months Disney’s stock is the fourth-best performer on the Dow, up nearly 29%.

The four other named executives in Disney’s proxy statement are the chief financial officer, the company’s general counsel, the executive vice-president of corporate strategy and business development, and the executive vice-president in charge of human resources. All earned total compensation of more than $5 million in 2014, but Iger’s pay was worth more than double the next closest executive’s.

The stock closed up about 0.9% at $95.18 on Friday, in a 52-week range of $69.85 to $96.43.

ALSO READ: The Bullish and Bearish Case for Walt Disney in 2015

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