Abigail Disney finds Bob Iger's pay absurd

Posted Monday, April 22, 2019 6:33 PM | Contributed by BrettV

From the article:

“Pointing out the incongruity of pay at the top and pay at the bottom provokes a reaction because it so violates of our innate sense of fairness it is impossible not to wince,” Disney wrote. She argued that it was not enough simply to pay above the federal minimum wage of $7.25 — a figure, she said, that is “too low to live on.”

Read more from The Washington Post.

Monday, April 22, 2019 6:47 PM

I admit, I chose that particular quote above because getting into issues about what's "fair" in this manner really bothers me. It completely casts aside that being a person who can successfully run a $230 billion company is insanely different from being a person who does a job that is very nearly interchangeable with any other basically functional human. Is $65 million excessive? I don't know... how do you price the service of running a company worth the GDP of a medium-sized country?

Furthermore, paying a CEO a high wage and paying line workers more are not mutually exclusive choices, even though critics frequently present them as an either-or proposition, further demonizing the leaders. Intent matters, too. The far lefties paint the arrangement as an effort by the rich to keep the little people down.

This is not to say that the taxation system isn't broken, because it certainly is. The GOP keeps increasing the deficit with tax cuts for top earners, which makes no sense. Not only did I pay $0 in federal income tax last year, but the feds paid me $1,400 for having a child. That's messed up, but it's a different problem than paying a CEO what still amounts to less than 1% of the company's revenue.

+2Loading
Monday, April 22, 2019 10:41 PM

I can see both sides of the argument but Iger's pay doesn't really seem that excessive. He has a special sets of skills in order to run a behemoth that is Disney. People that have special skills are paid handsomely and fawned over. How much do top tier athletes get paid every year? Floyd Mayweather cleared $275 million last year for ONE fight.

Disney pays their workers at Disneyland $15 per hour. Doing the quick math of $15 / hour, a 40 hour work week, and roughly 50 weeks a year (figuring two weeks vacation, call offs, etc.) translates to $30,000 per year. That doesn't sound like much, and it isn't, but again you don't need a high school diploma for certain positions. In contrast the average elementary school teacher in the US makes roughly $43,000 their first year of teaching. That's after earning a bachelor's degree to be eligible to teach.

+0
Tuesday, April 23, 2019 10:02 AM

Mulfinator said:

roughly 50 weeks a year (figuring two weeks vacation, call offs, etc.)

Disney doesn't have paid sick time or vacations? And $30k/year (and that's gross pay; take out taxes and insurance) is nothing, no matter where you live (and definitely not in the LA area).

+0
Tuesday, April 23, 2019 11:22 AM

If $15/hr isn't enough, what should it be?

+0
Tuesday, April 23, 2019 12:07 PM

This is a complex one.

I don't know what's warranted or not regarding Iger, but yes he is responsible for a lot of individuals and their respective wealth generation. It is also important to note he works for shareholders (mostly "rich" themselves) and not the public or his employees. That's the game.

What is more troubling to me than the individual figure is the broader ratio. Consider the following broader trends from Forbes:

  • In the 1950s the average CEO made 20 times the salary of his or her average worker. Last year that number for S&P 500 firm CEOs was 361 times the average.
  • Adjusted for inflation, average wages in the US have basically stagnated for 50 years while average CEO pay has grown by 1,000 percent.

I agree with Jeff that higher taxes for the wealthy (individuals and corporations) undoubtedly need to be a part of the solution. Another key part is providing public services that allow the lower class to climb. Not necessarily "free college for all" but free pre-K education and better healthcare would go a long way toward unlocking some of the barriers while still rewarding hard work and risk.

But back to the ratios above -- if this country wants to have any sort of middle class, we need to figure out how to create more structural balance and stability. Currently we're headed toward an increasing disparity from those at the top and those at the bottom. History and a review of some other nations around the world tell us that's not a place we want to be, even if you're rich.

I have worked extremely hard in my career and benefitted significantly from the current system. I absolutely think I should be rewarded for it, but given the disparity trends I tend to lean toward measures to create greater balance, if only to keep the volcano from blowing its top. This isn't about creating a revolution, this is about preventing one. I wish more of the wealthy would see it that way.

+0
Tuesday, April 23, 2019 12:24 PM

$30,000 gross is too little? I moved to NC as a foodstamp and Medicaid caseworker making $31000 a year and was set. I could absolutely leave off $30k a year if I needed to. Do I want to make $30k? No, and I don’t, but to say that’s too little for a non-specialized job I have to disagree with.

+0
Tuesday, April 23, 2019 1:04 PM

Jetsetter said:

It is also important to note he works for shareholders (mostly "rich" themselves) and not the public or his employees. That's the game.

This is only half true, but more importantly, the stock market is not a secret club. Anyone can open an account and buy some mutual or index funds right now. You can start dumping $20 into an IRA a month, if that's all you can afford.

Also, I'm with you in that I don't buy in to the "free college" bandwagon, but I do for healthcare. I also fundamentally understand the historic consequence of severe imbalance, but I don't like any of the solutions suggested, as most vilify the rich. I don't care for the right scapegoating brown people any more than I do the left scapegoating the wealthy.

Last edited by Jeff, Tuesday, April 23, 2019 1:07 PM
+3Loading
Tuesday, April 23, 2019 1:19 PM

Jeff said:

I admit, I chose that particular quote above because getting into issues about what's "fair" in this manner really bothers me. It completely casts aside that being a person who can successfully run a $230 billion company is insanely different from being a person who does a job that is very nearly interchangeable with any other basically functional human. Is $65 million excessive? I don't know... how do you price the service of running a company worth the GDP of a medium-sized country?

Furthermore, paying a CEO a high wage and paying line workers more are not mutually exclusive choices, even though critics frequently present them as an either-or proposition, further demonizing the leaders. Intent matters, too. The far lefties paint the arrangement as an effort by the rich to keep the little people down.

This is not to say that the taxation system isn't broken, because it certainly is. The GOP keeps increasing the deficit with tax cuts for top earners, which makes no sense. Not only did I pay $0 in federal income tax last year, but the feds paid me $1,400 for having a child. That's messed up, but it's a different problem than paying a CEO what still amounts to less than 1% of the company's revenue.

I try to stay cognizant that the Board of Trustees owe fiduciary duties to the organization and its shareholders. "Reasonableness" is a legal term of art and it is possible for shareholders and the Trustees to determine how much is "too much." Executive wages and benefit packages are not just political issues, they're legal issues (and I would argue ethical issues). I think there could be a case to be made that the Board of Trustees have breached their fiduciary duty to the shareholders by approving such an exorbitant pay and benefit package.

Last edited by urumqi, Tuesday, April 23, 2019 1:22 PM
+0
Tuesday, April 23, 2019 1:34 PM

There was talk a while back (15-20 years ago or so) about certain groups (pension funds, mutual funds, activist shareholder groups, etc) putting pressure on reasonableness of exec comp. Idea was it isn't necessarily the case that compensation packages are fully negotiated at arms length. Boards/comp committees don't always negotiate the business terms much. I don't recall those efforts really going very far. And looking at exec pay, there haven't been a lot of changes in the trend. Ultimately premium in the last 60-70 years is on skill with de-emphasis on unskilled.

If you think college is expensive now, wait until its "free." Basic economics provides that if you subsidize something, you will get more of it and its price will increase.

+0
Tuesday, April 23, 2019 3:49 PM

Yeah, but that might not be the most logical fear there. College is free in Norway, but only 35% of adults have a degree. It's 32% in the US. What's different here is that we've created a cultural expectation that college = success and prosperity, which is not great, but I wonder how that would affect enrollment.

+2Loading
Tuesday, April 23, 2019 6:49 PM

As much as the stock market is "open to all" it's really not. You have to have "spare" money to really benefit from investing. Maybe it's just the nature of capitalism, but it takes money to make money. There's a super strong correlation between entrepreneurship and having rich parents.

+1Loading
Tuesday, April 23, 2019 7:06 PM

The issue I have with "free" health care is our government. How can we hand them millions (billions?) of dollars every year and expect anything different from what they have done with our social security/public schools/any government ran program? I would rather see HSA accounts or something similar that i can control and not the government

That is why CEO's get paid so much too. They have to take a business and squeeze every nickel and dime out of it, if they get caught wasting money they are out of a job..

Last edited by Dale K, Tuesday, April 23, 2019 7:13 PM
+0
Wednesday, April 24, 2019 12:22 AM

Corporations are people, right?

And people pay taxes, right?

No. Only the poor (relatively speaking) pay taxes.

This is part of the reason why you'll go bankrupt if your child gets cancer...but hey, at least your new blender arrived in 2 days.

Last edited by OhioStater, Wednesday, April 24, 2019 12:25 AM
+1Loading
Wednesday, April 24, 2019 12:28 AM

Yeah, but that might not be the most logical fear there.

Not sure how Norway handles college but certain countries in Europe effectively limit who can go. Doesn't matter that its free because only certain kids will go. Doubt anyone proposing making 4 year college tuition free in US is expecting enrollment/graduation rates to go down or even stay the same. Expectation is there will be more of both. And decreasing the price by making it free will increase demand. There will be schools willing to increase numbers of students to increase revenues (and some public colleges are not operating at capacity now).

And because students/families will not be paying the tuition, there will be less interests in costs. Why will they care what tuition costs or how fast it increases if they are not paying for it?

All of that will put upward pressure on prices. Absent some type of price fixing.

+0
Wednesday, April 24, 2019 6:34 AM

We did this quick bit of math about that Chase CEO vs poor employee video making its way around Facebook... But if Iger equally distributed his $65M salary amongst the 201,000 Disney employees, that works out to $323.38 per employee per year. I don’t think that’s gonna solve very many budget issues for folks who can’t live off the $30,000 mentioned above.

Last edited by ShaneDenmark, Wednesday, April 24, 2019 6:36 AM
+3Loading
Wednesday, April 24, 2019 8:35 AM

Tekwardo said:

$30,000 gross is too little? I moved to NC as a foodstamp and Medicaid caseworker making $31000 a year and was set. I could absolutely leave off $30k a year if I needed to. Do I want to make $30k? No, and I don’t, but to say that’s too little for a non-specialized job I have to disagree with.

That's NC, not Los Angeles. Things are much more affordable in NC. $30k/yr in NC isn't the same as that in LA.

+0
Wednesday, April 24, 2019 10:56 AM

Yes, but...

yawetag said:

And $30k/year is nothing, no matter where you live.

+3Loading
Wednesday, April 24, 2019 11:38 AM

There are better solutions to fixing the "college problem" (let's just call it that) than using free college as a campaign slogan.

If you start at a fundamental level, let's work on shedding the belief that college is for everyone and a necessity. While my employer will happily take the tuition dollars of every able body who wants to sign up, it's frankly sad to watch those who clearly have no business being here (either due to lack of ability, or interest, or both) just struggle mightily and all too often drop out after a number of years and a significant financial investment with nothing to show for it. At the very least, let's work on shedding the belief that college is something that has to happen right away after graduating from high school. It doesn't, and there are valuable (i.e. work?) things one can do if one is unsure or unprepared.

Second, let's try to remove some of the stigma around going to a community college to get started. College does not have to send you in a vortex of unending debt. It can, for sure, but this is an option I see many people turn their noses up at because it is seen as "less than", when in reality there are some really solid CC's out there that pay off as a great investment when making the transition to a traditional 4-year university.

Third, let's toss anyone who starts something like "Trump University" in jail. Oh wait...

And last but not least, we could go a long way towards reducing the burden of student loan debt by forever reducing the interest rate to something minimal. The rate on my student loan (just due to timing of when I graduated) was over twice the rate on our first mortgage. There is no reason for this at all, as the government should view a student loan as an investment in society's future.

We don't need "free college". We need to change they we think about college, and a government that puts education (as a whole, not at just the college level) as a priority.

Last edited by OhioStater, Wednesday, April 24, 2019 11:41 AM
+6Loading
Wednesday, April 24, 2019 11:46 AM

Adam Carolla through out an idea on his podcast in response to Bernie Sanders wanting to tax the rich by 52% that I thought was interesting: instead of a higher tax on "the rich" (CEOs of major companies in the case of this discussion), why not compel these people to pass their high earnings down to their employees? If we're all concerned about the income gap, then how about we address it directly rather than giving all that extra money to the government and letting the politicians decide whom to give it to? Maybe you implement a higher tax on the rich but then offer incentives like write-offs or tax credits, so that a CEO can reduce his or her tax burden by increasing the company's total compensation for its employees.

+0

You must be logged in to post

POP Forums - ©2019, POP World Media, LLC
Loading...