WASHINGTON — One of the things you might have heard about during the pandemic is CEOs of major companies cutting their salaries. But how much of a difference does that actually make for the company?
The answer isn’t too surprising.
Let’s use The Walt Disney company as the prime example. Former CEO Bob Iger announced this week he would forgo his entire salary because of this crisis, while recently named CEO Bob Chapek would take a 50 percent cut to his base salary.
However, the majority of CEO pay comes from sources other than base salary and they typically make a lot more than an average company employee.
Iger, for example, made $47.5 million in the last fiscal year; his base salary was $3 million. Chapek’s base salary is $2.5 million.
But for a global power like Disney, CEO salaries are a drop in the bucket. Don’t forget it already closed its theme parks, suspended cruises, and delayed the release of some of its movies.
Meanwhile, Disney has promised to pay its cast members and hourly workers at its parks and resorts through April 18, 2020.
Additionally, the company took on $6 billion in debt to offset some of the lost revenue from all the closures. According to Forbes, Disney could lose $13 million a day from the closure of its parks and resorts.
But in the grand economic scheme, CEO pay cuts are mostly symbolic for massive companies. It’s a gesture meant to show that everyone is affected.
Regardless, as employees across industries continue to get laid off, the executive pay cuts are highlighting some of the differences between those at the top and those below.
