With Stock Options, Eisner Is Disney’s $40-Million Man
Walt Disney Co. Chairman Michael D. Eisner, who led his company to record profits in 1988, earned $40.2 million last year, mainly in profits from a stock option plan. The compensation, detailed in a regulatory filing, is the second highest for any U.S. executive whose pay is publicly disclosed.
The 46-year-old executive’s $750,000 base salary was unchanged from 1987. But he realized a $32.6-million profit from the company stock options program last year and was paid a $6.8-million performance-based bonus for the fiscal year ended Sept. 30, 1988, according to Disney’s proxy statement. In 1987, Eisner’s bonus was $6 million.
Excluding the profit from the sale of his Disney stock, Eisner’s fiscal 1988 compensation would place him 16th on a list of the nation’s 25 highest-paid executives at publicly traded companies, according to a survey of 1987 salary levels published last May by Business Week magazine.
Eisner, however, was one of two executives in the Business Week survey whose profits from stock options were not included because the options had not been exercised at the time of the survey. Including such compensation would make Eisner the second highest-paid U.S. executive in the Business Week survey, behind Charles Lazarus, the 64-year-old chairman and founder of Toys R Us, who received $60 million in 1987. Like Eisner, most of Lazarus’ compensation came from exercising stock options.
Eisner made 53% more than the next highest paid executive, Jim P. Manzi, the 36-year-old chairman of Lotus Development Corp., who received $26.3 million in salary, bonus and stock options in 1987.
Eisner’s lucrative stock purchase program granted him options to purchase about 2 million shares for $14.54 each. He has been allowed to exercise 20% of those options annually and has purchased a total of about 1.6 million shares over the past four years. In trading on the New York Stock Exchange, Disney stock closed Tuesday at $68.50.
The proxy material disclosed that Eisner purchased 683,857 shares of Disney stock last year. Based on the market price of the shares at that time, Eisner realized a paper profit of $32.6 million. He still holds options to purchase an additional 948,143 shares, representing an additional paper profit of about $50.5 million.
Eisner now holds 353,467 Disney shares directly, or less than 1% of the outstanding shares. His wife and children hold an additional 28,800 Disney shares.
Under Eisner’s leadership, Disney has enjoyed a string of hit movies and increased revenues at its theme parks. In the wake of this strong performance, Eisner’s total compensation has grown nearly 27-fold since he joined Disney in September, 1984, when he received a one-time payment of $750,000 in addition to his $750,000 base salary.
Raymond Watson, Eisner’s predecessor as chairman for 16 months, received total compensation in his final year of $1.96 million.
WHO MAKES THE MOST MONEY
Walt Disney Co. Chairman Michael D. Eisner, right, earned $40.2 million in 1988, apparently making him the country’s highest-paid executive. His $750,000 base salary was unchanged from 1987, but he realized a $32.6-million profit from the company stock options program last year and was paid a $6.8-million, performance-based bonus for the fiscal year ended Sept. 30, 1988, according to a company proxy statement.
1987’s Top 10 Highest-Paid Executives
1987 salary Long-term Total and bonus compensation pay (figures in thousands of dollars) 1.Jim P. Manzi $ 941 $25,356 $26,297 Lotus chairman 2.Lee A. Iacocca 1,740 16,156 17,896 Chrysler chairman 3.Paul Fireman 15,424 -- 15,424 Reebok Intl. chairman 4.Phillip B. Rooney 950 13,326 14,276 Waste Management president 5.Richard M. Furlaud 1,405 12,480 13,885 Squibb chairman 6.Donald F. Flynn 640 12,577 13,217 Waste Management senior v.p. 7.John F. Welch Jr. 2,057 10,574 12,631 General Electric chairman 8.Harold A. Poling 2,809 7,746 10,555 Ford Motor vice chairman 9.Jack G. Clarke 787 8,887 9,674 Exxon vice president 10.Eugene R. White 683 8,163 8,846 Amdahl vice chairman
Source: Business Week
