Disney Officers Wells and Wilson Earned $50 Million Each in 1989

Move over, Michael Eisner.

The Walt Disney Co. chairman--whose $40.1-million pay package made him America’s best-paid executive in 1988--was out-earned last year by a pair of Disney officers who reaped about $50 million each from salary, bonuses and profit from exercised stock options.

According to a company proxy statement, Disney President Frank G. Wells received $50,945,680 in compensation during the fiscal year ended Sept. 30. Gary L. Wilson, who resigned last month as Disney’s chief financial officer but remains a director and consultant to the company, received $49,988,410, according to the proxy.

By contrast, Michael D. Eisner received $9,589,360 from Disney in 1989. But the chairman’s pay only appeared to lag that of his lieutenants because they had exercised a large number of stock options, while Eisner continued to hold options covering about 1.4 million Disney shares.

According to the proxy, Eisner in 1989 received options to buy an additional 2 million Disney shares under a new employment contract at an average price of $71. But he will be entitled to cash in on those options year by year during the contract’s five-year term, a Disney spokesman said. In addition to the option shares, Eisner owns or controls about 384,000 shares. Disney’s stock closed Monday at $109.875, up 12.5 cents, in composite trading on the New York Stock Exchange.

The latest round of Disney pay disclosures appeared likely to put Wells and Wilson near the top of the 1989 executive compensation lists, but they might not outrank Time Warner Inc. Co-Chairman Steven J. Ross.

Ross is expected to make more than $180 million as a result of Time Inc.’s acquisition of Warner Communications Inc., of which he was chairman. How much of that was paid in 1989 wasn’t immediately clear, however. The Time Warner merger was officially completed only last week, even though the two companies began functioning as a unit last year.

Fat pay packages have become routine at Disney since 1984, when Eisner and Wells joined the studio and launched an era of dazzling results. But the latest disclosures come at a time when Disney stock has lost some of its luster.

The stock, which traded as high as $136.25 a share in the past year, fell in late December as investors took profits and some analysts lowered their expectations, citing the soft performance of some Disney films, including “Gross Anatomy,” “Blaze” and “An Innocent Man.”

The stock slide came shortly before Wilson, 49, resigned his chief financial officer’s post. Wilson said he planned to focus more attention on his own investments, including a stake in the group that purchased Northwest Airlines last year.

As reported, Disney President Wells sold company stock, including shares acquired in previous years, for a $74.2-million profit last July.

During fiscal 1989, Wells received salary and bonuses totaling $4,819,680, and he exercised options at prices that gained him $46,126,100, according to the proxy. As of Dec. 15, Wells held only 1,537 Disney shares but owned options to acquire an additional 410,000 shares.

Wilson received $2.5 million in salary and bonuses and exercised options for a profit of $47,488,410 during the year. But Wilson appears not to have been a heavy seller of stock acquired under options, and he continued to hold 555,685 Disney shares as of Dec. 15.

Under a new contract making Wilson an adviser to Disney through 1994, the executive will receive a $2-million payment this month as an additional bonus for his work last year, the proxy said.

The Disney proxy didn’t record salaries of the company’s divisional heads, so it contained no word of the compensation of film and television chief Jeffrey Katzenberg. Katzenberg has long been rumored in Hollywood to have a pay package rivaling that of the other Disney officers.

Another officer who clearly did well in 1989 was Richard Nunis, head of the company’s theme park division. Nunis received $9,063,914 in salary, bonuses and exercised options--an amount that would have ranked him 15th in Business Week’s 1988 salary survey, just behind Apple Computer Chairman John A. Sculley.

Disney’s annual meeting is set for 10 a.m. on Feb. 20 at the Anaheim Convention Center.