Disney Chief Eisner Gets $7.3 Million Bonus for ’94 : Entertainment: Losses at Euro Disney had shut him out in 1993. Estate of the late company president gets $5.4 million.
Walt Disney Co. Chairman Michael D. Eisner--denied a bonus last year because of losses at the Euro Disney theme park--earned a $7.3-million bonus during the company’s 1994 fiscal year, reflecting Disney’s improved financial picture.
Eisner’s bonus--combined with his base salary of $750,000, $2.6 million in stock that is restricted for three years, and $9,730 in other compensation--brought his total compensation to about $10.7 million, which will likely keep him among the nation’s top paid executives.
Separately, the entertainment giant’s proxy released Friday shows that the estate of late Disney President Frank G. Wells received $5.4 million in compensation in the fiscal year, including $3.1 million in payments Disney was obligated to make contractually after his death in an April helicopter crash.
The proxy also shows Wells’ estate had 3 million in exercisable Disney stock options as of Sept. 30 valued at $64.5 million, including 600,000 unvested options that became vested upon Wells’ death. Previously filed Disney documents show that Wells additionally had $2 million worth of life insurance through the company.
The release of Disney’s proxy each year has evolved into something of a major corporate event, in part because of Eisner’s historically big paydays, which typically attract plenty of media scrutiny but only a muted reaction from shareholders--who are generally pleased with his performance.
Despite getting a bonus, Eisner’s total compensation is a far cry from the staggering $203 million he made in the 1993 fiscal year, nearly all of that coming when he exercised a record $202 million in stock options earned since he took over at Disney 10 years ago. Wells exercised about $60 million worth of options in the same fiscal year period.
A bonus for Eisner had been expected because Disney posted a record $1.1 billion in profit for the fiscal year ended Sept. 30, thanks largely to the success of the animated film “The Lion King,” Disney’s merchandising and such factors as the videocassette sales of “Aladdin.”
A year earlier, Eisner received no bonus because the company’s return on shareholder equity--which must top 11% before he gets any bonus money--was slashed due to financial problems at Euro Disney, which has been financially restructured and is now being called “Disneyland Paris” by the company.
Eisner, 52, holds exercisable options valued at $107.4 million and unexercisable options valued at $64.5 million as of Sept. 30.
The $3.1 million Disney paid to Wells’ estate stems from his contract agreement, which provided he was to receive his pay until his contract expired, which would have happened at the end of 1994.
The amount includes $200,000 representing what he would have received in salary in the last half of the fiscal year, and $2.5 million representing the bonus he would have received during that period. It also includes $300,000 from a Disney “family income assurance plan” and $100,000, representing the salary he would have made from Oct. 1 until his contract expired at the end of December.
“I don’t think Disney did anything out of the ordinary with Wells. The only thing is that the numbers are so large that it appears to be out of the ordinary,” said executive pay expert Graef S. Crystal, who served as a consultant to Disney’s directors in the 1980s on compensation issues.
The proxy shows that some of the executives given additional responsibilities by Eisner in the wake of Wells’ death also received hefty raises, notably Senior Executive Vice President Sanford M. Litvack, who received a $1.6-million bonus on top of his $500,000 salary. Litvack has assumed many of the tasks Wells performed.
Disney’s proxy makes no reference to recently departed studio chief Jeffrey Katzenberg, whose compensation was never listed in the proxy in the past because he was not a corporate officer.