Disney doubles Iger’s payout to $25 million
Walt Disney Co. more than doubled its annual payout to Robert Iger in 2006 after his role was expanded from president to chief executive.
The Burbank entertainment powerhouse spent about $25 million on Iger’s compensation during his first year atop Disney. His base salary rose to $2 million from $1.5 million, and his bonus jumped to $15 million from less than $8 million, according to a proxy statement Disney filed with the Securities and Exchange Commission on Friday.
“Bob Iger had a very good year -- both for Disney and for Bob Iger,” said Greg Taxin, CEO of proxy advisory firm Glass, Lewis & Co.
In Iger’s initial year at the helm, Disney’s net income rose 33% to $3.37 billion, while its stock climbed 28% to $30.91. The stock has continued to gain since, closing Friday at $35.21.
The Disney board’s compensation committee said it ordered the big bump after weighing “broad-based operational improvements made during the year,” including the acquisition of Pixar Animation Studios and moves by the company to “leverage technology in the creation and distribution of its products.”
Disney’s stock had a banner year, outperforming shares of rival media companies, and Iger’s big payday merely puts him “in the middle of the pack” for big-company CEOs in the industry, said Frank Glassner, who heads San Francisco’s Compensation Design Group.
“Disney has very well-linked plans that truly pay for performance, especially in light of the senior executive reorganization,” Glassner said. “It’s no longer pay for attendance or pay for ego.”
Under former CEO Michael Eisner, Disney drew repeated fire for its pay practices.
In 1998, Eisner cashed in a hoard of stock options and collected $576 million. And when Michael Ovitz, Eisner’s choice as the No. 2 executive, lasted just 15 months, he left with a severance payment later valued at $130 million. That outsized payment prompted a futile but excoriating lawsuit by shareholders.
Iger also cashed in stock options in the last fiscal year, collecting 1.6 million shares and selling the vast majority, Friday’s filing shows. He turned a profit of $7.9 million that way, on top of his $25 million in compensation.
A Disney spokesman said Iger’s options would have expired this year if he hadn’t exercised them.
The $25 million includes newly granted stock options. Also in the filing, Disney announced that it would hold its annual meeting March 8 at the New Orleans Convention Center, the scene of much televised suffering more than a year ago.
The company has no major operations in the city, but Iger asked shareholders in his opening letter to “join us in supporting the revitalization of New Orleans following the devastating effects of Hurricane Katrina.”
Shareholders also were asked to vote to increase the number of options and shares available for grants to employees. One shareholder proposal that called for a study of ethnic and gender stereotypes in the company’s characters was excluded from the ballot.
Disney also disclosed that it was paying new Chairman John E. Pepper Jr. $500,000 a year -- far more than the other directors were being paid. Taxin said it was an unusually high amount for a nonexecutive.
Pepper took over the leading oversight role Jan. 1 from former Sen. George J. Mitchell, who retired. Director Steve Jobs, who became Disney’s largest shareholder with the company’s acquisition of Pixar, asked not to be paid. Pepper, 68, is the former chairman and CEO of Procter & Gamble Co.
Disney said another long-serving director, former Georgetown University President Leo O’Donovan, 72, would step down after the annual meeting, shrinking the board to 11 members. By Disney’s reckoning, eight of the 11 meet the standard for independence required for membership on some board committees.
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By the numbers
Walt Disney Chief Executive Robert Iger’s compensation in 2006, according to a regulatory filing:
* Base salary: $2 million
* Options and other benefits: $7.9 million*
* Bonus: $15 million
* Total compensation: $24.9 million
* Estimate
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