
Disney heir on CEO's $66M pay: 'No one on the freaking planet is worth that' - nwrk
https://www.theguardian.com/us-news/2019/apr/26/abigail-disney-bob-iger-amazon-jeff-bezos
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dang
It's encouraging to see that the community has done a pretty good job of
substantive discussion here, given the flamebaity and ragebaity title.

A more interesting article about Abigail Disney came out a few weeks ago:
[https://news.ycombinator.com/item?id=19524325](https://news.ycombinator.com/item?id=19524325)

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tathougies
What people forget in the debate over public company 'CEOs' is that, when the
price of disney shares goes up from $24 to $135, that is millions upon
millions of peoples retirements that are that much more secure. So, I mean,
would you pay $66 million to someone for a better retirement for others?

Now, I don't know the answer to this question, but this way of looking at the
stock price of public companies is often lost on people of all political
persuasions.

Another thing to keep in mind is that, Iger 'only' made $3million last year.
Most of the money reported as 'income' is actually stock grants. $66mln disney
stock is not a controlling share, and -- by tying up Iger's wealth in the
company -- it aligns his incentives with those of the wealth he has been
charged with managing. Nevertheless, Iger couldn't sell this much stock
without either being accused of insider trading (since such a large sale would
surely manipulate the stock price), and the SECs regulations on insider
trading are very strict (they prosecute based on the appearance of insider
trading). Thus, given that he can't actually sell the disney stock, it's a
real disservice to say he made $Xmillion in disney stock, given that the stock
has no immediate cash value to him.

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TaylorAlexander
It feels to me that just because you’re the CEO doesn’t mean you’re
singlehandedly responsible for all that wealth being created. A whole bunch of
employees worked really hard to raise that stock price, and they’re not even
being paid a living wage. Some of them can’t afford an apartment and live in
their cars.

I don’t believe the CEO caused all of that rise in the stock, and the issue is
whether one person should even be in a position to benefit that much while
others get a meager salary. Why does the CEO get so many thousands of shares
of Disney stock rather than a large portion of that package going to the many
thousands of workers that also helped the company grow in value? Just as you
say it makes sense to align the CEOs interests, the same is true for every
worker at the company. And one very committed CEO is great, but thousands of
appreciated workers who can afford to live would be great for the company too.

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polishTar
Since Iger took over as CEO in 2005, Disney has outpaced the growth of the S&P
500 by 6x (not adjusting for dividends). In aggregate, this higher growth rate
is responsible for >$150B of market cap.

It certainly wasn't just Iger's decisions that led to this growth, but it
isn't much of a stretch for investors to believe his decisions were
responsible for at least a small portion of that. Iger's $60M equity grant
dilutes shareholders by roughly 0.02%. If the only thing Iger did was make
decisions that resulted in Disney being 0.03% more valuable than they
otherwise would've been, then Disney investors got a great deal.

The existence of $12/hr jobs at Disney is a totally legitimate concern, but I
believe that's a separate issue.

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TaylorAlexander
I understand that he contributed to a portion of the $150B growth, but that’s
true of every other employee too. Literally every employee works to create
that growth. Why is the CEO’s high compensation so obviously justified but the
thousands of underpaid workers are viewed as “a separate issue?”

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Agustus
Because they do CEO work.

Look at any CEO who is doing a good job and you will see insane people who are
getting low amounts of sleep, focused solely on the company growth to the
exclusion of family time, and actually doing work. The work is comprised of
tons of knowledge and skill sets.

Let’s take Elon Musk for example; disregarding whether the the company is well
run or not. If you look at his work schedule, he is saying things like
sleeping at the Tesla factory, working longer shifts, handling regulatory and
politician issues, etc. The skill set required and time commitment is
something that most people shy away from. Look at the horrified responses to
Ma’s work dedication missives and you are on target where the normal person
holds up. The insanes go to the political meeting on Capitol Hill, hire and
fire subordinates, identify the direction of the company, and then execute on
those decisions.

The skill set for the underpaid workers is easy to develop and put together.
The dynamic life of a CEO is an item that is difficult as it operates in a
dynamic environment that constantly changes and requires time and money
investments that mean the employees who report to you may not have Christmas
presents for their kids.

~~~
TaylorAlexander
This honestly sounds like hero worship. The hard working style you describe is
common with low paid workers too - very low paid workers still work super hard
for long hours.

I agree the skill is unique but I don’t see how this work is “worth” many
thousands of times more than other hard workers.

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product50
CEOs make or break the company. The best analogy is to look at CEOs who didn't
do well. Consider Paul Otellini at Intel who missed the mobile processor boat
completely when Steve Jobs approached him. Or maybe consider Mark Hurd or
Carly Fiorina of HP who ransacked the company by cost cutting measures and
acquiring Compaq! Or maybe look at Nokia's CEO Olli-Pekka Kallasvuo in 2008
who missed the entire smartphone wave!

Now assume each of these CEOs who failed massively made $5M/yr (very
conservative estimate). Is Bob Iger 100x more than that given what he has done
at Disney? From acquiring Marvel to BAMTech to having a streaming strategy
laid out (and being executed on well) - Bob is definitely phenomenal and one
of the core reason why Disney is in the position it is in terms of strategy
and execution. Is that worth $66M/yr? Absolutely, in my opinion.

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rectang
If all the credit and blame for success or failure is due to the CEO, why is
anyone else paid at all?

~~~
product50
Company strategy and focus matters. And CEOs have outsized powers in deciding
that. The rest of the company 1) either executes the strategy 2) proposes new
strategies - some of which bubbles upto CEO for their review/approvals and 3)
are G&A (HR/FInance etc.).

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steve19
Disney's greatest sin is locking away our culture through lobbying Congress to
extend copyrights. In my opinion it is a much greater problem than ridiculous
CEO pay (and a super rich shareholder complaining about it)

~~~
nothrabannosir
As much as I agree with you (and believe me, I do); this is changing the
subject. She can be a hypocrite, but that doesn't make her wrong. It just
makes her a hypocrite.

Although, I do have to say, the closing paragraph is particularly jarring:

 _> “It is possible to say no to money,” she said. “If CEOs don’t lead this by
making a conscious ethos shift, then I don’t know where we’re gonna go.”_

Owch...

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saagarjha
Abigail Disney has $500 million, the majority of which she inherited. Does she
think that she is worth that money?

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seibelj
No person thinks they have too much. It’s always someone richer than them that
has too much. You are always struggling and underpaid, it’s the other guy who
makes too much undeservedly.

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trothamel
Wikipedia says that Disney has 201,000 employees, so that's $328 for each
employee he's responsible for. Alternatively, he makes .11% of what Disney
brings in each year in revenue.

The scale of the company is absurd, but his compensation doesn't seem to out
of whack for it.

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megaremote
> doesn't seem to out of whack for it.

And that is part of the problem. Somehow this has become ok, but workers
unable to live on a single wage is not.

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HeyZuess
I believe you are on the right track. It's the iceberg issue, no matter how
much the CEO makes it's the factors at the bottom which make the difference,
i.e. how much workers get paid in general.

However in saying that we live in a culture and climate which pays people
somewhat (mostly) on the value of the services/skills they provide. So if
you're a janitor, then you are probably going to get a low salary and it would
be hard to justify increasing that salary simply because the cost of living is
high.

If this guy earns $660,000 or $66m, the problem at the lower end still exists.

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abernard1
> The 59-year-old, whose grandfather Roy O Disney co-founded the Walt Disney
> Company with his animator brother, inherited a share of her family’s wealth,
> and is reported to be worth $500m.

So I'm guessing she doesn't think her grandfather was worth that kind of money
back in the day either...

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stefan_
If anything, inheritance is a monumentally more significant inhibitor to
anything approaching "equity" than CEO pay.

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KaoruAoiShiho
Yeah I was thinking that she donates all her money or something, but if not
this is just a capital owner shitting on a worker (albeit highly paid).

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yani
From WikiPedia "Abigail E. Disney (born January 24, 1960) is an American
documentary filmmaker, philanthropist, and activist known for her documentary
films focused on social themes.".

Her background/experience does not make her an expert in employee
compensation. Am I missing something to this, other than her family name, of
course?

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diminoten
No but you're undervaluing her family name.

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cellis
Counterpoints: Michael Jordan in basketball: without him millions wouldn’t
watch the NBA, Gatorade and Nike wouldn’t have become the cultural juggernauts
they are today...for all that he was only paid ~1 Billion. Tiger Woods in
golf. Steph Curry made the sleepy warriors worth over 2 billion resulting in a
1.6 billion net worth increase for the owners. He has only recieved, for his
efforts, maybe 100 million. Roger Goodell, as much as I hate him, has managed
to screw over the working class nfl players with a settlement bordering on
criminal, but the owners of NFL teams love him for it, they’ve all gotten
billions of dollars more richer, and for all this Goodell has only been paid
around 300 million.

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jshaqaw
Amazing how little anyone is mentioning that Abigail Disney who is worth half
a billion dollars purely by virtue of being born rich May be on thin ice
criticizing the lay of someone who actually works for a living. She says CEOs
can say no to excessive comp but I don’t see her giving back 90% of her
inheritance to charity which would still leave her with 50mm dollars! No I’m
not defending excess CEO comp, the underpayment of workers, or wealth
inequalty. I just find her to be a very strange and non self aware avatar for
this movement.

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RickJWagner
It just sits oddly for me.

Her ancestors made a ton of money, and now she lives comfortably and is widely
quoted in the media. Now she's 'pulling the ladder up' so the current CEO's
kids won't get the same benefits.

Not that I don't think the salary is grossly excessive-- I definitely do. I
just think she's an odd poster child for the protest voice.

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Aeolun
I think it’s interesting to think Iger can work at this salary for another
century, and still not come close to touching the wealth of Bezos (and god
knows how much that wealth will increase over that time).

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djanogo
And she is worth so much for just being born to somebody, didn't any skill to
be rich, she might as well be an accidental impregnation.

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baq
Rules of the game are what they are right now and CEOs play by them. Change
the rules, players will adapt. How to do that I’ve no idea.

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hartator
> She also has a net worth reported to be in the $500 million range.

Not sure what she is complaining about.

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zaroth
A good CEO is a force multiplier. Every single employee (and investor) in the
company benefits in ways large and small for having a great CEO at the helm,
and would suffer for having a worse CEO. In this sense, for a company with
200,000 employees (wow, that many?) is it worth $330 to each employee to have
Iger at the helm? Of course the employees aren’t bearing the whole cost, so
how about a third of that? I would certainly pay $100 out of my pocket once a
year to work for a “Legendary” CEO versus a mediocre or merely good CEO.

We know that, unquestionably, a bad CEO (or the wrong CEO for the type of
company or the growth cycle of the company) can _doom_ that company despite
the best and most heiroic efforts of the other employees. That is reason
enough to invest highly in finding and compensating your CEO.

That is not to say that the converse is true; that a fantastic CEO can make a
company grow despite poor effort from the other employees.

We can’t even say for sure that a fantastic CEO can be considered
“responsible” for the success of their hardworking company, although there is
certainly plenty of anecdotal data which shows certain decisions were
extremely prescient or certain strategies which paid off handsomely that were
driven by a CEO despite widespread skepticism.

It’s also worth considering what the CEO compensation would have been had a
company not been so incredibly successful. Performance based options aren’t
worth anything if the stock never rises.

Personally, I think the equity model is very flawed, but better than anything
else we’ve tried. Speaking as a solo founder, the idea that I start out as
100% owner doing 100% of the work makes perfect sense.

But then you earn some revenue, or raise funding, and start hiring. As a
company grows its success is the result of massive amounts of work done by a
large group of talented workers who are largely compensated through cash
salary, and maybe get token amounts of equity in the company.

But throughout this process of growth, the original founders may not even work
for the company anymore. They may have driven it nearly to death and been
kicked to the curb. But could still own double-digit percentage of the equity,
and as a result become wealthy on the back of the company they own.

Why does being the Founder entitle a person to ownership of all that value
creation that comes later?

I imagine a system where equity shares are distributed/generated through some
work-valuation model on a monthly or annual basis, and those shares are either
sufficiently diluted by the new share issuance over time, or actually have
some sort of expiration function built into them. In short, workers should be
getting a significant fraction of the company in new share issuance each year,
but that ownership should not be perpetual.

This ongoing dillution would have pretty significant issues however on the
flip side of the equation, which is the share valuation to investors who have
paid to hold shares in return for future returns or expected capital
appreciation. No investor would fund your startup and allow the levels of
dilution I think would be required to make the system more fair toward
workers. I do wonder if it’s possible to address this with two classes of
shares somehow.

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mises
I fail to understand the root of the controversy here. I do realize that
sixty-six million dollars is massive pay, but it is insignificant on a broader
scale. Are some overcompensated? Of course. But a great CEO deserves great pay
for having a rare talent: being an excellent leader. A bad CEO will sink a
company; a great one will bring it success.

More importantly, it seems that much of the objection comes down to jealousy.
If you took this guy's pay away and divided it among all disney employees,
they would get about $325 a piece. He also arguably contributes orders of
magnitude more value than a random disney employee. Finally, in this kind of
jobs market, it seems that employees would have greater options. So I honestly
ask: why are some so upset about this? I think he is indeed worth that much
(based on disney's stock performance during his tenure, the market agrees). Is
this just jealousy?

Finally, Bob Iger has gotten rich by working lucrative jobs. Mrs. Disney got
rich by being born to a certain person. Hypocrite.

Downvoters care to comment?

