Disney springs for some of the best security on Earth…
Other publications have reported the nearly $29.62 million in total compensation that Robert Iger, the CEO/President of The Walt Disney Co. (DIS), got for FY 2010, as well as the company’s explanation for showering him with so much money. According to the Associated Press (which excluded changes in the present value of Iger’s pension benefits), Iger got a 30 percent increase over his total compensation in FY 2009.
But some of the numbers rolled up in that $29.62 million are pretty interesting in their own right. For example, Iger’s “Other” compensation jumped to $798,433 last year – an increase of almost $57,000 from the prior year. That number includes $562,034 that Disney and its shareholders spent on Iger’s security, which the company’s Jan. 28 proxy defines simply as “actual costs incurred by the Company for providing security equipment and services.” There’s a bit more detail on page 24, which states:
“The Company pays the cost of security services and equipment for the president and chief executive officer in an amount that the Board believes is reasonable in light of his security needs and, in the interest of security, requires the chief executive officer to use corporate aircraft for personal travel.”
It’s difficult to envision how security could cost more than $560,000, yet last year’s proxy reveals that the 2010 number is actually slightly lower than the amount that Disney spent for keeping Iger safe in 2009.
As mentioned above, another expenditure made “in the interest of security” is Disney’s requirement that Iger to use the company jet even when he’s traveling for personal reasons. But that cost is in addition to the $560,000+ for security: Last year, Iger’s personal use of the corporate jet cost Disney’s shareholders $192,284; that’s a 45 percent increase from what the company spent on Iger’s personal travel in 2009, and a 78 percent increase from the amount spent in FY 2008.
Of course, compared to Iger’s stock awards ($7.359 million), option awards ($4.399 million), and his non-equity incentive plan compensation ($13.46 million), perhaps $800,000 or so seems like chump change for Iger to jet around and be protected from the masses that Disney seeks to entertain and collect money from. But that argument probably is not going to appease Unite Here, the labor union that has placed a proposal before Disney’s shareholders in an attempt to get the company to commit to one method for calculating stock awards. (They’ve been using several methods, the union contends, one of which usually results in a justification for the awards. This Dec. 2010 post provides a good explanation).
And although Disney made a lot of money last year, we can’t really blame the shareholders if they grumble a bit and wish that Iger and the other executives would show a modicum of self-restraint while hauling in the perks and millions in various forms of compensation. If they did, Disney’s stakeholders might just become some of the happiest shareholders on Earth.