Hit any picket line in Hollywood these days, and there’s a good chance you’ll see signs slamming the lavish paydays for entertainment chiefs like Disney’s Bob Iger and Warner Bros. Discovery’s David Zaslav. For the striking actors and writers who are holding out for a better deal from the major studios, these bloated compensation packages have become a very effective cudgel. It’s particularly notable when someone like Iger, who is set to earn up to $27 million this year, gripes on CNBC that the two unions aren’t being “realistic” about the struggles the business is facing.
“It’s sort of like someone’s just tossing you an easy layup,” says Adam Conover, a member of the Writers Guild of America negotiating committee. “Well, you’re gonna take it when they do that.”
Conover and the writers and actors who are on strike argue that they’ve been left behind by the industry’s embrace of streaming — a transition that’s put more debt on companies’ books, with less profits to show for it. Writers and actors say that the royalties they make when their movies or shows are licensed to Netflix or Disney+ are a fraction of what they were when they would show up on cable TV or in syndication. That’s limited their ability to make a living. And they’re angry that any sense of shared sacrifice apparently ends at the door of the corporate suites.
At the same time, the compensation packages of media moguls keep climbing, with the CEOs of the major media conglomerates earning an average of $32.6 million in salary, stocks and other perks last year. Included in that are hundreds of thousands of dollars in corporate jet use, club memberships and security services.
“You get the feeling when you read the proxy statements that these executives are trying to squeeze as much personal wealth from the company as they can,” says Rosanna Landis Weaver of shareholder advocacy group As You Sow. “So how can they say no to these writers and actors who are asking to take care of themselves at much more modest levels?”
And many of these business chiefs have been enriching themselves even as the companies they lead have seen their share prices crater. Disney’s market cap, for instance, dropped 43% from 2021 to 2022, while Comcast’s fell 34%, Paramount Global’s lost 44%, and Netflix’s tumbled 51%.
“The industry is hurting in a lot of different ways, and I would not give these CEOs an A-plus rating for their performance,” says Hal Vogel, a veteran media analyst. “They have bloated balance sheets with high debt. And you look at what’s happening to streaming and to their other businesses, and they have a lot of big problems without clear solutions.”
Wall Street has soured on the economics of the streaming services that nearly every media conglomerate has launched since 2019. Investors are concerned that they require too much capital and that the money coming in from subscriptions can’t match the revenues generated from cable channels and theatrical releases. In response, media chiefs have pledged to cut costs, which they’ve largely done by laying off thousands of workers.
It’s worth noting that since much of a media chief’s compensation is in options, which are tied to present-day stock performance, their take-home pay could be greatly reduced by the time these vest. But you are still talking about a group of industry leaders who are handsomely rewarded for their labor.
There are signs that investors aren’t happy about the way things are going. In May, Warner Bros. Discovery shareholders nearly voted down Zaslav’s $39.3 million compensation package for 2022, which passed with just over 50% approval. And a month later, Netflix stockholders voted to reject co-CEOs Ted Sarandos and Greg Peters’ pay packages of $40 million and $34.6 million for 2023. It’s a nonbinding decision, however, which can be overruled the next time Netflix’s board meets.
Some companies appear to be getting the message. When Iger returned as CEO of Disney after briefly handing the keys over to Bob Chapek, he did so at a reduced rate. His $27 million package in 2023, for instance, represents a sharp drop from the $45.9 million he earned in 2021. That’s a sign that Disney is trying to rein in the pay for its leadership.
Even with the lackluster financial results and mounting public pressure, some analysts are skeptical that much will change when it comes to the money that the CEOs rake in.
“I hope boards rethink how their leaders are compensated, but I don’t think that will happen,” says Charles Elson of the University of Delaware’s John L. Weinberg Center for Corporate Governance. “They’ve been criticized as being overpaid for years, and nothing has changed.”
Elson says it looks terrible for CEOs to preach frugality while they earn eight-figure paydays, but the structure of these companies and the way top executives calculate their salaries and bonuses make it hard to institute real reforms. Media companies like Paramount Global and Fox have dual-class stock, which means that the families that control them, like the Murdochs and the Redstones, can reward their leaders without having to endure shareholder scrutiny and pushback. That lifts the compensation of the heads of companies like Netflix and Disney: They don’t have dual-class stock, but use the pay of these other business leaders as an excuse to inflate their own salaries and option packages.
“This whole peer group concept is absurd,” says Elson. “It’s based on this idea that if we don’t pay someone this huge salary, they’ll go somewhere else. But the data shows that they almost never end up going to work for a peer. They get fired, or they leave and go work for a lower-ranked company.”
Cynthia Littleton and Gene Maddaus contributed to this report.
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