PDA

View Full Version : Is their justice? Eisner gets 94% pay cut



coronamouseman
01-05-2002, 05:48 AM
LA Times reported this morning that Eisner's pay dropped to $1M from $12.3M last year due to company not meeting financial targets for this year.

Don't cry too much for ME, however, as part of the shortfall arose from him not exercising stock options this year - those options can be exercised by him at a later date so while his salary on paper was much lower his actual net worth was not so drastically affected ...........

Undoubtedly this annoucement is of little consolation to those cast members in the $15K to $30K range who received pay "adjustments" in the form of lower hours or outright termination which cost them anywhere from 30% up to 100% of their last year's income .............

coronamouseman
01-05-2002, 10:37 PM
My apologies to you english majors out there (or should I say their again?)

EandCDad
01-06-2002, 05:23 AM
Coronamouseman, I read the article and it implied that $1 Million is his base salary. That the whole difference between last year and this was no stock options and no bonus. Is that how you interpreted it?

coronamouseman
01-06-2002, 09:04 AM
E&CDad:

Yes, that was the way it was reported.

It brings up the interesting issue of the options - did ME simply choose not to exercise those options at this time (which simply means he postponed that event and reportable income until a later date) or did he actually choose not to exercise options which were in danger of passing beyond their termination date?

I doubt it was the latter - more likely it was the former as a combination of good PR (hey you guys - see that I am taking a hit also!) and financial planning (let's not generate any more AMT for the coming year)

EandCDad
01-06-2002, 11:08 AM
My guess is he didn't take the options for 1. the PR value (but that was likely a small consideration, this guy once was paid $550 million so it's not like he cares about what anyone thinks about his salary) and 2. the value of the stock probably did not make it beneficial to excercise the options at this time. Why not wait until next year when they will be worth more (likely) as the economy improves so will the Disney stock price.

Dlandmom
01-06-2002, 11:38 AM
He also wasn't granted any stock options this year (according to what I read).

Frankly, unless you're going to exercise the stock and immediately realize a large gain by selling it, or your options are about to expire, there's not a HUGE reason to exercise at all (holding periods aside). Exercising and then holding stock really isn't that great of a financial move....

I would agree with EandC that PR plays a big role as well. Frankly, I would've liked him to forego his $1m salary this year (just like some of the airline execs who refused a salary after 9/11). His company is hurting...refusing a $1m salary isn't going to hurt him in the slightest...and that would've been a much better PR move!

Ace
01-06-2002, 08:12 PM
he's worth 400 million, I believe... he should just give up his salary until the company isn't hurting so bad, if he "cares" so much. didn't Steve Jobs take a salary of one dollar a year to lead apple computers? He obviously cared about the company more than his money, which he already has enough of. (and yes I am aware they gave him a private jet or something)....

Morrigoon
01-06-2002, 08:32 PM
better yet, fire him altogether