Disney CEO Bob Iger — back for the second time as chief executive of the entertainment giant — will be compensated handsomely for returning to the job.
According to a filing with Securities and Exchange Commission, Iger will receive a compensation package valued at $27 million each of the 2 years — though the actual number could be higher or lower, depending on the company’s performance and stock price.
Notably, Iger will take a salary and annual bonus that is significantly lower than the salary and bonus he received during his last tenure as CEO. Under the terms of the contract, Iger will receive a $1 million salary, with a $1 million annual target bonus.
However, his deal also includes an annual long-term incentive award valued at $25 million, of which 60 percent will be performance-based RSUs, and the remainder being stock options that will vest if Iger is still with the company when the contract ends on Dec. 31, 2024.
In fiscal 2021, Iger had a $3 million salary and received a bonus valued at $23 million, with a total pay package of $45.9 million. Chapek had a base salary of $2.5 million.
Of course, Iger’s actual annual compensation will depend highly on Disney’s stock price, and whether he meets the performance conditions set by the board. And, in fact, Iger will be joining Disney’s board as well, according to the contract.
“Accordingly, Mr. Iger may receive compensation in respect of any such award that is greater or less than the stated target value, depending on whether, and to what extent, the applicable performance and other conditions are satisfied, and on the value of the Company’s stock,” the company wrote in its filing.
Chapek, meanwhile, is likely to leave Disney with a severance package valued at at least $20 million, according to a review of his contract, though the exact number could end up being higher than that, depending on the vesting schedule of his stock holdings, and other factors.
The filing Monday said Chapek was terminated “without cause,” triggering the payouts detailed in his contract.
Disney stunned the entertainment world, and frankly the entire business world, on Sunday night with its decision to reinstall Iger as CEO. In a statement, Disney board chair Susan Arnold said that it “has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.”
Iger, however, is only set to serve a 2-year term, “with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term.”
Iger was one of the most highly-compensated executives in corporate America during his first tenure as CEO. In his final year with the company as executive chairman, he was paid $46 million.
However, even when he does step down as CEO, Iger won’t be completely free of Disney. When he stepped down as executive chairman last year, he remained a consultant to the company. That consulting agreement has been suspended now that he’s back, but will pick right back up when he steps aside once more.