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A better way of doing business
THIS past weekend, I seem to have struck a nerve with a Twitter thread about wage inequality at the Walt Disney Co - it is important to note that I speak only for myself and not for my family. The thread went viral, partly because of my name. But I suspect it would be far harder to get that reaction if my last name were Procter or Gamble. That's because the Disney brand occupies a special place in our economic landscape. Its profits are powered by emotion and sentiment and, yes, something as fundamental as the difference between right and wrong. I believe that Disney could well lead the way, if its leaders so chose, to a more decent, humane way of doing business.
I had to speak out about the naked indecency of chief executive Robert Iger's pay. According to Equilar, Mr Iger took home more than US$65 million in 2018. That's 1,424 times the median pay of a Disney worker. To put that gap in context, in 1978, the average CEO made about 30 times a typical worker's salary. Since 1978, CEO pay has grown by 937 per cent, while the pay of an average worker grew just 11.2 per cent.
This growth in inequality has affected every corner of American life. We are increasingly a lopsided, barbell nation, where the middle class is shrinking, a very few, very affluent people own a great deal and the majority have relatively little. What is more, as their wealth has grown, the super-rich have invested heavily in politicians, policies and social messaging to pad their already grotesque advantages.
In 2017, with the quiet encouragement of corporations across the country, Congress passed the Tax Cuts and Jobs Act. As billions of dollars landed in the laps of management, they spent as a rule not on their workforces but on wealth-enriching strategies such as stock buybacks and, yes, executive pay.
In 2018, Disney gave more than 125,000 employees a US$1,000 bonus. But that US$125 million or so was dwarfed by the US$3.6 billion it spent to buy shares back to drive up its stock price and thus enrich its shareholders. Given that about 85 per cent of stocks are held by the richest people in the country, this was a significant new investment in wealth inequality.
I have been quietly grumbling about this issue for some time now, uncertain how public to be. It is time to call out the men and women who lead us and to draw a line in the sand about how low we are prepared to let hard-working people sink while top management takes home ever-more-outrageous sums of money. It is unreasonable to expect corporate boards to act as a check on this trend; they are almost universally made up of CEOs, former CEOs and people who long to be CEOs.
Disney has pushed back by noting that it pays more than the US$7.25 federal minimum wage. This argument fails to acknowledge that the cost of living varies from place to place and few can make do on that, no matter where they live. It also fails to recognise that the company worked quietly to try to defeat a ballot initiative to lift the minimum wage paid by certain employers to US$15 an hour in Anaheim, California, which passed this past November.
At a company that has never been more profitable, whose top executives drive home with seven- and eight-figure paychecks and whose primary resource is the good-spirited, public-facing people who greet guests day after day, why are we dancing around a minimum wage anyway? I'm not arguing that Mr Iger and others do not deserve bonuses. They do. They have led the company brilliantly. I am saying that the people who contribute to its success also deserve a share of the profits they have helped make happen.
There are just over 200,000 employees at Disney. If management wants to improve life for just the bottom 10 per cent of its workers, Disney could probably set aside just half of its executive bonus pool, and it would likely have twice as much as it would need to give that bottom decile a US$2,000 bonus. Besides, at the pay levels we are talking about, an executive giving up half his bonus has zero effect on his quality of life. For the people at the bottom, it could mean a ticket out of poverty or debt. It could offer access to decent health care or an education for a child.
Here is my suggestion to the Walt Disney Co leadership. Lead. If any of this rings any moral bells for you, know that you are uniquely situated to model a different way of doing business. Reward all of your workers fairly. Don't turn away when they tell you they are unable to make ends meet. You do not exist merely for the benefit of shareholders and managers. Reward all the people who make you successful, help rebuild the American middle class and respect the dignity of the men and women who work just as hard as you do to make Disney the amazing company it is. WASHINGTON POST
- The writer is the president of Fork Films, founder of Peace is Loud and co-founder of Level Forward. Her grandfather Roy Disney and his brother Walter co-founded the Walt Disney Company