“I am writing to express my concerns over the recent decision by The Walt Disney Company (Disney) to lay off 28,000 workers during an economic recession while restoring pay rates for highly paid senior executives,” Warren wrote. “In the years leading up to this crisis, your company prioritized enriching executives and shareholders through high compensation programs and billions of dollars in dividend payments and share buybacks, which have all weakened Disney’s financial cushion and its ability to hold and pay. its frontline workers amid the pandemic. ”
Disney pushed California Governor Gavin Newsom to provide guidelines for the reopening of its theme parks in the state after more than six months of closure. Newsom has resisted the push so far, but has started to consider options for reopening these parks.
Warren says in his letter that Disney’s explanation for the layoffs “ignores short-sighted Disney business decisions that have reduced its capital, including spending billions of dollars to buy back its own stock over the past decade. , rewarding its shareholders with billions of dollars in dividends. payments, and showering its corporate executives with inflated compensation packages and salaries – which were said to have been reinstated weeks before the September layoff was announced. ”
“Disney has spent tens of billions of dollars on stock buybacks in recent years, spending $ 47.9 billion to buy back its own common stock from 2009 to 2018,” Warren notes. “A known practice to turn the company’s excess cash into higher market prices for the benefit of shareholders. ”
Warren is also claiming $ 5.4 billion in dividends from shareholders and $ 336 million in executive compensation in the years leading up to the pandemic.
Warren asks Chapek and Iger a number of questions directly. She begins by asking who will be fired and why, and how the rehiring will work. The senator then asks what value the share buybacks have brought to the company and how these buybacks have enriched senior executives, board members and shareholders.
Disney dodged the questions in its response to the letter with a statement that first aired on CNBC’s Closing Bell show.
“Senator Warren’s ill-informed letter contains a number of inaccuracies. We have unequivocally demonstrated our ability to operate responsibly with strict health and safety protocols in place at all of our theme parks around the world, with the exception of Disneyland Resort in California, where the State [sic] prevented us from reopening even though we made deals with unions representing the majority of our Cast Members that would bring them back to work, ”a Disney spokesperson said.
In essence, Warren asked Disney executives to explain why they couldn’t pay the employees who needed the money after spending the last few years making shareholders even richer, and Disney ignored the question, repeating instead what we’ve heard them say over and over again. in recent months – they want to reopen Disneyland and believe it is safe to do so, despite state government reservations.