Today is Disney’s annual shareholders meeting being held in Northern California where Pixar is located. And we know from past experience they can be an ornery bunch especially when the stock is down 47% from a year ago. (Remember, they targeted Michael Eisner, almost gave him a No Confidence vote, which convinced him to resign). Now the Mouse House is under fire for giving Bob Iger a “Golden Coffin”. No, that isn’t a typo. Nor is he King Tut. There are Golden Parachutes (every bigwig gets those). Golden Retirement Packages (reserved for MVPs like Peter Chernin and Jack Welch). Now Golden Coffins, where CEOs get paid even after they die.
And it stinks like a rotting corpse.
The financial media made much of the Golden Coffin given Comcast chief Brian Roberts: a $47.5 million bonus if he dies on the job. (The check would go to his heirs, of course.) There’s also $13.2 million in continuing pay, plus restricted stock, for a total post-death payout of $75 million. Comcast claims the continued bonus and pay for five years after Roberts’ death offsets the lack of a company-funded retirement plan worth tens of millions of dollars.
Now it’s come out that Disney has promised to keep paying CEO Robert Iger’s salary for three years if he dies before leaving his job. His estate will get $4.5 million upon his death. “Pay is supposed to be for performance,” Cornish Hitchcock, a lawyer who crafts shareholder proposals filed by Amalgamated Bank LongView Funds, complained to MSN Money columnist Michael Brush.
“If an executive is dead, you are not getting performance.”Yet Brush says “Golden Coffins” aren’t rare. In 2006, at least 17% of Fortune 100 companies said their CEOs were entitled to death benefits, according to one executive compensation research firm. “Companies defend these deals as a kind of life insurance. Disney, for example, explains that death benefits ‘can be an important inducement to attract and retain executives who seek to provide economic security for their families in the event of their death.’ ” Brush writes.
“But consider what these CEOs earn while alive: Comcast’s Roberts got pay, bonus and incentive stock worth $46.8 million over two years (2006 and 2007), according to the company, and he reaped $22.5 million by exercising stock options last year. His heirs would also get $223 million from a life insurance policy on which the company pays premiums.
“Iger made $58.2 million in pay, bonus, options and incentive stock over two years (2007 and 2008), according to company reports, and he has a pension plan that was recently worth $8 million. Does he really need a $4.5 million death benefit? Maybe that’s why Disney recently agreed to stop offering death benefits to newly hired execs.”