Former Disney CEO Bob Chapek to receive $23 million in exit payment
Former Walt Disney Co CEO Bob Chapek, who was recently fired by the production company, will receive nearly $23 million in exit pay and other benefits. The amount of payment the company is expected to make to Bob Chapek was calculated by Bloomberg News based on the latest regulatory filings.
According to the contract that the company signed with Bob Chapek, he has the right to receive a salary for the duration of his tenure, even if he is fired from the highest position by the company. Walt Disney Co had recently extended Bob Chapek’s term as the company’s chief executive until mid-2025. A ballpark salary calculation by then will amount to nearly $6.5 million.
Bob Chapek, who joined Walt Disney Co as Chief Marketing Officer for the Buena Vista Home Entertainment Division, had a long career with the company in various positions. This long career entitles Bob Chapek to a company pension. As of October 2021 (deposits made by the company with regulators), he should receive nearly $17 million in pensions.
In addition to cash payments, Bob Chapek also owns a large number of Walt Disney Co stock (excluding awarded stock). Even if the company’s stock is currently not performing well, any increase in stock value may increase the value of the stock ownership held by the former CEO.
He is also entitled to various equity awards he has received over the years. Many of those stock exchanges have still not been vested in his portfolio. Even though he was terminated by the company for unknown reasons, some of the shares will continue to be in his name and will vest in him in the future. The value of those shares or the number of scrips he will receive as a share award will depend on the value of the shares.
Finally, Chapek has a so-called non-qualified deferred compensation plan, which is akin to a large 401(k) that many large companies have in place for high-income employees. It generally allows them to invest part of their income in a selection of equity and bond funds. About a year ago, Chapek had around $8.5 million in his plan, a number that has likely changed given recent market volatility.
Over the past year, the value of Disney shares has fallen over 40% for a variety of reasons. The company hopes to regain the trust of Wall Street by carrying out a restructuring of senior management and the workforce.
Walt Disney Co has named Robert Iger as the company’s chief executive. Robert Iger, who served as the company’s chief executive for 15 years until 2020, is expected to get the prescription company back on track.