(Bloomberg) -- Bob Chapek leaves Walt Disney Co.’s top job with exit payments and benefits that could be worth more than $23 million. That’s without including the millions more he could collect in the coming years if the company’s share price recovers.
The amount is based on calculations by Bloomberg News using disclosures from regulatory filings. Disney hasn’t yet publicly disclosed the financial terms of the chief executive officer’s departure, and a representative didn’t respond to a request for comment sent outside normal business hours.
Chapek’s contract entitles him to collect a salary for the full duration of his term, even if he’s ousted prematurely. His term was recently extended to mid-2025, and the paychecks between now and then add up to roughly $6.5 million.
He’s also entitled to the pension he’s accumulated over his decades-long career at Disney. As of October 2021, filings show it stood at $16.9 million. That money is his, regardless of the circumstances of his departure.
As for the rest: he probably will get more, but it’s unclear just how much.
He holds a trove of Disney stock options, though most of them are underwater. If he had exercised his in-the-money securities and immediately sold the shares at Friday’s U.S. market close, he would have collected around $3.5 million.
He also holds stock awards he received in prior years that haven’t yet vested. Some of them will likely continue to vest even though he’s no longer at Disney. How much they’ll be worth -- and how many securities he’ll receive -- will depend on the shares’ trajectory after they plunged 41% this year. If they pick back up, both the stock and the options will swell in value.
Finally, Chapek has a so-called non-qualified deferred compensation plan, which is akin to a super-sized 401(k) that many large companies set up for high-earning employees. It usually lets them invest some of their earnings into a selection of equity and bond funds. Around a year ago, Chapek had about $8.5 million in his plan, a figure that has likely changed given the recent market volatility.
For now, hardly any of this is etched in stone. It’s not uncommon for boards to strike bespoke exit agreements with CEOs, especially in contentious situations where they are cutting the person’s contract short. And if a board concludes that a CEO broke company policy or didn’t fulfill the commitments of the employment agreement, it may decline to pay the person at all. (Disney’s statement announcing Chapek’s departure and the reinstatement of his predecessor, Bob Iger, didn’t provide reasons for the switch.)
While Chapek’s payout by most measures is a generous one, it’s far from the rich entitlements that some chiefs in the entertainment industry have enjoyed in the past. When Chapek took over as CEO in 2020, the board set his target pay in the bottom quartile for media chiefs. The move followed years of controversy over Disney’s executive compensation, where everyone from shareholders to lawmakers and a Disney family heir had derided Iger’s pay.
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