Another Voice
Charter Member of The Element
- Joined
- Jan 27, 2000
Well, maybe yes there will be.
Here's an interesting little article running right now on Forbes.com:
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Mickey Mouse Math
Forbes.com
The creative folks who brought you Fantasia expect you to suspend disbelief when reading their proxy, too.
Walt Disney Co. shareholders cheered when Chief Executive Michael Eisner took no bonus as the movie company bled $158 million last year. But don't be surprised if Eisner, whose salary totals $1 million, gets a little something extra in his paycheck this year, even if Disney languishes in the red.
According to a new pay plan in the company's proxy and approved by shareholders, Disney's clubby board can now apply a more liberal definition of profit in tying Eisner's bonus to performance targets. To arrive at so-called adjusted net income the company lists no fewer than seven items that can be added back to earnings. One-time charges from laying off staff, like the 4,000 Disney recently canned? Eisner's wallet need not get lighter. Losses from closing a business, such as the $1.5 billion Disney took for the failed Go.com last year? That won't necessarily hurt the bonus, either.
"I can't think of anything they've left out," marvels Judith Fischer, managing director of Executive Compensation Advisory Services.
Disney's chief financial officer, Thomas Staggs, says most new pay plans define profit similarly, and that changing the criteria for judging Eisner, 60, was intended only to give Disney greater leeway to take tax deductions for bonuses linked to performance targets. A range of criteria is used to set the size of the bonus, he insists, and the board can deny extra pay even if performance targets are met. Moreover, a three-person executive performance subcommittee can choose to omit any of the items that define "adjusted net income."
But don't expect Disney's board to be too tough on Eisner. One of the three subcommittee members is Reveta Bowers, head of the grammar school Eisner's kids attended. Another is actor Sidney Poitier.
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Perhaps the really disgusting aspect about this it The Company justifies this practice as a tax dodge.
Here's an interesting little article running right now on Forbes.com:
--------------
Mickey Mouse Math
Forbes.com
The creative folks who brought you Fantasia expect you to suspend disbelief when reading their proxy, too.
Walt Disney Co. shareholders cheered when Chief Executive Michael Eisner took no bonus as the movie company bled $158 million last year. But don't be surprised if Eisner, whose salary totals $1 million, gets a little something extra in his paycheck this year, even if Disney languishes in the red.
According to a new pay plan in the company's proxy and approved by shareholders, Disney's clubby board can now apply a more liberal definition of profit in tying Eisner's bonus to performance targets. To arrive at so-called adjusted net income the company lists no fewer than seven items that can be added back to earnings. One-time charges from laying off staff, like the 4,000 Disney recently canned? Eisner's wallet need not get lighter. Losses from closing a business, such as the $1.5 billion Disney took for the failed Go.com last year? That won't necessarily hurt the bonus, either.
"I can't think of anything they've left out," marvels Judith Fischer, managing director of Executive Compensation Advisory Services.
Disney's chief financial officer, Thomas Staggs, says most new pay plans define profit similarly, and that changing the criteria for judging Eisner, 60, was intended only to give Disney greater leeway to take tax deductions for bonuses linked to performance targets. A range of criteria is used to set the size of the bonus, he insists, and the board can deny extra pay even if performance targets are met. Moreover, a three-person executive performance subcommittee can choose to omit any of the items that define "adjusted net income."
But don't expect Disney's board to be too tough on Eisner. One of the three subcommittee members is Reveta Bowers, head of the grammar school Eisner's kids attended. Another is actor Sidney Poitier.
----------------
Perhaps the really disgusting aspect about this it The Company justifies this practice as a tax dodge.
