Disney CFO Jay Rasulo May Not Extend Contract Before Jan. 31 Expiration

[crazy4wdw]

From The Hollywood Reporter:

Disney CFO Jay Rasulo May Not Extend Contract Before Jan. 31 Expiration

by Paul Bond 1/16/2015 8:23pm PST

Tucked away in Disney's latest regulatory filing revealing executive compensation is a reminder that CFO Jay Rasulo's contract expires at the end of the month.

While it's unusual for such a high-ranking executive to delay a decision as to whether he'll remain with the company or not, insiders say it makes sense in Rasulo's case, given he is presumably a candidate for COO along with parks and resorts chairman Thomas Staggs.

Disney has been operating without a COO since Bob Iger was named CEO in 2005 and Iger has said he intends to name a COO by this spring, with the presumption being that whoever is promoted will be groomed for the CEO slot when Iger's contract runs out at the end of June, 2018.

Rasulo, therefore, could choose to remain with Disney without a contract rather than negotiate a new, short-term one. If he is promoted to COO it will come with a new long-term contract and if he is not promoted he will decide then whether to remain as COO or explore other options.

In Friday's filing, it was disclosed that Iger, 63, earned $46.5 million in fiscal 2014, up from $34.3 million a year earlier. Rasulo, who, like Staggs, is in his 50s, was the second highest paid executive at Disney, earning $16.2 million, up from $10.7 million. Staggs is not considered an executive officer so his compensation was not disclosed.

The contest for COO is tough to handicap given the praise heaped on both executives over the years. Plus, Staggs and Rasulo essentially swapped jobs in 2010 so each of them have similar experiences within the company.

Disney noted in Friday's filing that Rasulo's hefty 51 percent increase in compensation was in part owed to bigger target bonuses recommended by Iger to reflect Rasulo's accomplishments.

The filing lauds Rasulo for "effective management," "leadership of multiple initiatives," "negotiation of the recapitalization of Disneyland Paris" and helping with the acquisition and integration of Maker Studios.

 

[OKW Lover]

I'm just not following the logic here.

Even if Jay is in the running for COO, signing a contract now wouldn't really have any impact. Its not like a new one-year (or even longer) contract would preclude Disney from naming him COO if they so chose. Any new contract could easily be renegotiated if the two parties agree, which they would if Jay was selected for COO.

Flip side of the argument; if Jay is not selected as COO, having a contract could protect him from losing his job. Why wouldn't he sign a new contract now?

 

[Teamubr]

I see 2 scenarios.

First, not forcing a new contract is a good faith move. Without a contract to protect his position or force a huge buy out if he isn't made COO, there is limited risk to the corporation regardless of the decision. This may be intended to entice Iger to make him COO.

Second, there may be terms in his contract that would prevent him from seeking outside opportunities if he isn't made COO. No contract, no restrictions.

j

 

[OKW Lover]

Good points. I guess we will just have to wait and see.

 

[Lee Matthews]

I prefer Tom Staggs

 

[lockedoutlogic]

I prefer Tom Staggs

I prefer neither...

But if smiling jay is "not extending his contract"...then that means he isn't the "strong internal succession candidate" that was attached to Iger's contract extension announcement.

I'll never get the corporate world...Rasulo doesn't have to do a thing and works for a happy all the time brand...and gets paid 7-8 figures annually

I'd sign up for a lifetime extension of that

 

[OKW Lover]

I prefer neither...

But if smiling jay is "not extending his contract"...then that means he isn't the "strong internal succession candidate" that was attached to Iger's contract extension announcement.

I'll never get the corporate world...Rasulo doesn't have to do a thing and works for a happy all the time brand...and gets paid 7-8 figures annually

I'd sign up for a lifetime extension of that

"Doesn't have to do a thing"??? You can't be serious.

 

[lockedoutlogic]

"Doesn't have to do a thing"??? You can't be serious.

No...I really am...

Rasulo and Staggs are basically figure heads...

At least Skaggs is an accoutant.

Why do I think that?

2009:
Staggs: CFO
Rasulo: park guy

2010:
SWITCH!!!
Rasulo: CFO
Staggs: park guy


All these guys do the same thing- sit around with different people talking strictly about the money... Then attend business meetings and interviews while attempting to change the subject to money all the time.

Come on...on what level does a swap make sense?
Except at Disney... Where it's all about "time served" and the perception sells more than the product in many cases.

If you go back and read the articles about it at the time...it's in print that it was a move for "perception" to lead to promotion.

If you can be switched out of your job strictly for "perception"...how much actual "work" do you have on your desk?

 

[rteetz]

No...I really am... Rasulo and Staggs are basically figure heads... At least Skaggs is an accoutant. Why do I think that? 2009: Staggs: CFO Rasulo: park guy 2010: SWITCH!!! Rasulo: CFO Staggs: park guy All these guys do the same thing- sit around with different people talking strictly about the money... Then attend business meetings and interviews while attempting to change the subject to money all the time. Come on...on what level does a swap make sense? Except at Disney... Where it's all about "time served" and the perception sells more than the product in many cases. If you go back and read the articles about it at the time...it's in print that it was a move for "perception" to lead to promotion. If you can be switched out of your job strictly for "perception"...how much actual "work" do you have on your desk?

I agree. Except the parks guy has to make appearances at parks where the CFO doesn't. Staggs does do a lot of the signing off on the smaller things like big refurbs, a new quick service, etc. Iger only signs off on the big stuff like park expansions so staggs does do a little bit.

 

[OKW Lover]

Wow - it almost sounds like folks think that all these people do is sign their name to a piece of paper and get paid big bucks. Seriously folks, these people get paid to make the big decisions and stake their (and the company's) reputation on the line. They do this by making sure they hire/promote the most qualified individuals then the evaluate the information those folks bring and make big decisions about the course of the Company.

Please recall that Disney is not just theme parks. In fact theme parks makes up only about 1/3rd of the whole corporation.

 

[rteetz]

Wow - it almost sounds like folks think that all these people do is sign their name to a piece of paper and get paid big bucks. Seriously folks, these people get paid to make the big decisions and stake their (and the company's) reputation on the line. They do this by making sure they hire/promote the most qualified individuals then the evaluate the information those folks bring and make big decisions about the course of the Company. Please recall that Disney is not just theme parks. In fact theme parks makes up only about 1/3rd of the whole corporation.

Well In Staggs position all he does is parks and resorts nothing else. While Rasulo has a larger role in the company. So with that said I would say much of what Staggs does is sign papers and supervise essentially. Rasulo works on company finances. The parks section of the company has so many figures. Two are now leaving Crofton and I forget the other one but Staggs, Vaughn, Rohde, Lasseter, etc. they all have major parks roles and make decisions but really it ends up going to Iger.

 

[lockedoutlogic]

Well In Staggs position all he does is parks and resorts nothing else. While Rasulo has a larger role in the company. So with that said I would say much of what Staggs does is sign papers and supervise essentially. Rasulo works on company finances. The parks section of the company has so many figures. Two are now leaving Crofton and I forget the other one but Staggs, Vaughn, Rohde, Lasseter, etc. they all have major parks roles and make decisions but really it ends up going to Iger.

Indeed...the Disney hierarchy has been Harry Truman doctrine for along time. When Eisner took the role of chairman/CEO and never really replaced frank wells...the rest of the "upper management" became more or less a collection of suits.

Who... If you notice...don't fair to well when they leave Disney...or get edged out if they stay.

 

[OKW Lover]

Indeed...the Disney hierarchy has been Harry Truman doctrine for along time. When Eisner took the role of chairman/CEO and never really replaced frank wells...the rest of the "upper management" became more or less a collection of suits.

Who... If you notice...don't fair to well when they leave Disney...or get edged out if they stay.

Eisner hasn't been with Disney for nearly 10 years now. Today's Walt Disney Company is a vastly different organization with different players.

 

[lockedoutlogic]

Eisner hasn't been with Disney for nearly 10 years now. Today's Walt Disney Company is a vastly different organization with different players.

This is true...but from the looks of it...the "power structure" is largely the same.

When Eisner was at his meglamaniacal peak - from ovitz to the stock revolt in 2003 - the criticisms were that the board was a mouthpiece to him, he would not delegate power or prepare a manager for the future, and he had made alot of shortsighted choices for profit with no attention to sustaining the business...timidity in the parks being a prime complaint.

Now, Iger is not as ego driven as Eisner... We all
Can agree...

But... What really has changed?

The IP purchases - no complaints here...

But what about those specific points outlined above?

I would submit that not much has changed.

Parks are a mixed bag...they haven't opened a bad park (lately)...but they are playing a delaying game/tactics in reinvention/investment - notably at wdw. The construction timelines are deliberately long. There's not much of an argument here after watching the painful progression of "new fantasyland"

The board is still a mouthpiece. There is still no succession line. And the longer they go without one...the more the business world will doubt the candidates.

And...lets not fool ourselves...one of the things that made Disney great was that Eisner had a big watcher over his shoulder.

There is no roy and won't be one again. Iger
Could have had that foil in Steve jobs...but that didnt work out.

We're off course here... Bottomline is that you can't be terribly pleased with this Staggs/Rasulo longterm path to...well - we don't really know.

It reminds me of alot of those that have come before... Pressler, crofton, cockerel...Iger - if Eisner had had his way...

Meh

 

[OKW Lover]

I guess we'll just disagree then. To my mind everything has changed.

 

[lockedoutlogic]

I guess we'll just disagree then. To my mind everything has changed.

I thought that for about 5 years...

Now it seems to me that the crackers have begun to go stale again.

It's the "longterm" plans for themeparks... Which cut the crap are amusement parks... And learned brutally over 100 years of history that you cannot open the gates with little change year after year and remain strong... The erosion has a cumulative effect and can lead to swift tumble...

They're getting too comfy dangling carrots for what's becoming a decade on each project and collecting fees in the interim with a snicker.

And the "necessary" contract extensions. CEOs deal with so much stress and capital... I don't think 20 years of effectiveness is realistic. Indeed... That is exactly what happened with Eisner. Iger is inching down the same road.

It's starting to look pretty 2000 status quo... Which is not what you want to replicate from the management end.

Movies and some of their foreign activities...look pretty good. TV is fairly strong too. Not saying anything bad there.

But I'm not gonna be one that says "stock price is great! Management is doing great!"
That's too much of a red herring and I can't dumb it down to that. Anyone that accepts financial market figures on face value hasn't learned where the danger is.

 

[rteetz]

I thought that for about 5 years... Now it seems to me that the crackers have begun to go stale again. It's the "longterm" plans for themeparks... Which cut the crap are amusement parks... And learned brutally over 100 years of history that you cannot open the gates with little change year after year and remain strong... The erosion has a cumulative effect and can lead to swift tumble... They're getting too comfy dangling carrots for what's becoming a decade on each project and collecting fees in the interim with a snicker. And the "necessary" contract extensions. CEOs deal with so much stress and capital... I don't think 20 years of effectiveness is realistic. Indeed... That is exactly what happened with Eisner. Iger is inching down the same road. It's starting to look pretty 2000 status quo... Which is not what you want to replicate from the management end. Movies and some of their foreign activities...look pretty good. TV is fairly strong too. Not saying anything bad there. But I'm not gonna be one that says "stock price is great! Management is doing great!" That's too much of a red herring and I can't dumb it down to that. Anyone that accepts financial market figures on face value hasn't learned where the danger is.

I agree. I think a lot of people just look at the companies overall success and think Iger has been great for every aspect of the company. Yes Iger has been great for the movies and TV and even the foreign parks. But when it comes down to the US parks and resorts he has been one of the least active investing CEOs in Disney history. And if you use the DCA redo as something he invested in, that doesn't count because he had to do that, that park was failing.

 

[OKW Lover]

But when it comes down to the US parks and resorts he has been one of the least active investing CEOs in Disney history. And if you use the DCA redo as something he invested in, that doesn't count because he had to do that, that park was failing.

How is it that recognizing a problem and identifying a good solution "doesn't count"? How about giving credit for New FantasyLand? Avatar? The upcoming remake of DHS? Disney Springs? Or even Magic Bands/FP+?

 

[rteetz]

How is it that recognizing a problem and identifying a good solution "doesn't count"? How about giving credit for New FantasyLand? Avatar? The upcoming remake of DHS? Disney Springs? Or even Magic Bands/FP+?

Well I think any new CEO besides Eisner would've recognized a problem or at least been told that something was wrong by someone. Yes NFL, avatar, Disney springs, and MM+ have all been investments but they have all come in the last 4 years. DHS is still unannounced, yes Star Wars and Pixar rumors are all over I report most of them. But with those investments you named, a lot of previous CEOs including Eisner we're investing constantly in the product because they knew it was successful. Before NFL what was the biggest thing Eisner brought to WDW? DVC? TSMM? AoA? Iger just hasn't been the greatest investing wise in WDW. At least Eisner was a theme park nut and knew he had a good thing. Would Iger have built AK or DHS?

 

[lockedoutlogic]

How is it that recognizing a problem and identifying a good solution "doesn't count"? How about giving credit for New FantasyLand? Avatar? The upcoming remake of DHS? Disney Springs? Or even Magic Bands/FP+?

I agree that they should get some credit for the DCA redo...however lets face it - if the park had just limped along with flat attendance (like studios)... Then it would look exactly like it did in 2007. That was taken out of their hands by a large drop in attendance and revenue... The DL faithful STOOD UP and had a backbone... And they were rewarded.

Avatar the jury is out. Buzz has not been good (if even present) and lots of skepticism. But we'll
See. My main problem there is they are stetching it out to almost 10 years. That's ok - go ahead and not do anything in the other parks because you're "doing this"...but take your sweet time. I'll gladly pay the increase on my annual pass and the mnsshp tickets

Downtown I'm giving no credit on - first... Nobody asked for the closure of pleasure island and retail outlet mall type stores to be built. That was 100% an accounting and rental/ fee move.
I hope it's done well and offers some nice new things. But I have to see it to say the ends justify the means.

Absolutely NOTHING is being done at Hollywood studios as I know it. I'm not falling for this "it's going to be big!" Fanboy garbage. I will judge/ credit when I hear what's being done...and more importantly when I can walk into it. I have a 7 year old into Star Wars...if he's chasing girls by the time it opens - I'm not gonna be real thankful.
That's a failure for a " family entertainment company".
Fantasyland underwhelms... It already looks like kinda ho hum part of the scenery now... As opposed to a draw.
Fool me once...

I don't knew what to make of the bands...I, "mr negativity" actually give them credit for how the system works at this point... I see alot of positives. But can you tell me that they won't start to use it as a club against me?
Or use it to screw employees that have slowly been shafted for years?
I can't yet.