How Can This Be Defended?

[Disco]

One last post until Income tax is completely gone it is soft tyranny IMO. Also if you think taxes aren't too high I don't even know whatto say.

The government hasn't taxed my income the last two years and has actually paid me. Hurray, the tyranny is over! You got your wish.
LOL it was all worth it to get you to post after you said you wouldn't.
Seriously there are other forms that a government can use to tax but income is going to be the easiest and fairest IMO. Yes I wish that tax codes were easier and not on everything but all that aside my point was really that they've been overall lower these past few years than they have been in decades.

 

[Figment632]

The government hasn't taxed my income the last two years and has actually paid me. Hurray, the tyranny is over! You got your wish.
LOL it was all worth it to get you to post after you said you wouldn't.
Seriously there are other forms that a government can use to tax but income is going to be the easiest and fairest IMO. Yes I wish that tax codes were easier and not on everything but all that aside my point was really that they've been overall lower these past few years than they have been in decades.

Lol I'm glad I made you happy

 

[fireflymedic]

Iger's salary package up 30%. Co. profits up 54%. But they can't come to an equitable and fair solution for their CM's??? Something is wrong in Mudville and worse yet, there will be many who WILL defend it.

Iger is picking a very bad time to take a pay raise,

and I do think a "full time job" IE 40 hrs a week; should be a leavable wage, if the job is made for kids or retired people it should be 20-30 hrs a week

I also think any one not happy with pay or working conditons should be looking for a better job.

When no one will take there crummy low paying job they will up the pay.

 

[Peter Pirate 2]

Iger is picking a very bad time to take a pay raise,

and I do think a "full time job" IE 40 hrs a week; should be a leavable wage, if the job is made for kids or retired people it should be 20-30 hrs a week

I also think any one not happy with pay or working conditons should be looking for a better job.

When no one will take there crummy low paying job they will up the pay.

good post. agreed with everything except there are no better jobs in cent. fl. so what's the real alternative?

 

[tjkraz]

Overall I just think it's unrealistic to expect a large employer like Disney to be any sort of trendsetter in terms of employee compensation.

Walt Disney World employs about 60,000 people. Give each person just a $1 per hour raise and based upon a 2080 hour work year, it would cost them about $124 million dollars. Add in unemployment contributions and matching taxes and you're probably over $150 mil.

And that's just the tip of the iceberg for Disney. It wouldn't end with Florida theme park CMs. Compensation is almost certainly similar for like jobs throughout the company. Their counterparts at Disneyland would want more. People working in the cafeteria at ESPN would want more. Employees cleaning the offices at ABC would want more. Disney Store clerks want more. Every unskilled, entry level employee throughout the organization would expect premium wages.

Try explaining to shareholders that profits are going to decline by 10%--this year and every year in the future--because you want to give an unnecessarily high raise to all employees. In the abstract, we can all chat about how CMs deserve the raises and so on. But in reality Disney (seemingly) doesn't need to pay the extra money in order to retain good people and there really is no reason to think that they would otherwise make up the money. Disney isn't going to increase its theme park traffic to the tune of $150 million per year just because Cast Members are a little happier with their paychecks.

I also think the idea of Disney having "higher standards" is somewhat overblown. Yes, most of us expect to have better interactions with Disney CMs than with a typical employee at Walmart. But personally I believe that is more about Walmart's failings than Disney doing anything out of the norm.

When I've worked in a managerial role, I've always expected my people to smile and to be pleasant and helpful to customers. And not once did I have someone ask me for a raise because they were presented with an opportunity work for another employer who did not mandate politeness.

Studies have shown that compensation tends to rank surprisingly low on the list of things that influence job satisfaction. We know that many CMs do not have lavish salaries and benefits, yet something keeps them coming back to work every single day. And apparently union leadership reached agreements with Disney this weekend on a new contract.

While working for Disney at $9 per hour wouldn't be my first choice, for many it's better than the alternatives given their skill set and job market. I have the utmost respect for people who do help create the magic!

 

[Peter Pirate 2]

Overall I just think it's unrealistic to expect a large employer like Disney to be any sort of trendsetter in terms of employee compensation.

Walt Disney World employs about 60,000 people. Give each person just a $1 per hour raise and based upon a 2080 hour work year, it would cost them about $124 million dollars. Add in unemployment contributions and matching taxes and you're probably over $150 mil.

And that's just the tip of the iceberg for Disney. It wouldn't end with Florida theme park CMs. Compensation is almost certainly similar for like jobs throughout the company. Their counterparts at Disneyland would want more. People working in the cafeteria at ESPN would want more. Employees cleaning the offices at ABC would want more. Disney Store clerks want more. Every unskilled, entry level employee throughout the organization would expect premium wages.

Try explaining to shareholders that profits are going to decline by 10%--this year and every year in the future--because you want to give an unnecessarily high raise to all employees. In the abstract, we can all chat about how CMs deserve the raises and so on. But in reality Disney (seemingly) doesn't need to pay the extra money in order to retain good people and there really is no reason to think that they would otherwise make up the money. Disney isn't going to increase its theme park traffic to the tune of $150 million per year just because Cast Members are a little happier with their paychecks.

I also think the idea of Disney having "higher standards" is somewhat overblown. Yes, most of us expect to have better interactions with Disney CMs than with a typical employee at Walmart. But personally I believe that is more about Walmart's failings than Disney doing anything out of the norm.

When I've worked in a managerial role, I've always expected my people to smile and to be pleasant and helpful to customers. And not once did I have someone ask me for a raise because they were presented with an opportunity work for another employer who did not mandate politeness.

Studies have shown that compensation tends to rank surprisingly low on the list of things that influence job satisfaction. We know that many CMs do not have lavish salaries and benefits, yet something keeps them coming back to work every single day. And apparently union leadership reached agreements with Disney this weekend on a new contract.

While working for Disney at $9 per hour wouldn't be my first choice, for many it's better than the alternatives given their skill set and job market. I have the utmost respect for people who do help create the magic!

I don't technically disagree with any thing you've written and that is just so sad.

But I'll argue anyway.

It's unrealistic for a company like Disney, one that blatantly peddles "magic," to be a worldwide industry leader because they have to cow-tow to what wall st. dictates? Tell me why is our country in such sad financial shape again??? Unchecked corporate greed and no real leaders???

Disney was a world wide leader in business practices for years. "The Disney Way" was studied, taught and held up as a model. It is true that good pay was never a Disney hallmark but the benefits were outstanding, which we all know would still be a good trade off today if companies weren't in the nickel and dime mode all of the time trying to meet quarterly numbers to please the st.

Lastly, if you think "smiling" and "being pleasant" is the extent that Disney holds CM's to then you are greatly mistaken. They are the face of the company and the persona of the company. Something that has been developed, honed (and admittedly lost a bit) over the years. Why does such an important job merit so little pay in so many people's eyes? Why does the front line face get so much disrespect and pin headed pencil pushers get 30 million? Where are rules that make this so. It certainly isn't fair and it certainly isn't right. You can keep on quoting the standard business talking points, I understand them (my main degree was in business)) but like talk tv, Just repeating things over and over doesn't make it true or just. That comes from more than textbooks. Someday people will wake up.

 

[nytimez]

Walt Disney World employs about 60,000 people. Give each person just a $1 per hour raise and based upon a 2080 hour work year, it would cost them about $124 million dollars. Add in unemployment contributions and matching taxes and you're probably over $150 mil.

Your numbers are WAY off. The current contracts are with 20,000 employees. So, shrink that by a third. So an extra $50 million a year from a company that just made $1.3 billion in profits -- profits -- the last three months alone.

 

[tjkraz]

Just repeating things over and over doesn't make it true or just. That comes from more than textbooks. Someday people will wake up.

No but unfortunately message board discussions aren't going to change the world.

The entire issue of executive compensation is a debate unto itself. Would love to see limits similar to what some countries have adopted. I don't think ANYONE here would argue with that.

Is Iger worth a salary in the high 8 figures? No. But at the same time, we saw what happened to the company when Wall Street turned on Eisner.

We all may like to think of Disney as a leader in many respects, but not even they could sell investors on the idea of lower profitability in the interest of better employee compensation. I wish that weren't the case but we both know it is.

IMO, the best thing we all can do as Disney guests is to go the extra mile to compensate CMs. Housekeeping, valet parking, bell services, restaurant waitstaff, some bus drivers (DME)...those are all tipped positions. Leaving a few extra bucks in the hotel room each day or upon departure isn't going to destroy my vacation budget. Anyone who thinks a housekeeper deserves more than $9 per hour can easily do something to help change that circumstance.

Your numbers are WAY off. The current contracts are with 20,000 employees. So, shrink that by a third. So an extra $50 million a year from a company that just made $1.3 billion in profits -- profits -- the last three months alone.

There are other unions in place at WDW and around the world. We aren't just talking about 20,000 people. As an employer you cannot simply reward one group without the others having their hands out.

And that's just using an illustration of $1 per hour. Some here have suggested raises of $5-7 per hour.

 

[nytimez]

There are other unions in place at WDW and around the world. We aren't just talking about 20,000 people. As an employer you cannot simply reward one group without the others having their hands out.

The company has never given raises to other people simply because one set of people just got one. All these things are negotiated when the time comes. And when the time comes, I hope they're all similarly taken care of.

The point is, even going by your own example, decent wage increases beyond these 2 and 3 percent increments currently under discussion are well within Disney's margins.

 

[tjkraz]

The company has never given raises to other people simply because one set of people just got one. All these things are negotiated when the time comes. And when the time comes, I hope they're all similarly taken care of.

But the time will come. Spend $50 million to give a modest increase to each group--one at a time--and it's likely to add up to $400-500 million of the bottom line, year-after-year.

The point is, even going by your own example, decent wage increases beyond these 2 and 3 percent increments currently under discussion are well within Disney's margins.

So you're the CEO of TWDC. How do you convince Wall Street to continue to invest in your company after you've cost them a half billion dollars in profits--PER YEAR--to dole out salary increases which are not mandated by employee merit, the economy or the job market?

 

[nytimez]

But the time will come. Spend $50 million to give a modest increase to each group--one at a time--and it's likely to add up to $400-500 million of the bottom line, year-after-year.



So you're the CEO of TWDC. How do you convince Wall Street to continue to invest in your company after you've cost them a half billion dollars in profits--PER YEAR--to dole out salary increases which are not mandated by employee merit, the economy or the job market?

1) You're giving a theoretical example based on a fabricated number. I'd prefer to stick to the discussion at hand.

But:

2) Let's pretend it's a real number. If you want to extrapolate that number to some imaginary distance, then let's extrapolate the most recent profit numbers. $1.3 billion for the quarter comes out to $5.2 billion for the year. Minus your $500 million, that's $4.7 billion in profits -- PROFITS -- per year.

If those were my numbers, I wouldn't need to explain anything to Wall Street -- they would fight each other and sacrifice their children just for a chance to invest in my company.

By the way, if every single employee of the Walt Disney Company in every division at every rank, salary and hourly, in every business got a $1 an hour raise, it would still be roughly half the $500 million we just used for your example.

 

[tjkraz]

If those were my numbers, I wouldn't need to explain anything to Wall Street -- they would fight each other and sacrifice their children just for a chance to invest in my company.

You cannot honestly think that is true. When a company makes 5.2 billion one year, investors expect 5.5 billion the next year. Declines are unacceptable no matter how noble the reasons. Every division head--and ultimately the CEO--has to answer for why the tiniest line item has suffered and they want to know what is being done to correct the situation.

Sure investors are glad that ESPN drove the cable networks to a record year and that the film division was strong due to Toy Story 3 and Alice in Wonderland. But they also demand explanations for declines in theme park attendance and DVC sales, and want to know what is being done to correct the situation.

Parks and Resorts actually has some of the smallest margins at TWDC. In 2010 it turned a profit of about $1.3 billion on revenues of $10.7 billion (12%.) By comparison, its media networks had profits of $5.1 billion on revenues of $17.1B (30%.)

P&R is probably the most labor-intensive segment of the company, too. WDW employs 60,000 people and there are another 20,000 at Disneyland. Then add in people from the cruise line, Paris, Tokyo, Hong Kong, Adventures by Disney, DVC, Imagineering, Vero Beach resort, Hilton Head resort, etc.

Use whatever number you wish for total employment of Parks & Resorts: 100k? 120k?

Now calculate the cost of giving them all just $1-2/hour raises...much less the $8 some have suggested. Pretty quickly that $1.3 billion in profits for Parks & Resorts begins to disappear.

It's not enough just to point at the dollars being made elsewhere. Every segment of a business is analyzed to the Nth degree and expected to perform. Cruel as it may sound, you don't just start giving away 25+% of your division operating income for no good reason.

It may just seem like Monopoly money to you and me but it certainly isn't to the pension plans and brokerage houses which help drive up stock prices--the true indicator of value.

 

[Peter Pirate 2]

You cannot honestly think that is true. When a company makes 5.2 billion one year, investors expect 5.5 billion the next year. Declines are unacceptable no matter how noble the reasons. Every division head--and ultimately the CEO--has to answer for why the tiniest line item has suffered and they want to know what is being done to correct the situation.

Sure investors are glad that ESPN drove the cable networks to a record year and that the film division was strong due to Toy Story 3 and Alice in Wonderland. But they also demand explanations for declines in theme park attendance and DVC sales, and want to know what is being done to correct the situation.

Parks and Resorts actually has some of the smallest margins at TWDC. In 2010 it turned a profit of about $1.3 billion on revenues of $10.7 billion (12%.) By comparison, its media networks had profits of $5.1 billion on revenues of $17.1B (30%.)

P&R is probably the most labor-intensive segment of the company, too. WDW employs 60,000 people and there are another 20,000 at Disneyland. Then add in people from the cruise line, Paris, Tokyo, Hong Kong, Adventures by Disney, DVC, Imagineering, Vero Beach resort, Hilton Head resort, etc.

Use whatever number you wish for total employment of Parks & Resorts: 100k? 120k?

Now calculate the cost of giving them all just $1-2/hour raises...much less the $8 some have suggested. Pretty quickly that $1.3 billion in profits for Parks & Resorts begins to disappear.

It's not enough just to point at the dollars being made elsewhere. Every segment of a business is analyzed to the Nth degree and expected to perform. Cruel as it may sound, you don't just start giving away 25+% of your division operating income for no good reason.

It may just seem like Monopoly money to you and me but it certainly isn't to the pension plans and brokerage houses which help drive up stock prices--the true indicator of value.

I know you don't want to debate the big picture and I understand that but can't you at least see that this is unsustainable? We're setting ourselves up for another bubble burst ala the the dot.com and housing fiascos ... Only bigger. I know we can't change this ourselves (on the DIS) but if Americans one by one will realize, or at least consider the possibility that the 'free enterprise' system American's are "believing" in is done with smoke and mirrors. It's a house of cards.

Back to Disney, it's up to the BOD to get some smarts and a view of the future INSTEAD of just meeting quarterly numbers. The few companies who are prepared for the long run will be better equipped to fight the day the day quarterly numbers can no longer be met. Further, nytimz is correct , IMO, in the impact of a magnanamos move were Disney to do it. If Iger, The BOD and upper management were on board it could certainly be sold to the investors.

 

[jarrdisney]

I find it funny that people won't bat an eye at ticket increases, yet they will scream about a slight increase in pay for CM's. It's one thing to analyze the disney business model to argue whether or not they should get raises, but it's different ballgame when you say that they're job is not worthy of a raise. To compare a CM who is "on stage" all day in 90+ degree weather to a teenager in your local town pushing carts, is ridiculous. The lack of empathy and compassion sometimes makes me sick. News flash for those that have no idea what central FL is like. The economy is very much in the toilet just like the rest of the country, and even when it was "prospering" there weren't a whole lot of high paying jobs in the area. The whole "find some other place to work" arguement is lame. For most people there are NO other jobs. Some of you watch way too much Glenn Beck.

 

[nytimez]

Costco and Google, just to name a two completely different types of firms, both have reputations for treating employees well from the top to the bottom -- and they are sought-after stocks.

One study last year found that treating your lowest earners well HELPS the bottom line.

The notion that this can't be done is belied by the fact that it IS being done, right now, by highly successful companies. And Disney ain't one of them. See who's missing from the new list of the 100 best companies to work for.

Looks to me like there are some pretty successful companies on that list -- companies most investors would want in their portfolios.

 

[TheBig2na]

Some people would like America to give everyone the chance to make their way ... You know, the American Dream? But then others are lemmings who follow the corporate mantra of greed and 'me first'. Tell me, why aren't you supporting Iger's raise? Everything else you say indicates that you would think he's earned it because he works so hard...

Sounds very Communist. Not every job gets paid the same and people in charge of billion dollar companies should be paid well. You don't want rubes running the show. Imagine the mayor of a major city only getting paid $40,000 a year. No smart business men would run because they can get more money working elsewhere. Although a CEO making hundreds of millions of dollars is obscene by any stretch of the imagination, that is his deal, just like the Cast members who sign up for a job getting $10 an hour. We all want to be paid mroe and have the right to fight for it, but a minimum wage job is a minimum wage job for a reason. We don't need rocket scientists, running Space Mountain.

 

[Peter Pirate 2]

Sounds very Communist. Not every job gets paid the same and people in charge of billion dollar companies should be paid well. You don't want rubes running the show. Imagine the mayor of a major city only getting paid $40,000 a year. No smart business men would run because they can get more money working elsewhere. Although a CEO making hundreds of millions of dollars is obscene by any stretch of the imagination, that is his deal, just like the Cast members who sign up for a job getting $10 an hour. We all want to be paid mroe and have the right to fight for it, but a minimum wage job is a minimum wage job for a reason. We don't need rocket scientists, running Space Mountain.

You think that giving every American the chance to earn a decent wage sounds communistic??? I never said anything about everyone making the same wage. You don't like socialism, fine. We know it doesn't work but you're still buying the capitalism crap being peddled to you by the very, very, very rich. OK.

 

[nytimez]

You think that giving every American the chance to earn a decent wage sounds communistic??? I never said anything about everyone making the same wage. You don't like socialism, fine. We know it doesn't work but you're still buying the capitalism crap being peddled to you by the very, very, very rich. OK.

People sure seem to love throwing the "C" word around when they don't like what they hear these days, don't they?

To me, it's become code for "you can ignore everything I say after this."