Interesting read with the Staggs and Iger salary discussions

[Teamubr]

Found this story on Forbes regarding maximizing shareholder profits. http://www.forbes.com/sites/stevede...ds-dumbest-idea-maximizing-shareholder-value/

It started reading like a lesson on differing management strategies and then I got to the bullet points about 2/3rds of the way. Nearly everyone of the points has been cited here as to poor practices by Iger.

Given many on DIS are stock holders, I was wondering your take on this.

I don't know enough about Iger, Staggs or Rasulo to have an intelligent conversation, so I figured I'd let you all have at it.

j

 

[mcd2745]

Almost all corporations, not just Disney (although they are a prime example), are guilty of all of those bullet points - particulalrly the first one regarding "pervasive short-termism" because pretty much all the others on the list are done to satisfy that short-termism. Today, every company's CEO & BoD are just quarter-to-quarter slaves to the hege funds and pension funds. No one is concerned with building sustainable, long-term value. It's "bleed every possible penny of profit this quarter" so 'the Street' doesn't get upset with us and demand our heads on a silver platter, and we'll worry about next quarter...next quarter. Having hedge fund and pension fund managers basically controlling every major decision made inside the board rooms of almost all corporations is possibly the single greatest problem in our economy.

 

[jtwibih]

I was having this conversation about the company I work for today with a friend of mine. I think my company is in the same spot as Disney. We have been at the top of the food chain for so long that we have become complacent. The product is suffering but the prices continue to rise annually. The long time customers complain about how things used to be but it hasn't resonated with anyone yet because in the grand scheme of things, it's just a few. What makes me sad is that this article will not even be a blip on the radar to the decision makers at most major corporations. They are too far gone. Greed is the name of the game now. There's not going to be a CEO appointed to Disney in the near future that will try to do it the "right way" unless consumers speak with their wallets.

 

[jtwibih]

Of course, I say this and I have a trip booked in November..........

 

[JZCubed]

Almost all corporations, not just Disney (although they are a prime example), are guilty of all of those bullet points - particulalrly the first one regarding "pervasive short-termism" because pretty much all the others on the list are done to satisfy that short-termism. Today, every company's CEO & BoD are just quarter-to-quarter slaves to the hege funds and pension funds. No one is concerned with building sustainable, long-term value. It's "bleed every possible penny of profit this quarter" so 'the Street' doesn't get upset with us and demand our heads on a silver platter, and we'll worry about next quarter...next quarter. Having hedge fund and pension fund managers basically controlling every major decision made inside the board rooms of almost all corporations is possibly the single greatest problem in our economy.

Disney has enough content to be a different player.

Content from classic Disney and a host of other excellent product make Disney unique in the marketplace.

But yes, most every company would be guilty of those bullet points and guilty of being driven by quarter-to-quarter results.

Corporate results can include lower profits if they are a result of investment. Disney can invest in the Parks if they can get a positive rate of return...or they can invest in hotels with an incentive (60-day FP+) to stay on-site. Shareholders do not demand every growing profits if an investment in the future can be gained.

I'm not convinced Magic Bands were a better investment for Disney than the increased demand from new rides in Hollywood Studios, although, my family prefers FP+ to the old system. Also, Disney needs something new to rival Harry Potter (and few expect AvatarLand to be that something) for fear of looking like it is too old and tired as the 50th Anniversary approaches.

Rumors have been swirling for years. Someday, something bold for Hollywood Studios will be announced....someday....

 

[jtwibih]

Magic Bands are a cherry on top. Everything in one spot to make the vacation a little more convenient. FP+ is another subject that has its pros and cons. I do not buy merch because of FP+ or spend additional money somewhere else. It's not the reason their profits have been soaring. Price increases and cost cutting = $$$$$

By the way, I would love to give WDW money for merchandise but this uniform approach across all shops is boring and lacks any real inspiration.

 

[Teamubr]

Content from classic Disney and a host of other excellent product make Disney unique in the marketplace.

But yes, most every company would be guilty of those bullet points and guilty of being driven by quarter-to-quarter results

I do think the classic Disney is a different commodity, but it feels like there has been too much reliance on that legacy while moving further away from it.

And most companies may fall into the bullet points. I work in healthcare at one of the top 10 academic facilities. Our industry is very much in transition/turmoil with uncertainty with the ACA and aging, sicker patient populations. A good year for most hospitals is running a 3% margin. Many are in the red without government subsidies because they serve key markets. If we get complacent or fall for many of those bullet points, our competitors will put us out of business.

Different worlds.

j