The Wall Street Journal’s recent dive into the downfall of Bob Chapek’s career revealed an important turning point that ultimately led to the feud between Chapek and Iger. At the start of the pandemic in early 2020, Chapek had taken over from Iger and faced global shutdowns of Disney parks and other segments of the company. He wanted to move quickly to lay off thousands of Cast members to cut costs.
Egger, who was still CEO, disagreed. The CARES (Coronavirus Aid, Relief, and Economic Security) Act was pending, and Iger wanted those protections in place so furloughed staff members would qualify.
Participants in the college program were let go and repatriated by March 18, which was likely in part because they were in a community living situation and at higher risk of spreading the coronavirus. The Walt Disney World Resort closed on March 16, two days after the Disneyland Resort, and it wasn’t until March 27 that the CARES Act was signed. Meanwhile, Disney continued to pay the cast members. It seems that this action was thanks to Iger.
On March 27, the company announced that it will continue to pay Cast members through April 18. Finally, on April 2 (as soon as the coast was clear), they announced company-wide vacations, including most employees at the parks. More vacations took place over the following year.
One of the subsequent major layoffs (more than 28,000 employees companywide) came shortly after it was announced that executives’ pay would be brought back. Initially, Chapek lost 50% of his salary and 100% of his salary. Trying to smooth out the losses. The pay cut went from March 2020 to August 2020.
When the layoffs were announced in October, Senator Elizabeth Warren wrote a letter to both Chapek and Iger regarding returning executive salaries amid the ongoing furloughs. Chapek’s response read: “As you well know, this unprecedented crisis has had a devastating impact on businesses nationwide, and businesses large and small have had to take the difficult steps required to overcome the impact…”
Had Chapek laid them off before the CARES Act, they may not have been eligible for government assistance. As it was, many of the cast members relied on food banks and other local support systems.
One of Iger’s biggest concerns about Chapek was his immediate response to stock numbers, including skyrocketing prices on the parks. Chapek lamented his reputation as a “bean counter” despite his actions.
Chapek was let go on November 20, with Iger immediately taking on the effective CEO role. The campaign to oust former Disney CEO Bob Chapek has already begun in the summer. Several executives contacted the Disney board with complaints about Chapek’s ability to lead. This was all reported by the Financial Times, with the outlet specifically picking Disney CFO Christine McCarthy as the one to lead the charge to replace an executive he disliked.
Chapek is reported to be receiving a severance package worth more than $20,000,000.
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