The Walt Disney Company (DIS) has decided to handsomely reward its CEO Bob Iger after a year of robust profits. The company in its regulatory filing has laid down the executive compensation that has to be approved by shareholders at its Annual General Meeting on Mar 12, 2015.
As per the filing, Iger’s salary remains unchanged at $2.5 million, but he has received a huge bonus worth $22.8 million. Apart from that he will receive stock-based compensation of $17.3 million and another $3.9 million in other items, taking his total pay to $46.5 million as calculated by Bloomberg.
Iger, who has spearheaded Disney since Oct 2005, also had his tenure extended for two more years in Oct 2014. He will now step down in Jun 2018 instead of 2016.
Under Iger’s leadership, Disney had a fantastic fiscal 2014. The success of Frozen, followed by Marvel’s Captain America: The Winter Soldier and Maleficent, led the company to post better-than-expected results in all four quarters. In the year, Studio revenues of $7.3 billion grew 22% while operating income of $1.5 billion increased over two folds.
The roaring success of the movie business also translated into great business opportunities for its Consumer Products division. Frozen associated toys were one of the most demanded toys in the last holiday season. Moreover, Parks & Resorts continued with their good run. Revenues grew 7% while operating income marked an increase of nearly 20% in the fiscal.
Since Iger joined Disney, the company has seen its market cap grow 229% to $150.5 billion. Shareholder returns increased 317%, much above its peers. Compounded annual growth rate (CAGR) of income from continuing operations and earnings per share grew 13% and 15%, respectively. Revenues grew nearly 52.8% to $49 billion since fiscal 2005.
Going ahead, Iger has successfully laid down Disney’s business strategy for the next few years that will enable to retain its market share in the competitive media circle that boasts of giants like Twenty-First Century Fox, Inc. (FOXA), CBS Corporation (CBS) and Time Warner Inc. (TWX). These include robust line up 21 movies over the next three years including bringing in a number of new marvel characters to celluloid after a “Marvel”ous 2014.
Disney will be reviving the epic space saga Star Wars. Stars Wars: The Force Awakens, is scheduled for a Dec 18, 2015 release, and Episode VIII and IX will likely release in 2017 and 2019, respectively. Star Wars, belonging to Lucasfilms, is one of the most popular as well profitable movie franchises ever.
Also, after phenomenal success of Frozen, Pixar has a quite a number of animated movies, which include Inside Out, The Good Dinosaur and Finding Dory with Zootopia from Disney Animation. Moreover, 2017 will have Toy Story 4.
Disney plans to add Marvel-themed attractions at its Hong Kong Park. The company is also developing ideas on adding Star Wars in its parks. The Shanghai Park construction is already underway and is touted to be long-term growth strategy for the Asian markets.
At present, Disney is a Zacks Rank #3 (Hold) stock.
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