EXECUTIVE COMPENSATION
2020 Compensation Decisions
This section discusses
the specific decisions made by the Compensation Committee in fiscal 2020. These decisions were made taking into consideration the results of the most recent shareholder advisory votes on executive compensation.
Employment Agreements
NEO BASE SALARY REDUCTIONS
In March 2020, as
part of a series of measures to better enable the Company to weather the extraordinary business challenges the COVID-19 pandemic presented, each of the Companys NEOs agreed by irrevocable waiver to
effect a temporary reduction in the base salaries otherwise payable under their respective employment agreements, effective with the payroll period commencing April 5, 2020. Mr. Iger agreed to forgo, through the last payroll period in
fiscal 2020, receipt of all but that portion of his base salary necessary to fund, on an after-tax basis, his contributions to continue to participate in the Companys health benefits plan.
Mr. Chapek agreed to forgo receipt of 50% and each of Mr. Braverman, Ms. McCarthy, Ms. Parker and Ms. Mucha agreed to forgo receipt of 30% of the base salary, which reductions remained in place April 5 through
August 22 of 2020.
ENTRY INTO MR. CHAPEKS EMPLOYMENT AGREEMENT
In February 2020 in connection with Mr. Chapeks appointment as Chief Executive Officer, the Company and Mr. Chapek entered into an employment agreement
with a term commencing February 24, 2020 and ending on February 28, 2023. The employment agreement provides for Mr. Chapek to be elected as a member of the Board, for a base salary of $2,500,000, eligibility for an annual,
performance-based bonus and that the Compensation Committee will set a target bonus each year of not less than 300% of the annual base salary for Mr. Chapek in effect at the end of the preceding fiscal year. The employment agreement also
provides that Mr. Chapek is entitled to participate in the Companys equity-based long-term incentive plans and programs generally made available to executive officers of the Company. For each fiscal year during the term of the employment
agreement, Mr. Chapek will be granted a long-term incentive award having a target value of not less than $15 million. The agreement provides for additional equity-based long-term incentive awards in respect of Mr. Chapeks
services for the current fiscal year to reflect his service as Chief Executive Officer for the remainder of the fiscal year.
Other material terms of the employment
agreement with Mr. Chapek are described under Compensation Program Elements, above, and Compensation Tables Potential Payments and Rights on Termination or Change in Control,
below.
AMENDMENT TO MR. IGERS EMPLOYMENT AGREEMENT
In February 2020, in connection with Mr. Iger stepping down as Chief Executive Officer, the Company and Mr. Iger entered into an amendment to
Mr. Igers employment agreement to reflect Mr. Igers continuing full-time employment in the position of Executive Chairman rather than as the Chief Executive Officer and to confirm that in such position he directs the
Companys content creation.
DECEMBER 2019 IGER BONUS ELIMINATION
The amendment dated March 22, 2017 to Mr. Igers employment agreement provided that Mr. Iger would receive a bonus of $5 million if he completed
the term of his employment through July 2, 2019. In response to shareholder feedback regarding total compensation, the Committee discussed with Mr. Iger, and Mr. Iger agreed to the elimination of that $5 million bonus.
AMENDMENT TO MR. BRAVERMANS EMPLOYMENT AGREEMENT
In October 2019, the Company and Mr. Braverman entered into an amendment to Mr. Bravermans employment agreement extending the term of
Mr. Bravermans employment from December 31, 2020 to December 31, 2021. Additionally, the amendment increased his annual base salary to $1,750,000 effective September 26, 2019, and thereafter, Mr. Bravermans
salary shall be determined by the Company in its sole discretion but shall not be less than $1,750,000. The amendment also increased the target annual long-term equity incentive award value from 300% to 350%
of his annual base salary, subject to adjustment.
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THE WALT DISNEY COMPANY NOTICE OF 2021 ANNUAL MEETING AND PROXY STATEMENT 35