October 14, 2020

Warren to Walt Disney Company: Explain Why You Have Prioritized Risky Stock Buybacks, Dividend Payments, and High Executive Pay Over Your Own Workers

Senator Warren Also Asks Whether Disney Will Sustain Health Care Benefits for Employees They Lay Off During the Pandemic

Text of Letter (PDF)

Washington, DC -- United States Senator Elizabeth Warren (D-Mass.) sent a letter to the Executive Chairman of The Walt Disney Company to obtain information on the company's announced layoffs of 28,000 workers and the company's recent prioritization of stock buybacks, dividend payments, and high executive pay may have exacerbated its current financial problems. 

"In the years leading up to this crisis, your company prioritized the enrichment of executives and stockholders through hefty compensation packages, and billions of dollars' worth of dividend payments and stock buybacks, all of which weakened Disney's financial cushion and ability to retain and pay its front-line workers amid the pandemic," Senator Warren wrote. "I would like to know whether Disney's financial practices have impacted the company's decision to lay off workers and whether your company plans to extend health care or other critical benefits and protections to laid off employees."

Disney recently announced that the company will be laying off 28,000 workers, citing in a September 29th memo the "difficult decision" the company had to make as a result of the COVID-19 pandemic. The memo claimed that the decision was "exacerbated in California by the State's unwillingness to lift restrictions that would allow Disneyland to reopen." However, the memo and subsequent communications ignored Disney's decisions in recent years to invest heavily in share buybacks that left the company in its cash bind, to spend tens of billions of dollars enriching executives and shareholders via dividend payments, and to restore over-the-top salaries for its top executives even as the pandemic continues to impact operations. 

The letter requests more information on the Board's actions prior to the announcement of these layoffs and why Disney has prioritized risky stock buybacks and high executive pay over its own workers. It specifically asks for more information on which workers will be laid off and how the decisions about who to lay off was reached, the specific monthly cost savings expected for Disney as a result of these layoffs, whether Disney will provide laid-off employees with guaranteed health benefits or other forms of protection during this public health crisis, and to what extent share buybacks and dividend payments in recent years have benefited top executives and members of the Board.

Senator Warren has requested a response from Disney by October 27, 2020.