New York (CNN Business)Senator Elizabeth Warren slammed Disney earlier this month over layoffs and other decisions that she says prioritized shareholders over employees. Now Disney has responded — and Warren is not satisfied with the company's reply.
Last month Disney said it was laying off 28,000 people in the US as the pandemic decimated its parks and resorts business. Shortly after that, in a letter on October 13, Warren skewered Disney for making "short-sighted" business decisions that blew through the company's capital, while "showering its top executives with over-the-top compensation packages and salaries."
Disney (DIS) CEO Bob Chapek responded to Warren in his own letter on Tuesday, saying that the senator's "indictment that our past actions somehow weakened our financial cushion and our ability to retain and pay workers amid the pandemic is ill-considered and misleading."
"As you are well aware, this unprecedented crisis has had a devastating impact on companies nationwide, and businesses large and small have had to take the difficult steps required to weather the impact," he added.
Warren responded in a statement on Wednesday: "Disney won't answer my questions because it has no good answers. The company said it was simply unfeasible to keep paying workers yet had no explanation for how it was feasible to restore senior executive pay."
Chapek agreed earlier this year to take a 50% pay cut, and executive chairman Bob Iger agreed to forgo the remainder of his salary. Thousands of Disney vice presidents and above also took temporary pay cuts of lower percentages earlier this year -- but in August, Deadline reported, those cuts ended. (It's not clear that Iger and Chapek's voluntary cuts were reversed by that decision.) Warren also noted in her letter earlier this month that base salaries represent a small portion of Disney executives' overall compensation.
Disney did not immediately respond to a request for comment about Warren's statement.
Warren added on Wednesday: "Disney spent its emergency fund by handing out billions of dollars to its top wealthy executives and shareholders in stock buybacks and dividends," but once the pandemic hit its business, it "left thousands of workers holding the bag."
In his letter, Chapek noted Disney closed its domestic parks in March but continued to pay employees for "well over a month."
"As the pandemic persisted, we had to make the difficult decision to furlough employees while continuing to pay the full cost of their health coverage," Chapek continued. "More than six months after closing our domestic parks, with the outcome of the pandemic still very uncertain, we had no choice to lay off a number of non-working employees."
Chapek added that Disney's financial decisions over the past few years are "wholly unrelated to the need to lay off workers."
"As we have stated, given the ongoing uncertainties of this pandemic, including limits on capacity to promote social distancing, and the State of California's refusal to permit a safe reopening any time soon, it unfortunately is not feasible to pay non-working employees indefinitely."
