Activist and filmmaker Abigail Disney told lawmakers The Walt Disney Co.’s pay practices don’t align with “the values my family taught me” and that the media business her grandfather built should be paying workers higher wages.
“Disney could lead once more,” said Disney — an heir to the family fortune — on Wednesday during a House Financial Services subcommittee hearing. “All it lacks, ironically, is the imagination to do so.”
Disney emerged as a critic of corporate pay practices earlier this year when she responded to a question by calling CEO Robert Iger’s $65.7 million pay, which is 1,424 times a median worker’s yearly earnings, “insane.” Many public companies began having to disclose the divide between pay to their CEO and a median employee last year.
Democrats praised Disney during her appearance before the House panel on Wednesday, while Republicans objected to her comments. The meeting — which was held to discuss four draft bills from members of the Democratic majority — became contentious. Republicans attempted to adjourn the gathering after Chairwoman Carolyn B. Maloney, D-N.Y., allowed a camera crew to film Disney for a potential documentary on income inequality.
Disney told the capital markets subcommittee that Walt Disney is an emotional, moral brand and should address the issue of worker pay by raising salaries, offering stock to workers broadly and representing employees on the board. She described both investors and workers as key stakeholders that companies must consider.
Disney said Congress should direct companies to report information about how they manage their workforces, the subject of draft legislation up for discussion. Disney added that pay ratio disclosure rules should be adjusted to compare CEO compensation to that of a company’s lowest-paid full-time worker to make that employee visible and expose disparities in industries with some concentration of higher-paid workers, such as banking.
“If you can’t afford to pay your workers a living wage then you can’t afford to hire your workers,” Disney said.
Rep. Maxine Waters, D-Calif., chairwoman of the full committee, praised Disney for her comments and for appearing to “tell the truth about what is happening at the family business.”
Republicans disagreed with Disney’s comments. Rep. Sean P. Duffy of Wisconsin asked the five panelists speaking, including Disney, about their yearly earnings and specifically questioned how much Disney pays the lowest-earning worker in her household. She responded that she pays that employee $75,000 annually.
Rep. Trey Hollingsworth of Indiana, the second-highest ranking GOP member of the subcommittee, asked Disney a series of questions about how much Iger and workers should be paid and an ideal pay ratio. He said there aren’t specifics on what CEO pay and a living wage in different areas should be and that experts shouldn’t be deciding unilaterally.
“We have a definition of that,” Hollingsworth said. “That is socialism.”
Disney said in an interview following the hearing that his characterization is inaccurate.
“What we’re talking about is repairing the system we have,” she said. “If they’re afraid of socialism, they really better spend some time repairing this system. Otherwise they’re going to have socialism whether they like it or not because people are angry. So how about we put our minds together and figure out how to repair this system.”
Disney said during the interview she intends to focus on income inequality for the next few years and wants to see both legislative and larger ethos change to bring greater equality. She said corporate practices changed with the popularity of economist Milton Friedman, who preached free-market capitalist practices, and that her grandfather, Roy, had co-founded Walt Disney with a different sensibility.
“It didn’t matter who was going to pressure him from Wall Street, this is what he was going to do because it was the right thing to do to treat his workers fairly, to make sure they had money to retire on, to have them at the company for long periods of time and not just constantly be churning them through,” she said.
Based in Burbank, Calif., Walt Disney creates movies and television shows, owns networks including ESPN and ABC and runs its namesake theme parks. It was already the largest U.S. media company by revenue before a recent acquisition of most of competitor Twenty-First Century Fox Inc.’s assets.
It’s both the moral brand Walt Disney is selling and the size of the company that necessitates it be a leader on changing worker pay standards, even though it’s not the worst offender in terms of CEO-worker pay chasms, Abigail Disney said.
“If one company as visible as Disney chose to step out and do the right thing on this issue, there would be other companies that follow and then we’d begin to see a change in the ethos,” she said.
Walt Disney Co.’s corporate communications did not immediately respond to a request for comment.