The childhood dream producing company has been criticized over financial inequality between workers. Abigail Disney, the heiress of the Walt Disney Company, has expressed her frustration towards the Chief Executive Officer (CEO) of her family business, Bob Iger. After finding out that Iger received 65.6 million dollars in 2018, Ms. Disney became furious and stated, “no one on this freaking planet is worth that kind of money.” Although she has been living under the radar for many years, she has spoken for many who believe in the unfairness of huge pay gaps. What first seemed like a problem within Disney is actually an issue amongst those who may think that CEOs are overpaid.
Ms. Disney has, by far, one of the most renowned names in American history, but many may not be familiar with her. She is the granddaughter of Roy Disney, the co-founder of the Walt Disney Company, and is an Emmy-award-winning documentarian. She used Twitter to exclaim her thoughts on the “insane” salary the CEO of her family company is receiving. In an interview with Fast Company, she made a point on how in capitalistic societies people who are on top are valued more than the people who work for them.
After her visit to the Anaheim talk, she was shocked to see how low the living standards of workers were and boldly stated that “this is never the company my grandfather wanted to start.” This does not mean, however, that she is criticizing Iger’s business operation. She is merely trying to stress her opinion that an individual is earning “too much money.” Furthermore, this is not just a criticism on Iger’s wage, but in general on how society is handling capitalism. Ms. Disney has a point on whether an individual needs or deserves such uncountable amount of money. In 2018, according to Business Insider, Iger ranks among the top five highest paid CEOs in the United States (US), in which he takes away 1424 times the median pay of a Disney worker.
▲ Abigail Disney
The Adult Talk in Disney
Disney responded to her criticism by saying they have made “historic investments to expand the earning potential and upward mobility of the workers.” Furthermore, it suggested it increased pays more than the federal minimum wage and gave 125,000 employees a 1,000-dollar bonus. However, this does not brush off the fact that Iger took a 10-million-dollar bonus for himself and there is an “insane” gap between the minority and majority. According to Professor Kim Dong-One (School of Business Administration), pay gaps have always existed; however, it becomes a problem when there is an extreme gap, or when the CEO is taking a disproportionate amount of money to the profit the company is making.
Moreover, Ms. Disney went further with her view on the wage gap to criticize Amazon, saying, “Jeff Bezos could just pay people well at Amazon.” This is not the first time, however, that Amazon was criticized by how it treats its workers. Bernie Sanders shared a shocking story from an anonymous worker in the Amazon factory about how people were expected to work like robots. The further criticism by Ms. Disney suggests that the problems of wage gaps do not just apply to Disney but to other companies as well.
It would be a misunderstanding of Ms. Disney if what she is claiming is classified as communism. She is pointing out the core misconception of money, that having more of it makes one a better person, when, in contrast, money accumulated solely to an individual is a waste and could be shared with others to lift their life up. Therefore, she is for the idea of wealthy people paying higher taxes, which is one of the policy proposals by Democratic contenders.
▲ Professor Kim Dong-one
Korea’s Position in the Wage Gap
Korea is an interesting country to look at when it comes to companies and family relations. Chaebol is a word combined with rich and clan to describe conglomerates of affiliated companies controlled by families such as Samsung, Hyundai and so on. They are at the center of the Korean economy and have had close ties with politics for a long time. The founders of such companies contributed to the rapid economic growth of Korea and have been cooperative with the government for the benefit of each other.
In terms of payment of CEOs, Korea positions in the middle. According to Professor Kim, there are two types of companies—competitive and equal. Japan is on the equal side where CEOs get only eight to ten times higher than the average workers’ payment, whereas in the United States (U.S.) it is acceptable for CEOs of successful companies to get paid substantially more in recognition of their competence. Equality in paychecks differ in industries as well. For example, companies in the Information Technology (IT) industry are willing to give a substantial amount of money to scout talented minds as innovative ideas and a quick response to change are keys to success. However, in manufacturing businesses, creativity is not required as much and so the payment gap is smaller.
Most Korean chaebols are known for IT businesses and their pay gap is getting larger like the U.S. in order to compete with foreign companies in scouting people. Recently, some high ranking chaebols have been criticized for their secret investments and wrongdoings of the family owners. In short, the issue of income inequality is global and there are various reasons that follow.
Difference in payment is necessary for the efficiency of the workers and for CEOs or senior management members to present themselves with authority and respect. However, taking 1000 times the average income of workers is unnecessary even for a successful company like Disney. A good CEO is not only talented in running a business, but someone who is able to receive respect from those who are considered to be at the bottom of the pyramid in the company. Ms. Disney’s bold statement certainly ignited the embedded societal problems and reevaluated the responsibility of executives who have massive influence over the lives of the people who work for them.