As of right now, things aren’t great at many Hollywood film studios. Most of the industry’s film and television writers have been on strike for months. And for the past three weeks, they have been joined by nearly all of Hollywood’s actors. Film and television productions are at levels not seen since the height of the pandemic, and the studios are losing money hand over fist as they are forced to either completely halt or delay major productions. SAG President Fran Drescher has said that the union is financially prepared to be on strike for at least six months.
With Hollywood at a near pause, that leaves many wondering. What can be done to end the strike?
Disney CEO Bob Iger has been facing a ton of backlash for comments he made during a recent interview. Iger said that SAG was not being “realistic” in some of its demands. He was immediately called out by a number of actors, including Drescher, who said that he had no right to talk about what was realistic when he makes approximately $78,000 per day.
Iger’s current contract gives him a base pay of $1 million per year, with a $1 million bonus. The then can make up to $25 million per year with his long-term incentive plan. This means that he is given specific goals to increase the value of Disney shares. When he meets those goals, he gets the bonus. If he gets his entire bonus, he would make around 40 times as much as the average Disney employee. That’s not including what he has in Disney stock options.
And Iger is not alone. A 2022 report by the Securities and Exchange Commission revealed how much the CEOs of most production companies make compared to the average employees. The results were expected, but still somewhat startling. Bob Chapek was the CEO of Disney at the time the report came out, and Disney could pay 446 employees a full year’s salary for what they paid Chapek. The CEO of Netflix made as many as 226 employees combined. Then there was Apple CEO Tim Cook, where his compensation compared to Apple employees was 1,177 to one.
Every three years, the SEC requires company shareholders to vote on the compensation packages of its executives, although it can happen more often. This is called Say On Pay. Should Iger and other studio heads continue to be unable to come to an agreement with its writers and actors, shareholders could decide that Iger is not worth the money he is being paid. They may find it difficult to justify paying Iger millions when actors are striking because they don’t make enough to qualify for SAG health insurance, and the income threshold is only $26,470.
It would not be the first time shareholders decided a CEO was making too much. Most notably, Netflix shareholders rejected the pay packages for the top executives. Warner Bros. Discovery also admitted that, while its executive packages were approved, it was only by 50.8% of the voters.
There are several major issues at the heart of both the SAG and WGA strikes, and a lot of it has to do with streaming. Streaming platforms took off during the pandemic, and the unions and studios weren’t prepared on how to properly deal with pay in regard to streaming. Writers are making less now than they were a decade ago because shows typically don’t have as long a season when they are made for streaming. Both actors and writers are also fighting for the studios to be fair when it comes to residuals from streaming.
