Robert A. Iger, who took over as the Walt Disney Company's chief executive on Saturday, will earn $2 million a year in salary and is eligible for a yearly bonus of about $7.25 million as long as the company meets certain performance standards, according to federal documents filed today.
Mr. Iger also agreed to remain as chief executive until 2010.
At the same time, the company disclosed that Michael D. Eisner, Mr. Iger's predecessor, resigned from Disney's board and will no longer provide any services for the company. Mr. Eisner is leaving several months earlier than expected. His bonus for fiscal 2005 is expected to be disclosed before next year's annual meeting. Even with his departure, Mr. Eisner is one of Disney's largest shareholders with 13.9 million shares, according to the company's most recent proxy statement.
Mr. Iger was previously Disney's president. Mr. Eisner, who said last year that he would not seek to renew his contract in 2005, left the company after a shareholder revolt in 2004 stripped him of his chairman's title. Disney's current board chairman, George Mitchell, the former senator from Maine, will leave the board after Disney's next annual meeting. The board is expected to resume its search for a new chairman soon.
The $7.25 million bonus figure is a target amount. The actual payment could be more or less based on performance. It will be paid in either cash or stock, as determined by Disney's compensation committee. Mr. Iger is also eligible for a long-term incentive award in either restricted stock units or options. That amount has a targeted value of no more than $8 million, or four times his annual salary.
Mr. Iger's bonuses and awards are based on the company's exceeding certain standards, including how the share value fares against the Standard & Poor's 500-stock index as well as internal goals.
Mr. Iger will receive a one-time grant of 500,000 stock units. Each unit is equivalent to a Disney share and will become vested based on performance. According to Disney's proxy, Mr. Iger owned 126,971 shares of Disney's stock as of Sept. 30, 2004, and has options for a total of 5.5 million more.