Disney is reducing the amount of stock-based compensation that some tech employees can earn, Business Insider has learned.
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Two Disney software engineers said the ceiling for their potential long-term incentive awards — restricted stock units tied to performance that vest semi-annually over three years — is being cut to 25% of their base salary, down from 35%.
“There’s no way to sugarcoat it — this is a reduction in your total compensation,” a director recently told one of the tech employees, according to a recording of the conversation obtained by Business Insider.
This director said the change in stock-based pay was “totally unrelated” to their “performance or office status.”
Disney leadership “did a marketplace analysis, and they’re making an adjustment to the strategic component of their pay,” the director said.
Then the director read from a prepared statement, saying Disney “recently completed a review of the US and Canada technology compensation market to ensure our hiring and compensation remain competitive and aligned with business priorities and the broader technology marketplace.” It was not immediately clear how many employees would be impacted by the changes.
When the employee asked if the decision could be challenged, the director said: “Their statement is: ‘This decision has been made and is being applied across technology teams around the company.'” The director said their own compensation would be impacted.
The second software engineer told Business Insider that they were told the cuts reflect a broader pullback in stock-based pay across the industry.
The change does not affect stock awards that staffers have already received.
Disney’s long-term incentive plan is “an integral part” of employees’ total compensation, along with their base salary and annual bonus, according to a screenshot of the employee handbook viewed by Business Insider.
“Awards are approved as a dollar value, which is then converted into RSUs using the Fair Market Value of Disney’s stock on the date of grant,” the handbook said.
Disney’s stock has struggled and is roughly flat in the last decade, while the S&P 500 index has more than tripled. Shares have rallied 12.3% from a late-March low, though they remain down by more than 44% over five years.
Disney laid off employees in mid-April as part of a reorganization of certain teams, including marketing. Laid-off employees received severance pay based on their level and tenure.
This new reduction in stock awards for Disney staffers comes as the broader tech industry races to adapt to AI, with many companies laying off workers and finding other ways to cut costs.
Major companies like Amazon, Oracle, and Meta have announced layoffs. Meta is planning to cut 10% of its staff in May, with additional layoffs possible later. Consulting giant Deloitte is scaling back benefits, like PTO and parental leave, for some employees.
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