Corporations’ responsibility is to grow their profit for the benefit of the shareholders. By doing that properly they are going to elevate all employees, brown-skinned, black-skinned, or gay. It should be fairness above all else.
Ed Rensi (former McDonalds CEO on Fox Business)
Ed Rensi used to run McDonalds, as diverse a company as any, and he thinks Disney should fire CEO Bob Chapek for putting politics before profits. Last year, Chapek made $32.5 million. Disney’s stock now ranks among the worst-performing; dropping from $200 to $118 per share in 12 months and losing $46.6 billion in market cap since February 2022. Rensi is right that “corporations should not get involved in social engineering” (especially in tough times).
By any objective measure, Disney is in the worst of times. COVID turned theme parks into ghost towns, disrupted supply chains, and increased costs. Faced with runaway inflation, US households are cutting costs. On Friday, the Fed signaled a half-point hike in interest rates and stock indices fell about 3%. Chapek thinks he’s living in the age of Aquarius, while Governor Ron DeSantis (R-FL) is out to prove it’s more like Fantasyland.
Rensi told Fox Business that Disney has “no business being on the right or the left because they represent everybody.” The Wall Street Journal was less charitable: “The Walt Disney Co. needs Florida more than Florida needs Walt Disney. That’s the latest chapter in this tale of a CEO who followed his woke staff like a lemming off the cliff of cultural politics.” It’s not a good look in a red state.
Disney is in an unenviable position. Presidential hopeful DeSantis says Disney meddled in a “pro-parent” bill. The LGBTQ movement says Disney half-heartedly opposed an “anti-gay” bill. It’s a rare feat, creating bipartisan wrath. So, Chapek has that going for him.
The Mouse Who Roared
It’s not “old fashioned” to think CEOs serve shareholders. It’s “old fashioned” for CEOs to have personal fiefdoms and go to war with a state’s governor. In fact, Chapek’s first instinct was to not get involved with Florida’s Parental Rights in Education bill by explaining in a memo that “corporate statements do very little to change outcomes or minds.” An insider explained Disney’s CEO “staunchly opposed” taking on issues that are “irrelevant to the company and its businesses.”
Bob Iger (Disney’s ex-CEO) begged to differ, telling CNN, “A lot of these issues are not necessarily political. It’s about right and wrong.” Not political? When Democrats renamed the bill the “Don’t Say Gay” law, some Pixar employees demanded Disney stop funding Florida Republicans, some workers staged a walkout for TV, and the Human Rights Campaign (very publicly) returned Disney’s $5 million contribution. THAT is political pressure, and Chapek caved to the activists.
After apologizing for not having “stood up for” the LGBTQ+ community, he claimed Disney’s goal was “for this law to be repealed by the Legislature or struck down in the courts.” He pledged “to be a better ally for the LGBTQ+ community” and committed Disney “to supporting the national and state organizations” opposed to the Parental Right in Education law. THAT is a political position, which Florida’s Republican governor counter-attacked.
Because DeSantis knows 66% of US voters don’t want teachers to discuss gender with children until fourth grade, he felt a California CEO was in no position to dictate Florida politics, especially when a Florida-only sweetheart deal had allowed Disney to run a de facto independent country since 1967; the 25,600-acre Reedy Creek Improvement District. When DeSantis signed a bill stripping Disney of this lucrative perk on Friday, Chapek had only himself to blame.
America Is a Consumer-Driven Economy
If Chapek had eyes wide open, he’d know the Florida bill was incited by a Twitter feed called Libs of TikTok; many video clips of school teachers admitting they push their personal sexual politics on young students. It took me 15 minutes to see the grass roots rebellion behind the bill: video proof of crossing the line, a million followers, and tens of millions of views. It has alarmed parents and THAT should scare Chapek.
Disney is now saddled with a distracting and divisive issue. Investors worry about time and treasure expended to placate partisan employees. Disney’s workforce is divided on the issue, with many on social media accusing Chapek of “cowering to a small political minority.” Chapek should, of course, protect LGBTQ+ Americans. He should also separate statutory fact from political fiction, allowing cooler heads to prevail.
I have read Florida’s Parental Rights in Education bill, which is primarily about WHEN public schools can teach students about sexuality and gender preferences. 4th grade sounds about right, because that’s when most kids become interested in human complexity (like gender as a preference), and good parents know the age of innocence cannot last for ever. Above all, most parents want to imprint their idea of normal on their offspring – and it’s absurd to ignore that fact.
Last November, Virginia Democrats learned the hard way parents don’t want woke adults re-directing kids away from their parents’ cultural and social values. Thus, if Disney thinks woke politics has no risk, they don’t know the most profitable dollar is the first to leave. Employees vs. shareholders. Disney vs. Florida. It’s not supposed to be this way.
