Disney’s $27 million retention deal pays its No. 2 a higher base salary than her boss

Disney’s post-succession strategy is not just about who won the CEO job. It is about converting a potential rival into a highly incentivized partner.

In most corporate succession battles, the runner-up leaves. At The Walt Disney Company, the opposite just happened, and it came with a carefully structured price tag.

After naming Josh D’Amaro its next CEO, Disney moved quickly to ensure that Dana Walden, the executive many believed could just as easily have won the job, did not become Hollywood’s most valuable free agent. The result is an aggressive “pay-to-stay” compensation package in which a subordinate’s base salary exceeds her boss’s, an unusual move in corporate America and a deliberate effort to bind Walden to D’Amaro’s success.

According to Disney’s February 2026 SEC filings, Walden received a one-time $5.26 million stock grant, likely designed to smooth the sting of being passed over. Her new base salary of $3.75 million is roughly 50% higher than D’Amaro’s starting base salary of $2.5 million and is weighted toward guaranteed cash. By contrast, D’Amaro’s compensation is more heavily tilted toward long-term, performance-based stock awards.

Excluding her one-time grant, Walden’s recurring annual target compensation—including a $7.5 million target bonus and $15.75 million in annual stock awards—totals about $27 million. That compares with roughly $35 million in D’Amaro’s annual target compensation, excluding his separate one-time $9.705 million equity award.

Why pay that much to someone who did not get the top job? Wall Street largely views it as risk management.

First, Disney has institutional memory. The company is still haunted by the 1994 departure of Jeffrey Katzenberg, who left after losing a succession fight and went on to co-found DreamWorks, taking talent and momentum with him. In an era when rivals like Netflix and Amazon are perpetually ready to outbid for proven hitmakers, Disney was not eager to repeat history.

Second, Walden’s remit now looks a lot like “CEO-light.” Her portfolio now formally includes film in addition to television and streaming. With a contract running through March 2030, she has both the authority and the runway to entrench herself as Disney’s central creative gatekeeper.

Finally, the package sends a signal to investors. Some were wary of a parks-and-experiences executive running a content-driven empire. Locking in Walden is Disney’s way of telling markets that while D’Amaro builds the future, the creative core remains firmly staffed.

Disney is not just paying for Walden’s output. It is paying for her loyalty and for the stability that comes from keeping a potential rival inside the castle rather than across the moat.

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Ruth Umoh
ruth.umoh@fortune.com

This story was originally featured on Fortune.com