Disney to Launch Employee Stock Purchase Plan, Adjust Health Benefits

Disney will introduce an employee stock purchase plan in 2027 and overhaul its medical coverage for next year, the company told staff in a Wednesday memo.

Eric Chaisson, Disney's EVP of total rewards and employee services, said the stock purchase plan is pending approvals and that details such as eligibility and program design are still being finalized. The move comes after multiple rounds of layoffs this year, including a major cut in April and reductions at ESPN and Pixar in July.

Two software engineers previously told Business Insider that their long-term incentive awards–restricted stock units vesting every six months over three years–were cut from 35% of base salary to 25%. The new stock purchase program could help offset some of that loss, said Josh Bersin, who runs the HR consulting firm The Josh Bersin Company.

Stock purchase plans let employees buy shares at a discount, typically about 15% below the market rate, Bersin said. That contrasts with stock-based compensation, which gives shares at no charge but requires employees to stay for a vesting period. When a stock is not rising much, as with Disney, unvested shares may not deter departures, he said. Letting employees buy at a discount "can be a better way of managing benefits when the stock is not going up a lot," Bersin said. "They end up with employees who are more committed and feel like owners."

Bill Castellano, a professor of human resource management at Rutgers University, said the stock purchase plan is "much broader based" than restricted stock units, which are usually reserved for managers or high-ranking staffers. The program could serve as an olive branch after the cuts to stock-based compensation, which "can send a pretty negative signal," Castellano said.

One Disney software engineer said they were "totally stoked" to join the program. Another was less enthused, saying their interest would depend on the terms. Shares acquired through the program would be taxed at the ordinary income rate unless held for more than a year. "The tax complexity is such that it would be beneficial to someone who holds and feels the company is a long-term prospect for growth," the second engineer said. "It doesn't seem like an easy win."

Disney is also changing "most medical plans" next year, Chaisson said, which will affect employee contributions. The company is not switching health insurers, a person familiar with the updates said. Unlike past years, coverage will not roll over automatically. Employees will need to actively choose plans and re-enroll dependents for 2027. Chaisson encouraged everyone to "take a fresh look at their options."

A Disney spokesperson said the company is "making measured adjustments to our employee benefits in response to rising healthcare costs nationwide." Employers' healthcare expenses are expected to rise 9.5% next year, insurance brokerage Aon said on Thursday.

Chaisson added that Disney is "evolving" well-being programs, consolidating some, and doubling the number of counseling sessions in its Employee Assistance Program.

Disney's stock has been under pressure. Shares are up more than 15% from their late-July low but down 8% over the past year and 38% over the last five years.