CEOs panic after Florida moves to end Disney’s special privileges

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Florida Governor Ron DeSantis’ move to end Disney’s special privileges, which provided the entertainment giant with numerous tax breaks and the ability to self-govern, has other corporations in a panic.

According to a report by the Wall Street Journal over the weekend, CEOs are asking their firms how to steer clear of the same outcome that Disney faced.

Florida’s decision to end Disney’s special privileges came after corporate executives at Disney mounted a campaign against parental rights legislation in the state. Gov. DeSantis declared that “Disney is a guest in Florida,” and signed legislation to end the Reedy Creek Improvement District, a 39 square mile special tax district that hosted Disney World, while allowing the company to avoid certain state taxes and regulations.

“The No. 1 concern CEOs have is, ‘When should I speak out on public issues?’” former Medtronic CEO and current Harvard Business School senior fellow Bill George told the Wall Street Journal. “As one CEO said to me, ‘I want to speak out on social issues, but I don’t want to get involved in politics.’ Which I said under my breath, ‘That’s not possible.’”

The publication reports that some executives may be relieved to be able to focus on maximizing shareholder returns instead of engaging in politics. Corporate governance lawyer David Berger said that lawmakers are now emboldened to take businesses on when it works to their advantage.

The recent move by Republican lawmakers to take corporations to task comes amid the rise in populism across the United States.

“It used to be that Republicans especially — but both parties — liked big business,” he explained. “And now what you’re seeing is both parties like to use big business as political footballs one way or the other.”

Julie Schertell, the CEO of Neenah, said that corporate executives have been following the Disney development “to some degree,” suggesting that company directors have to manage a careful balancing act between placating employee concerns over political issues and making sure not to rile up politicians.

“Because I want folks to assume positive intent, like ‘Here’s what we’re trying to do, and if it feels like a misstep, let’s talk about that. And of course, correct on it,’” she said.

Her remarks were echoed by Ron Williams, Aetna’s former chairman who now sits on the boards of Boeing, Johnson & Johnson and American Express, who said that navigating politics is now a challenge for executives.

“Companies often deal in substance, and politicians often deal with foils,” he said. “And so, you know, companies can inadvertently become a foil for different political issues. It’s not enough to know what you want to do. You have to be artful in how you do it.”