Disney Plans $60 Million Annual Compensation for 66 Character.AI Employees
A Chapter 11 filing says Disney plans to spend $180 million on compensation and retention over three years and has agreed to pay $20 million for key Character.AI assets. Disney is the stalking-horse bidder; competing bids are due Nov. 20, and the sale is subject to court approval.
Walt Disney Co. (NYSE: DIS) plans annual compensation of $60 million for 66 Character.AI employees, following a reduction in its own workforce. The compensation plan is disclosed in a Chapter 11 filing by Character.AI’s parent company. The disclosure comes after Disney hired Character.AI CEO Karandeep Anand in mid-September as its first company-wide technology chief.
Disney has not disclosed Anand’s pay. The hires form part of CEO Josh D’Amaro’s AI strategy. Disney’s move came two weeks after it laid off several hundred employees, including technology staff. It was the third major round of layoffs since D’Amaro took over in mid-March.
Disney is also reserving $30 million for an “aggregate retention pool.” The filing projects $180 million in compensation and retention spending over three years. Of the 66 employees offered jobs, 56 have resigned from Character.AI, while the other 10 are awaiting updates on U.S. work visas, Business Insider reported. Disney also agreed to pay $20 million for key assets, including some intellectual property and technology.
Disney is the stalking-horse bidder, setting a minimum price while competing bidders may Higher bids are due Nov. 20. The sale may close in late November or early December, pending court approval. Disney shares ended Friday down 0.08% at $110.59.
They are down 2.80% year to date. Character.AI has faced lawsuits from families alleging that their teenagers harmed themselves or died by suicide after using its chatbots, the report said. The startup and its backer, Google, part of Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL), settled several child-safety cases earlier this year.
In October 2024, Google agreed to a $2.7 billion deal that brought Character.AI’s founders, some staff and a license to the startup’s models to the tech giant. Disney sent Character.AI a cease-and-desist letter last fall over the unauthorized use of its copyrighted characters. Character.AI complied by removing chatbots featuring Disney franchises, including Star Wars and Marvel.