David Zaslav’s lucrative compensation package is set for a revision, driven in part by shareholder sentiment. As Warner Bros. Discovery prepares to spin off its television networks and the Discovery+ streaming service into a distinct entity, the company’s compensation committee is altering the structure of Zaslav’s remuneration.
Zaslav, who serves as president and CEO of Warner Bros. Discovery, will remain with the studio operations, including HBO and Max, while his long-serving chief financial officer, Gunnar Wiedenfels, takes the helm at the new spinoff.
The compensation committee has stated that Zaslav’s package is being redesigned to more effectively reward his essential contributions. Going forward, his compensation will be more closely aligned with the company’s overall stock performance, moving away from previous measures such as debt reduction and cash flow.
According to a source familiar with the updated agreement, Zaslav is set to receive a compensation model that features lower cash payments and a greater emphasis on stock options. The transition began last week with the issuance of approximately 21 million stock options, comprising 60 percent performance-based and 40 percent time-based.
This decision, made by the Warner Bros. Discovery board and its compensation committee, reflects recent shareholder feedback, as investors overwhelmingly opposed Zaslav’s previous compensation package in a non-binding vote earlier this month. While the board was required to take the vote into account, it undoubtedly influenced the changes.
In a filing made on Monday, WBD noted that the adjustments to Zaslav’s compensation structure aim to address stockholder feedback and preferences regarding CEO pay.
Zaslav has historically ranked among the highest-paid executives in the media industry. However, discontent has grown among shareholders who witnessed a decline in their investments during a period when Zaslav’s earnings soared.
Under the revised plan, Zaslav’s target annual cash bonus will be reduced from $24 million for 2024 to $6 million, while his base salary will remain at $3 million. He will still have the potential to earn up to 200 percent of his target bonus. Additionally, the target value of his equity awards will be set at $15.5 million in the first year and reduced to $7.5 million for subsequent years.
Details about other elements of the package and many of the target metrics are still being finalized, but it is clear Zaslav will continue to be well-compensated. His golden parachute remains largely unchanged, with Wiedenfels’ compensation also seeing minor adjustments.