Bigger cost cuts could mean bigger stock awards for Warner Bros. Discovery CEO David Zaslav and other executives at the company.
The company’s board is prioritizing reducing debt and increasing cash flow, and to incentivize Zaslav, already one of the highest-paid executives in America, his employment contract is being tweaked to create the possibility of larger stock awards.
The board has also granted $11.75 million of one-time performance-based restricted stock units to some of the company’s officers, as well as to other executives responsible for cash-flow management, debt reduction and synergy achievement, according to a filing with the Securities and Exchange Commission.
Bruce Campbell, chief revenue and strategy officer; Gunnar Wiedenfels, CFO; JB Perette, CEO and president, global streaming and games; Gerhard Zeiler, president international; Adria Alpert Romm, chief people and culture offer, and Savalle Sims, executive VP and general counsel, each get performance-based stock units initially worth between $1 million and $2 million.
A separate pool of restricted stock units was also established to recognize other employees throughout the organization.
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Under his original employment agreement Zaslav was supposed to get performance-based restricted stock worth $12 million.
With the new incentives the awards are multiplied and Zaslav could receive twice the number of shares.
Under the amended employment agreement, Zaslav will also receive an additional award of performance-based restricted stock units in each of 2023, 2024 and 2025 with an initial value of $11,500,000
Zaslav’s bonus, should he earn one, could reach 125% of the previously targeted level based on achieving certain quantitative and qualitative goals established by the board.
"The changes to the Warner Bros. Discovery executive compensation program are designed to further incentivize Company employees, including members of its leadership team and others whose efforts are critical to achieving the key near-term financial objectives of increased free cash flow and reduced leverage,” WBD board chair Samuel Di Piazza said in a statement. “The WBD Board is confident that these additional incentives offer a more competitive package against the backdrop of ongoing industry-wide transformation and economic headwinds, and better position the company to advance core drivers of shareholder value."
In 2021, Zaslav’s total compensation was $246.6 million. The biggest part of Zaslav’s compensation came from $202.9 million in option awards. Zaslav signed an employment contract in 2021 that included options worth $190 million. ■
