A majority of shareholders rejected Zaslav’s pay package in an advisory vote at the company’s annual meeting in June. “It’s a shockingly high salary for what cannot be viewed as a successful performance to date,” former ESPN President John Skipper said in reference to the vote on an episode of the podcast Pablo Torre Finds Out.
In a statement at the time, Warner Bros.’ board said it “appreciates the views of all its shareholders and takes the results of the annual advisory vote on executive compensation seriously.”
Zaslav’s outsize compensation became a target for shareholders earlier this year.Credit: Bloomberg
Just a week later, Zaslav signed a new contract that extended his employment through 2030 and granted him roughly 23 million stock options.
Zaslav’s existing package of options awarded years earlier had an exercise price of at least $US35 a share, meaning they were worthless unless he was able to more than triple the company’s share price.
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The new batch of options came with a more attainable hurdle of just over $US10, meaning they could be valuable with only a modest uptick in the stock price. But there was a catch: The majority would only be redeemable if Zaslav was able to guide Warner Bros. through a planned spinoff of its cable networks before the end of 2026.
In early November, the company amended the agreement to broaden that definition. It clarified that Zaslav’s options would remain eligible to vest if the studio entered any change-in-control transaction.
That tweak meant the options would vest regardless of how an eventual deal was structured and whether Paramount Skydance, Netflix or another suitor won the bidding war.
Netflix deal
After Warner Bros. fielded multiple sweetened bids this week, Netflix announced on Friday it had acquired the company’s streaming studio assets. Once the deal closes, Zaslav’s options tied to his 2025 employment agreement will be worth about $US420 million based on Netflix’s $US27.75 per share cash-and-stock offer price. Besides his equity awards, salary and cash bonuses, Zaslav currently owns Warner Bros. stock worth about $US186 million at the offering price.
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The acquisition is also expected to trigger change-in-control terms that will accelerate the vesting of nearly 6.3 million performance restricted stock units awarded to Zaslav, worth more than $US170 million at the acquisition price.
Netflix’s acquisition of its streaming arm is expected to close in 12 to 18 months, with an antitrust review expected to attract intense scrutiny.
Bloomberg
