David Zaslav, the chief executive of Warner Bros. Discovery, received $49.7 million in compensation last year, a 26 percent increase from the previous year. This increase in compensation is notable as Warner Bros. Discovery is facing financial challenges, with losses totaling $3 billion in 2023, although this was an improvement from the $7 billion in losses the previous year. Shareholders have expressed concern over the high pay, with only 50.8 percent approving of the $39.3 million he was paid in 2022.
In response to shareholder feedback, the Warner Bros. Discovery board adjusted compensation formulas for its top executives in 2023. Certain bonuses were tied more to the generation of free cash flow, which increased by 86 percent to $6.2 billion, greatly surpassing Wall Street expectations. This improved financials were partly due to the profitability of the streaming division and savings from the union strikes that affected Hollywood for six months, reducing production costs.
The increased free cash flow allowed Warner Bros. Discovery to reduce its total debt by 11 percent to $44.2 billion in 2023. David Zaslav’s compensation for 2023 included a $3 million base salary, long-term stock awards of $23 million, $22 million in cash payment guaranteed under his 2021 employment contract, and an additional $1.6 million related to security and personal use of the corporate jet. Despite challenges, the company stated that Mr. Zaslav provided exceptional leadership and achieved financial, operational, and strategic priorities.
In comparison, other media chief executives received varying pay packages in 2023. Robert A. Iger of Disney received $31.6 million, a 31 percent decline from 2021, and Ted Sarandos of Netflix received $49.8 million, on par with the previous year. Bob Bakish of Paramount Global received $31.3 million, a 2 percent decrease. The disparity in pay packages in the entertainment industry has been a point of contention, particularly as companies struggle due to the shift to streaming from traditional television.
The high pay packages have been a significant factor in the labor strikes that have affected the entertainment industry. Many big media companies, including Warner Bros. Discovery, have cut costs by laying off employees and reducing content production. However, Mr. Zaslav and his team at Warner Bros. Discovery have taken more aggressive measures, even halting the production of projects like “Batgirl” and “Coyote vs. Acme.” Despite the challenges faced by the industry, Mr. Zaslav has emphasized the need to make difficult decisions to adapt to the changing landscape of the media industry.
Overall, the debate over executive compensation in the entertainment industry continues as companies navigate the transition to streaming and address financial challenges. Warner Bros. Discovery’s adjustments to executive compensation formulas and focus on generating free cash flow signal a shift towards financial stability amid changing market conditions. The impact of high salaries on labor relations and production decisions remains a contentious issue in the industry.
