Warner Bros Discovery faces shareholder revolt over exec pay

Warner Bros Discovery shareholders have rejected the multimillion-dollar pay packages of chief executive David Zaslav and his leadership team.

David Zaslav, chief executive of Warner Bros Discovery, in Idaho. Picture: Bloomberg

Warner Bros Discovery shareholders have rejected the multimillion-dollar pay packages of chief executive David Zaslav and his leadership team.

More than 59 per cent of Warner shareholders who cast ballots voted against the compensation Mr Zaslav and his team received for 2024, the company said in a securities filing. More than 80 per cent of Warner shareholders voted on the executive compensation, including Mr Zaslav’s $US51.9m ($80.3m) package.

The rejection is a symbolic rebuke of the Warner leadership’s pay packages, since the shareholders’ so-called “say on pay” vote is non-binding. The stock has fallen by about 59 per cent since the company was created from the merger of AT&T’s Warner Media and Discovery Communications in April 2022.

The company said it “takes the results of the annual advisory vote on executive compensation seriously” and that the board’s compensation committee “looks forward to continuing its regular practice of engaging in constructive dialogue with our shareholders”. Shareholder concern about executive compensation at Warner Discovery has been growing. Last year, 50.8 per cent of shareholders approved of the executive compensation. Anything less than 70 per cent is seen as “low support” by ISS, a corporate governance firm.

Like many media companies, Warner has struggled in recent years amid the growth of streaming. Consumers have been moving away from traditional cable and satellite television. Warner cable networks, including the Food Network, Discovery and CNN, are enduring rating and revenue declines.

Earlier this month, S&P Global Ratings downgraded Warner debt to junk status primarily due to the challenges facing its cable-network business. Warner’s streaming service HBO Max is profitable and is adding subscribers, but its subscriber count isn’t close to the reach of Netflix and Disney+.

Last December the company said it was restructuring into two divisions – one focused on streaming and movie and television production studios and the other on its cable networks.