David Zaslav set to become a billionaire
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 a salary that to this day would not be considered a successful performance,” former ESPN President John Skipper said in an episode of the podcast, referring to the vote. Pablo Torre Learns.
In a statement made at the time, Warner Bros. The board said it “appreciates the views of all its shareholders and takes seriously the results of its annual advisory vote on executive compensation.”
Zaslav’s hefty compensation became a target for shareholders earlier this year.Credit: Bloomberg
Just a week later, Zaslav signed a new contract extending his employment until 2030 and granting him approximately 23 million stock options.
The strike price of Zaslav’s existing option package, granted years ago, was at least $35 per share, meaning they were worthless unless he more than tripled the company’s share price.
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The new group of options came with a more attainable hurdle of just over $10; This means they may be valuable with only a modest increase in stock price. But there was a catch: The majority could only be reclaimed if Zaslav could steer Warner Bros. to a planned extension of its cable networks before the end of 2026.
In early November, the company amended the agreement to expand that definition. He explained that Zaslav’s options would continue to vest should the studio enter into any change of control transaction.
This tweak meant the options would be valid regardless of how the final deal was structured and whether Paramount Skydance, Netflix or another suitor won the bidding war.
Netflix deal
After Warner Bros. fielded a number of attractive offers this week, Netflix announced Friday that it has acquired the company’s streaming studio assets. Once the deal closes, Zaslav’s 2025 contractual options will be worth approximately $420 million, based on Netflix’s cash and stock offer price of $27.75 per share. In addition to his equity awards, salary and cash bonuses, Zaslav is currently worth approximately US$186 million at the IPO price from Warner Bros. owns its shares.
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This acquisition is also expected to trigger change of control terms that will accelerate the vesting of approximately 6.3 million performance restricted stock units granted to Zaslav, valued at more than $170 million at the purchase price.
Its acquisition of Netflix’s streaming arm is expected to be completed within 12 to 18 months and is expected to face intense antitrust scrutiny.
Bloomberg
