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A majority of Warner Bros Discovery shareholders voted against the 2024 pay package for chief executive David Zaslav, whose remuneration has been a sore spot for investors amid steep declines in the media group’s share price.
A regulatory filing published on Tuesday showed that a majority of shareholders rejected Zaslav’s $52mn package in a 1,063,214,128 to 724,453,004 vote. The move is largely symbolic because it is nonbinding.
The Warner Bros Discovery board said in a statement that it “takes the results of the annual advisory vote on executive compensation seriously”.
Zaslav received higher pay than his counterparts at larger entertainment groups last year, including Disney chief executive Bob Iger, who was paid $41mn, and Comcast chief executive Brian Roberts, who received $34mn.
Zaslav’s pay has attracted criticism since 2021, when he was awarded a stock options-heavy package worth $247mn. Some investors also criticised the board’s decision in 2023 to align his pay plan with achieving cash flow goals instead of stock price targets.
Warner Bros Discovery’s shares are down nearly 60 per cent since the company was formed in a 2022 merger, as its cable television businesses have faced sharp declines. Zaslav and chief financial officer Gunnar Wiedenfels have focused on cutting its debt load, which stood at $55bn when the deal closed and stood at $38bn in May.
Yet S&P Global lowered its credit rating on Warner Bros Discover last month to BB-plus, citing revenue and cash flow declines at its TV business.
In a note to investors this week, Bank of America analyst Jessica Reif Ehrlich said a potential spin-off of the company’s studio and streaming businesses could “unlock the significant unrecognised value” of its content business, which includes the Warner Bros Studios, HBO, DC and the HBO streaming service.
In December Warner Bros Discovery restructured into two divisions — one holding its traditional TV business and another with the streaming and studio business. “We believe the market value for Warner Bros Discovery’s studio and streaming assets could far exceed the market capitalisation of the company today,” Ehrlich wrote.
The company holding the cable assets, which include CNN and Cartoon Network, would focus on cutting debt and generating cash.
Rival NBCUniversal plans to spin off its cable channels, which include CNBC, into a new listed group called Versant later this year.
Warner Bros Discovery’s studio and streaming businesses have been performing well recently, with box office hits such as The Minecraft Movie and Sinners and streaming shows including White Lotus and Hacks. Its cable channels, however, continue to lose ground. Warner Bros Discovery last month missed Wall Street estimates and reported a larger-than-expected loss.
In a call with investors last month, Zaslav declined to comment when asked if the company could follow NBCUniversal’s lead in spinning off its cable unit. “We can move quickly if we decide to change,” he said.
