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Warner Bros. Discovery has been in cost-cutting mode — except when it comes to paying top execs.

David Zaslav, president and CEO of Warner Bros. Discovery, had a 2023 pay package worth $49.7 million, up 26.5% from the year prior, according to the company’s 2024 proxy statement filed Friday. Zaslav’s compensation totaled $39.3 million in 2022, after he received an astonishing $246.6 million (which included $203 million in stock-option grants) in 2021.

For 2023, Zaslav had a base salary of $3 million, stock awards valued at $23.1 million, a cash bonus of $22 million and $1.6 million in other compensation (including $705,182 for personal security services and $767,908 for his personal use of the company’s private jet).

Other WBD senior execs also saw double-digit pay hikes in 2023. CFO Gunnar Wiedenfels earned $17.1 million (up 26%); chief revenue and strategy officer Bruce Campbell, $18.3 million (up 33%); JB Perrette, president/CEO of global streaming and games, $20.1 million (up 43%); and president of international Gerhard Zeiler, $13.3 million (up 30%).

Cash bonuses and stock awards for Zaslav and WBD’s other named executive officers are tied to free cash flow targets. The company made notable headway here: Its reported free cash flow for 2023 was $6.16 billion, up 86% year over year. That helped the company pay down some of its massive debt load; WBD ended 2023 with $41.9 billion in long-term debt, an improvement from $48.6 billion the year prior. In addition, Zaslav’s cash bonus was awarded under his May 2021 employment agreement pursuant to the proposed AT&T deal for Discovery to buy WarnerMedia (which closed in April 2022) under which he agreed to remain CEO of the combined company.

That said, in 2023 Warner Bros. Discovery’s linear TV and advertising businesses shrank and its studio revenue dropped 12%, while its direct-to-consumer streaming division eked out a nominal profit for 2023. The company reported full-year 2023 revenue of $41.3 billion, down 4% on a pro-forma basis, and a net loss of $3.13 billion (versus $5.36 billion on a pro-forma basis in 2022).

Warner Bros. Discovery’s stock has languished since the April 2022 merger, and is down 29% year to date in 2024. The company is scheduled to report first-quarter 2024 results on May 9 before the market opens. WBD’s 2024 annual meeting of shareholders, which will take place virtually, is set for June 3 starting at 10 a.m. ET.

“2023 was a challenging year for WBD and for the media and entertainments industries as a whole,” the company said in its proxy filing. “We were impacted by the changing landscape of advertising spending and continued weakness in the advertising market overall, declines in linear television viewing, increased competition from other traditional media companies and the enhanced presence of large technology companies in the media space, lingering effects of the COVID-19 pandemic on movie-theater attendance, and other general macroeconomic conditions.” It also cited the “once-in-a-generation work stoppage” last year by the WGA and SAG-AFTRA.

“Despite these challenges, the [board’s compensation committee] believes our CEO and other [named executive officers] provided exceptional leadership and delivered on several financial, operational and strategic priorities,” Warner Bros. Discovery said in the proxy statement.

The company said the board’s compensation committee “determined it was appropriate to take an adjustment to performance for the impact of the 2023 WGA and SAG-AFTRA strikes,” calculating revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) that was higher than reported — which ultimately increased the payout amount for 2023 cash bonus awards made to top execs. The adjustments had no impact on year-end paid streaming subscriber performance.

WBD comprises the Warner Bros. film and TV studios; cable networks including HBO, CNN, Discovery Channel, HGTV, Food Network and TBS; Warner Bros. Games; and streaming services, led by the flagship Max (formerly HBO Max). Prior to the closing of the deal forming Warner Bros. Discovery, Zaslav had been Discovery’s president and CEO since January 2007.

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