David Zaslav’s golden parachute reaches new heights

by

Even when considering the generous exit packages often given to executives, the potential payment for Warner Bros. Discovery CEO David Zaslav is remarkably high.

According to a recent company filing, Warner Bros. Discovery CEO David Zaslav, one of the highest-paid executives in the U.S., could receive up to $887 million if he leaves the company after its merger with David Ellison’s Paramount Skydance.

A report from Institutional Shareholder Services, an investor advisory firm, stated that the potential severance package is one of the largest they’ve ever seen and recommended against approving it.

On April 23rd, Warner shareholders will vote on the proposed $111 billion sale to Paramount, led by Ellison. This is a key step, as Ellison and his team work quickly to get all necessary approvals for the deal, which they aim to complete by summer. The shareholder vote is legally binding.

The purchase is likely to result in significant job losses and spending reductions. The new owners plan to combine the two well-known film and television studios and streamline their many cable channels.

Shareholders will also have a chance to voice their opinion on Mr. Zaslav’s pay, though their vote won’t be legally required to change anything.

Hollywood Inc.

For Subscribers

Hollywood is in bad shape. You wouldn’t know it from CEO pay

Despite a difficult year for Hollywood in 2024, executives in media and entertainment actually saw their pay increase by 7% compared to the year before. This means they earned twice as much as the median CEO of a large company listed on the S&P 500.

Zaslav has received significant compensation after four years of leading the company, which has a considerable amount of debt. Several things have played a role in this.

Last month, Warner Bros. Discovery’s board agreed to cover the taxes David Zaslav will owe after the company’s deal with Paramount is finalized. They’ve authorized payments of up to $335 million to reimburse him for these excise taxes when he receives the funds.

Warner explained in official documents that his original plan to sell the company to Netflix – the option Zaslav preferred – would have meant lower taxes. However, Netflix backed out of the deal, ultimately allowing Paramount to acquire the company.

I was reading Warner’s filings and learned that their tax advisors believed David Zaslav would have faced a significantly higher tax bill with the PSKY deal. Apparently, the agreement with Netflix was much better for him financially, mostly because of when it was expected to close and a few other details the company didn’t specify. It sounds like the timing really made a difference for him!

ISS, in its report, highlighted a major concern: the CEO is set to receive an estimated $335 million tax payment increase, while no other Warner executives have similar arrangements for tax reimbursement.

Hollywood Inc.

If regulators allow it, the Ellison family would own both CNN and CBS News after the merger.

ISS also pointed out that over 94% of Zaslav’s pay came from automatically receiving stock faster than scheduled and a payment to cover his excise taxes. This raised concerns about how his compensation was structured.

Ellison is pushing to finalize the deal by this fall. However, if the sale extends into next year, Zaslav’s tax situation would become more favorable, and the $335 million currently reserved for taxes wouldn’t be necessary, according to internal documents.

Warner Bros. Discovery said the estimated tax refund for David Zaslav, a New York resident, was figured using a 20% excise tax and an overall effective tax rate of 54.126%.

In addition, Zaslav is expected to receive $34.2 million in cash. His stock is worth $517 million.

Hollywood Inc.

For Subscribers

Hollywood writers say the bosses make too much. This is what our analysis found

A recent New York Times report details the compensation of executives at companies like Warner Bros. Discovery and Netflix. This information has become a key point of discussion for striking writers.

A Warner spokesperson declined to comment.

In September, Warner Bros. Discovery stock was trading at about $12.50 per share before Larry Ellison publicly expressed his interest in the company.

Paramount has reached an agreement to buy Warner Bros. Discovery for $31 per share. This includes popular networks like CNN, HBO, and HGTV, along with the Cartoon Network, Warner Bros. film and TV studios, and their famous Burbank studio lot. Warner shares closed at $27.53 on Thursday, remaining relatively stable.

If the deal doesn’t close by September, Paramount will pay Warner investors an additional 25 cents per share for each three-month period until the acquisition is finalized.

Hollywood Inc.

California Attorney General Rob Bonta criticized the federal government for stepping back from its responsibility to enforce antitrust laws.

Following its acquisition of Warner Bros., Paramount is facing roughly $79 billion in debt. This has raised concerns about potential further job cuts in the entertainment industry, which has already seen significant layoffs in recent years. The credit rating agency Fitch Ratings has lowered Paramount’s credit rating due to these debt concerns.

As a film and TV fan who also keeps an eye on the business side of things, I think shareholders should approve this deal, according to ISS. They pointed out that Netflix and Paramount actually battled it out in a pretty competitive bidding war, which means shareholders can be confident they’re getting the best possible outcome with this agreement.

Hollywood Inc.

After Netflix finalized its purchase of Warner Bros., the Ellisons and their colleagues immediately started planning how to regain their position.

Read More

2026-04-12 21:21