Warner Bros. Discovery (WBD) faced a challenging 2024, reporting a staggering $11.5 billion net loss. This loss was largely attributed to a $9.1 billion goodwill impairment charge, reflecting the decreased valuation of their linear TV networks. Revenue also saw a decline of 4.8%, settling at $39.3 billion. Furthermore, WBD's stock price dipped by approximately 7% throughout the year.
Despite these financial setbacks, Warner Bros. Discovery's CEO, David Zaslav, received a 4.4% increase in his total compensation, reaching $51.9 million for the year. This included a cash bonus of $23.9 million and $23.1 million in performance-based restricted stock grants. WBD stated that Zaslav qualified for 108.6% of his 2024 cash bonus target and an impressive 200% of his stock grant target.
Shareholders Reject Executive Pay Packages
This substantial compensation package has drawn criticism, with Warner Bros. Discovery shareholders voting against the executive pay packages, including Zaslav's. Almost 60% of the votes cast were against the 2024 executive payouts at the company's annual meeting. Although the vote is non-binding, it sends a clear message about shareholder sentiment.
The board acknowledged the concerns, stating, "The Warner Bros. Discovery Board of Directors appreciates the views of all its shareholders and takes the results of the annual advisory vote on executive compensation seriously. The Compensation Committee of the Board looks forward to continuing its regular practice of engaging in constructive dialogue with our shareholders."
Comparison to Competitors
The debate surrounding Zaslav’s compensation is further fueled by the performance of WBD's competitors. While WBD's stock declined, Netflix (NFLX) saw its stock soar by over 80% in 2024, and Disney's stock (DIS) rose by 24%. Netflix's co-CEOs, Ted Sarandos and Greg Peters, earned $61.9 million and $60.3 million respectively, while Disney's Bob Iger received $41.1 million.
The S&P 500, as a broader benchmark, gained over 23% last year, further highlighting the contrasting performance of Warner Bros. Discovery.
The controversy raises questions about executive compensation in the face of company losses and shareholder disapproval, suggesting a need for greater alignment between performance and pay.