Shareholders at Warner Bros. Discovery gave a thumbs down to the company’s executive compensation for 2024 — multi-million dollar paydays led by CEO David Zaslav’s $51.9 million package.
The vote, informally called say-on-pay, is required at publicly traded companies but nonetheless non-binding. Boards of directors insist that they take the votes to heart and if there’s dissent engage seriously with their biggest shareholders, and that is sometimes the case. At Warner Bros. Discovery, however, Zaslav’s pay has been in the spotlight for years, including on the picket lines during the recent Hollywood strikes.
Stockholders at the company’s annual meeting declined to approve, “on a non-binding, advisory basis, the 2024 compensation of the Company’s named executive officers,” WBD noted in an SEC filing with the result of votes cast showing that 59% of shareholders who cast ballots voted against WBD’s pay plans. The general rule of thumb is that support less than 70% is notable.
Waner Bros. Discovery stock has floundered since the merger three years ago, which burdened the company with debt. Credit ratings agency S&P last month downgraded it to junk status citing “weak credit metrics.” It’s not just that. Pay experts noted that members of the board’s compensation committee decided to adjust the metrics they themselves set in order to pay the chief executive more.
Public companies report the pay of their top five highest paid executive officers in annual proxy statements filed with the SEC each spring for the previous year (if they operate on a calendar year). Pay is one of a handful of items along with the election of directors and shareholder resolutions that stockholders vote on at annual meetings. Leading proxy advisory firm Institutional Shareholder Services, which puts out highly reseached reports each year ahead of annual meetings to guide shareholders, recommended voting against WBD’s executive pay and said the “compensation committee demonstrated only limited responsiveness to shareholder concerns following consecutive years of low say-on-pay support.”
In a statement today, Warner Bros. Discovery’s Board of Directors said it “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.”
