Potential Payout for Warner Bros. Discovery Chief
David Zaslav, the head of Warner Bros. Discovery, might be looking at a staggering payout of up to $800 million if Paramount Skydance successfully acquires the media company, as indicated in a recent securities filing.
The filing revealed late on Monday that this hefty figure encompasses severance payments and a considerable $335 million reimbursement should Zaslav’s full amount be taxed.
Interestingly, the documents also noted that Zaslav received an offer of “hundreds of millions of dollars” from Paramount’s CEO David Ellison and his father, billionaire Larry Ellison, back in September during a series of unsolicited bids for WBD that pitted them against Netflix.
Zaslav reportedly communicated to Warner’s board that he considered it inappropriate to discuss such proposals at that time, as claimed in the filing.
The remarkable dividend mentioned does not account for over $20 million that Zaslav could potentially gain from his fully-owned shares, according to information from the Wall Street Journal.
Paramount, under David Ellison’s leadership, anticipates closing the deal this fall, after which Zaslav is projected to earn around $504 million right away.
Additional components of his pay package are contingent upon specific situations, including approximately $47 million that Zaslav would receive if he is either terminated or resigns under certain conditions within a year of the agreement’s signing.
The $335 million payout would only take effect if Zaslav faces a 20% federal tax on his retirement benefits. If that’s the case, the additional sum is intended to cover that tax burden.
Warner Bros. underscored in its filing that the overall payment structure includes tax provisions “expected to materially reduce over time,” noting that Paramount would handle the costs related to any tax refunds following the transaction’s completion.
It’s stated that without these provisions, Zaslav might find himself at a significant tax disadvantage compared to a prior offer from Netflix that would have protected him from the same tax scenario.
This aspect could spark some controversy, as investors often resist companies allocating tax refunds to executives.
However, if the deal finalizes in 2027, it would allow Zaslav’s payments to escape federal taxation, potentially saving Paramount millions. Under this scenario, Zaslav’s total earnings would hover around $667 million, as reported.
Approximately $116 million in stock has already vested, according to the company’s filing.
In February, Paramount Skydance secured a $111 billion bid for Warner Bros. and its associated assets after a prolonged bidding war with Netflix.
This partnership still requires regulatory endorsement, but it promises to form a substantial media empire for the Ellison family that encompasses Paramount, CBS, CNN, HBO, and an extensive collection of movie titles.
Zaslav’s anticipated compensation relies on several assumptions, including his potential exit this month and remains subject to adjustments, according to Warner Bros. in its filing.
Earlier this month, the media company’s CEO sold off over a third of his stake for $113.2 million, retaining roughly 7.2 million shares, based on data from Verity Platform.
