Warner CEO Zaslav poised to become billionaire from Netflix deal

[NEW YORK] Netflix’s US$72 billion acquisition of Warner Bros Discovery is a coup for stockholders, whose shares are being bought for more than triple what they were worth as recently as April. 

Another big winner: chief executive officer David Zaslav, who is poised to become a billionaire if the deal closes. 

Long one of the highest-paid executives in media, Zaslav, 65, took home more than US$200 million in salary and cash bonuses over a nearly two-decade run leading the New York-based studio. That attracted criticism, as he’s collected huge pay packages even as the company laid off hundreds and endured a series of embarrassing strategy flip-flops.

A big part of Zaslav’s compensation hasn’t performed to expectations in recent years. Options awarded him around the time of the merger between Discovery and Warner Bros were valued at more than US$200 million in the firm’s 2021 proxy statement. Because of the entertainment company’s floundering share price, they remain out of the money today and will be worthless even with the latest deal. 

But a controversial contract renegotiation earlier this year offered the CEO a new opportunity to supercharge his wealth, awarding him new options worth more than US$400 million at Netflix’s acquisition price and positioning him to become one of the rare non-founder executives to reach US$1 billion in net worth.

A spokesperson for Warner Bros didn’t respond to a request for comment. 

New contract

Zaslav’s outsize compensation became a target for shareholders earlier this year. At about US$10 a share, Warner Bros’ stock was down more than 60 per cent from an April 2022 peak. Still, the studio disclosed in its proxy statement that it paid Zaslav almost US$52 million in compensation in 2024, including more than US$21 million in cash performance awards for the sixth year running.

A majority of shareholders rejected Zaslav’s pay package in an advisory vote at the company’s annual meeting in June. “It’s a shockingly high salary for what cannot be viewed as a successful performance to date,” former ESPN president John Skipper said in reference to the vote on an episode of the podcast Pablo Torre Finds Out.

In a statement at the time, Warner Bros’ board said it “appreciates the views of all its shareholders and takes the results of the annual advisory vote on executive compensation seriously”.  

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Just a week later, Zaslav signed a new contract that extended his employment through 2030 and granted him roughly 23 million stock options. 

Zaslav’s existing package of options awarded years earlier had an exercise price of at least US$35 a share, meaning they were worthless unless he was able to more than triple the company’s share price. 

The new batch of options came with a more attainable hurdle of just over US$10, meaning they could be valuable with only a modest uptick in the stock price. But there was a catch: The majority would only be redeemable if Zaslav was able to guide Warner Bros through a planned spinoff of its cable networks before the end of 2026.

In early November, the company amended the agreement to broaden that definition. It clarified that Zaslav’s options would remain eligible to vest if the studio entered any change-in-control transaction.

That tweak meant the options would vest regardless of how an eventual deal was structured and whether Paramount Skydance, Netflix or another suitor won the bidding war.

Netflix deal

After Warner Bros fielded multiple sweetened bids this week, Netflix announced on Friday (Dec 5) it had acquired the company’s streaming studio assets. Once the deal closes, Zaslav’s options tied to his 2025 employment agreement will be worth about US$420 million based on Netflix’s US$27.75 per share cash-and-stock offer price. Besides his equity awards, salary and cash bonuses, Zaslav currently owns Warner Bros stock worth about US$186 million at the offering price.

The acquisition is also expected to trigger change-in-control terms that will accelerate the vesting of nearly 6.3 million performance restricted stock units awarded to Zaslav, worth more than US$170 million at the acquisition price. BLOOMBERG