Institutional Shareholder Services Inc. has advised against approval of Warner Bros. Discovery Inc.'s executive compensation arrangements and recommended that investors withhold support from five board nominees who served on the company's compensation committee, the proxy adviser said in a report distributed to clients on May 22.
ISS judged the compensation committee to have been insufficiently responsive to investor concerns following a nonbinding vote last year in which a majority of shareholders opposed the 2024 pay package awarded to Chief Executive Officer David Zaslav. The adviser also highlighted that target pay opportunities for Zaslav remain large by the committee's measures, noting that Zaslav earned $165 million last year, a sum the report said is more than triple the $51.9 million he received in 2024.
The company's shareholders are scheduled to convene a virtual annual meeting at 10 a.m. New York time on Tuesday, June 9, where the compensation package and director elections will be on the agenda.
ISS had earlier urged shareholders to reject a golden parachute arrangement that would have accelerated equity awards valued at more than $500 million for Zaslav. At a special meeting in April, shareholders approved Warner Bros. Discovery's pending $110 billion merger with Paramount Skydance Corp., while in a separate nonbinding vote they rejected the CEO package that had been proposed.
At last year’s annual meeting, a nonbinding vote recorded that a majority of shareholders opposed the 2024 compensation package for Zaslav. In the May 22 note to clients, ISS recommended that shareholders not support five of the 13 nominees to the board at the current meeting, identifying those five as having served on the compensation committee and citing their failure to adequately address shareholders after the previous say-on-pay vote.
Despite its recommendations against the compensation package and certain directors, ISS recommended that shareholders vote in favor of Zaslav’s reelection to the board.
The company’s merger partner, Paramount, said it expects the merger to close by the third quarter of this year, a timeline reiterated in communications around the earlier special meeting.
Context and implications
The ISS guidance highlights continuing shareholder scrutiny over executive pay at Warner Bros. Discovery following successive nonbinding votes. Investors attending the upcoming virtual meeting will be asked to weigh both director elections and approval of pay practices after a series of advisory votes and a contested golden parachute proposal earlier this year.