By many measures, Warner Bros. Discovery had a bad 2024. Revenue dropped 4.8% to $39.3 billion. The company posted a staggering $11.5 billion net loss, largely because of a $9.1 billion goodwill impairment charge that reflected the lower valuation of its linear TV networks. WBD’s stock fell around 7% for the year.
But Warner Bros. Discovery rewarded president and CEO David Zaslav with a 4.4% pay bump, to total compensation of $51.9 million last year, including a cash bonus of $23.9 million and $23.1 million in performance-based restricted stock grants. According to WBD, Zaslav was deemed eligible for a 108.6% payout of his 2024 cash bonus target — and 200% of the target for his stock grants.
How exactly did Zaslav get a pay hike amid Warner Bros. Discovery’s financial decline?
Apparently, among those wondering about this were the company’s own investors: At the 2025 annual stockholders meeting, a majority of shares were cast against a non-binding advisory to approve the pay packages of Zaslav and other top brass. It was a symbolic gesture, as the resolution doesn’t have a direct effect on how WBD structures its compensation plans. (After the vote, the WBD board said in a statement that its compensation committee “looks forward to continuing its regular practice of engaging in constructive dialogue with our shareholders.”)
Like other public companies, Warner Bros. Discovery pays senior managers like Zaslav in a way that’s supposed to “align our executives’ interests with those of our stockholders,” as the company says in its latest proxy statement.
The fine print in WBD’s 2025 proxy statement spells out how the board decided Zaslav had earned his pay.
First is the cash bonus — which, fortunately for Zaslav, was not tied to the bottom line. According to Warner Bros. Discovery, Zaslav’s cash bonus was determined based on a weighted formula with 70% based on three financial metrics: revenue, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and year-end paid streaming subscribers. The remaining 30% was based on his performance against “strategic measures.”
As noted, WBD’s revenue declined in 2024 and came in below the “100% payout” threshold of $40.4 billion set by the compensation committee for Zaslav to be eligible for that portion of the cash bonus. But a larger component in calculating his bonus was adjusted EBITDA, which was $9.032 billion for 2024 — down 11% year over year, but still over the $9 billion threshold for 100% payout used in determining the CEO’s bonus. In addition, WBD ended the year with 116.9 million streaming subs, beating the 112.9 million target for a 125% bonus payout.
Meanwhile, the strategic goals that factored into Zaslav’s bonus were more qualitative. For example, one of those goals for Zaslav was to “Complete integration pipeline; Implement cost controls to adjust cost to serve in declining linear [TV] revenue environment.” On this front, Zaslav “Achieved incremental cost savings of $1.8B in 2024, significantly overdelivering against internal goal,” according to the WBD compensation committee. (Those savings were achieved in part through major layoffs.) The committee determined Zaslav had met the outlined strategic goals at 115% of his target.
Zaslav’s 2024 stock grants, valued at $23.1 million, were part of WBD’s long-term incentive compensation program. “We believe that delivering a substantial portion of an executive’s total direct compensation in equity awards helps to align our executives’ interests with those of our stockholders,” the board’s comp committee explained.
The stock grants Zaslav received last year were not based on total stockholder return (i.e., change in stock price over time). Instead, those were based based 75% on “individual strategic goals” similar to the ones used to calculate his cash bonus; one example there was that Zaslav “Led successful rebound of WBTV from strike, delivering increased episodes in 2024 (as compared to 2023).”
The remaining 25% of the stock-grants formula was based on how well Zaslav delivered on free cash flow, known as FCF. In 2024, Warner Bros. Discovery’s free cash flow declined 28%, to $4.4 billion. But that was still more than the “above target” threshold of $4.03 billion FCF in determining his long-term incentive compensation. And that triggered a clause in Zaslav’s employment agreement that caused the awards to vest at 200% of target. The committee noted that 70% of those were vested shares with the remaining 30% to be distributed in 2028, “subject to Mr. Zaslav’s continued employment and the other terms and conditions of the award.”
As for why Zaslav’s stock grants aren’t based on an increase in WBD’s stock price, the compensation committee provided this explanatory note: “Because Mr. Zaslav received a sizeable grant of premium priced stock options upon execution of his employment agreement in 2021 that will require significant stock price appreciation in order for Mr. Zaslav to recognize value, the Committee believes that Mr. Zaslav’s compensation was already appropriately aligned with our stock price performance and he is adequately incentivized to take actions that will lead to stock price appreciation.”
By the way, the WBD board’s compensation committee also spun the company’s losing the rights to NBA games in the U.S. as a plus. Zaslav’s accomplishments in 2024, according to the committee, included that he “Resolved WBD’s negotiations with the NBA, resulting in a more efficient long-term relationship with the league in which WBD retained valuable rights to NBA games in several international markets, as well as NBA digital highlights globally for Bleacher Report.”
