During an annual virtual U.S. Securities and Exchange Commission meeting, many shareholders of Warner Bros. Discovery cast their say-to-pay votes against the 2022 executive compensation for CEO David Zaslav. While the number of votes against the compensation was staggering, it was still ratified by about more than 50% of the shareholders.
Even so, these votes are more advisory than anything fully binding, though they can still have an impact on the directions the shareholders take. Most companies usually get a 90% approval on say-to-pay votes with 70% considered dismal in comparison. In the case of a high vote against compensation, as was shown in Disney and Netflix’s shareholders, management would negotiate with the shareholders to tweak the following year’s compensation.
Earlier this year, Warner Bros. Discovery announced that part of Zaslov’s compensation would be through free cash flow, which will allow WBD to save enough to pay for their debts while balancing the studio’s budget. However, some organizations like the Institutional Shareholder Services (ISS) have advised against ratifying the 2022 compensation. According to their statement, the compensation has been amended since the previous one, but it still “maintains a problematic severance arrangement.” Not only are Zaslav’s bonuses outsized, but his compensation also fails to disclose “strategic goal targets and performance under both annual and long-term incentive programs.”
With the WGA strike underway, policies like these can show the rest of Hollywood the unfair differences in wages between writers, below-the-line crew members, and above-the-line leaders.
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