Warner Bros. Discovery introduced a new executive compensation program designed to incentivize its executives and employees to focus on increasing the company’s free cash flow and reducing its debt.
“The WBD Board is confident that these additional incentives offer a more competitive package against the backdrop of ongoing industry-wide transformation and economic headwinds, and better position the company to advance core drivers of shareholder value,” WBD board chairman Samuel Di Piazza told TheWrap in a statement on Monday.
According to a regulatory filing, WBD CEO David Zaslav is amending his existing employment agreement to double the number of performance-related restricted stock units, or PRSUs, he is eligible for.
Zaslav, who received $246 million in total compensation in 2021, could get an additional $12 million in stock awards on top of his salary and other benefits during the years 2023, 2024 and 2025, the filing notes. He is also eligible for separate $11.5 million worth of PRSUs, which could be doubled to $23 million and is also tied to free cash flow performance. The ultimate value of the stock units will vary based on the price of the company’s shares.
An additional $27 million has been set aside for bonuses to other employees, with $11.75 million earmarked for corporate and financial executives with cash flow and debt-management responsibilities.
Chief Revenue Officer Bruce Campbell, Chief Financial Officer Gunnar Wiedenfels and Global Streaming CEO JB Perrette are all eligible for $2 million each, while international chief Gerhard Zeiler is eligible for $1.5 million and Chief People and Culture Officer Adria Alpert Romm and Executive Vice President and General Counsel Savalle Sims are each eligible for $1 million. The remaining $2.25 million of the special 2023 PRSUs will be award to “significant contributors.”
There will also be a pot of $15 million in restricted stock units “to recognize other employees throughout the organization, whose retention and efforts are also important to the success of our initiatives with respect to free cash flow and leverage reduction,” the filing stated.
The move comes as the entertainment giant has been working to reduce its debt from the Discovery-WarnerMedia merger and undergoing a restructuring designed to cut back on costs through layoffs and content write-offs.
The company ended the fourth quarter with $45.5 billion in debt on its balance sheet and $3.9 billion in cash on hand. The company has repaid $7 billion in debt since the WarnerMedia merger closed in April, including $1 billion during the fourth quarter.
“Last year was a year of restructuring, 2023 will be a year of building. And off we go,” Warner Bros. Discovery CEO David Zaslav told analysts on the company’s earnings call. “We have a great hand and we’re doing a lot right. That said, there’s still more that we need to get right and we are hard at work.”
Shares of Warner Bros. Discovery have climbed approximately 60% year to date.
