ISS Recommends Warner Bros. Discovery Shareholders Reject CEO Zaslav's Severance Package

Institutional Shareholder Services (ISS), a major proxy advisory firm, has recommended that Warner Bros. Discovery (WBD) shareholders reject a proposed executive compensation package tied to a potential sale to Paramount Global. 35 billion in executive payouts.

ISS described the severance as a windfall but endorsed the merger itself. 4 billion all-stock transaction, announced in December 2023. 053 WBD Class B shares per Paramount Class B share, with adjustments for Class A shares.

The merger aims to create a combined media entity valued at approximately $20 billion.

specifically targeted Zaslav's payout, which would activate if the sale proceeds and he leaves the company.

Deadline reported that ISS labeled the package a windfall, advising rejection while supporting the Paramount acquisition. 35 billion, prompting ISS to urge investors to vote no on that item. The golden parachute for Zaslav includes cash severance, equity awards, and benefits calculated based on his current $52 million annual compensation.

Sources agree the payout structure follows standard change-of-control provisions but exceeds typical benchmarks for media executives. No other sources contradicted ISS's dual stance on compensation versus the deal.

Discovery and Paramount Global announced the merger on December 15, 2023, to consolidate streaming and content assets amid industry challenges. The combined company would control assets including HBO, Max, CBS, and Paramount+, serving over 100 million subscribers. Regulatory approval remains pending from the Department of Justice and FCC, with closure expected in mid-2024.

shareholders will vote on the merger and compensation plan at a special meeting scheduled for April 25, 2024, in New York.

ISS's influence is significant, as its recommendations sway up to 80% of institutional votes. Paramount's board has also endorsed the deal, with its shareholders voting on April 22, 2024. 4 billion, a 20% premium over its October 2023 closing price.

5% of the new entity, with Paramount holders receiving the remainder. Analysts project $1 billion in annual synergies from cost savings and revenue growth.