Netflix’s massive $72 billion acquisition of Warner Bros. Discovery marks a significant windfall for stockholders, whose shares are being bought at more than triple their value from just earlier this year. Among the big winners is Warner Bros. Discovery’s CEO, David Zaslav, who stands on the brink of becoming a billionaire if the deal successfully closes.
Long recognized as one of the highest-paid executives in the media industry, Zaslav, 65, has earned over $200 million in salary and cash bonuses during his nearly two-decade tenure leading the New York-based studio. Despite the company’s turbulent journey marked by layoffs and strategic missteps, his compensation packages have consistently drawn criticism.
Zaslav’s Compensation: A Double-Edged Sword
A significant portion of Zaslav’s compensation has failed to meet expectations in recent years. Options granted to him around the time of the Discovery-Warner Bros. merger were valued at over $200 million in the company’s 2021 proxy statement. However, due to the company’s struggling share price, these options remain out of the money and worthless, even with the latest acquisition deal.
Earlier this year, a controversial contract renegotiation provided Zaslav with a new opportunity to enhance his wealth. This renegotiation awarded him new options worth over $400 million at Netflix’s acquisition price, positioning him to join the ranks of rare non-founder executives reaching a net worth of $1 billion.
A spokesperson for Warner Bros. did not respond to requests for comment on the matter.
Shareholder Discontent and New Contract Terms
Earlier this year, Zaslav’s substantial compensation became a focal point for shareholder dissatisfaction. At approximately $10 per share, Warner Bros.’ stock had plummeted more than 60% from its peak in April 2022. Despite this, the studio disclosed in its proxy statement that Zaslav received nearly $52 million in compensation in 2024, including over $21 million in cash performance awards for the sixth consecutive year.
“It’s a shockingly high salary for what cannot be viewed as a successful performance to date,” commented former ESPN President John Skipper on the podcast Pablo Torre Finds Out, referring to the advisory vote rejecting Zaslav’s pay package.
In response to the advisory vote, Warner Bros.’ board stated it “appreciates the views of all its shareholders and takes the results of the annual advisory vote on executive compensation seriously.” Just a week later, Zaslav signed a new contract extending his employment through 2030 and granting him approximately 23 million stock options.
The existing options had an exercise price of at least $35 per share, rendering them worthless unless Zaslav could more than triple the company’s share price. The new options, however, came with a more attainable hurdle of just over $10, making them potentially valuable with only a modest increase in stock price. However, the majority of these options would only be redeemable if Zaslav successfully guided Warner Bros. through a planned spinoff of its cable networks by the end of 2026.
Netflix Acquisition: A Game-Changer
In early November, the company amended the agreement to broaden the conditions under which Zaslav’s options could vest, ensuring they would remain eligible if the studio entered any change-in-control transaction. This amendment meant that the options would vest regardless of how an eventual deal was structured and whether Paramount, Skydance, Netflix, or another suitor won the bidding war.
After fielding multiple enhanced bids, Netflix announced on Friday it had acquired Warner Bros.’ streaming studio assets. Once the deal closes, Zaslav’s options tied to his 2025 employment agreement will be worth approximately $420 million, based on Netflix’s $27.75 per share cash-and-stock offer price. In addition to his equity awards, salary, and cash bonuses, Zaslav currently owns Warner Bros. stock valued at about $186 million at the offering price.
The acquisition is also expected to trigger change-in-control terms that will accelerate the vesting of nearly 6.3 million performance restricted stock units awarded to Zaslav, worth more than $170 million at the acquisition price.
Netflix’s acquisition of Warner Bros.’ streaming arm is anticipated to close within 12 to 18 months, with an antitrust review likely to attract intense scrutiny.
As the media landscape continues to evolve, this acquisition not only reshapes the competitive dynamics but also underscores the significant financial rewards that can accompany strategic leadership in the entertainment industry.
