Warner Bros. Discovery has reached an agreement with CEO David Zaslav to ensure that he will be able to retain his stock options in the event of a change in control of the company, per a Thursday filing with the U.S. Securities and Exchange Commission.
Under the original employment agreement, which was established in June based on the company’s planned split into Warner Bros. and Discovery Global, Zaslav was set to receive a “significant reduction in his annual compensation” upon its completion in April and a one-time grant of stock options – 92% of which are subject to forfeiture if a separation or qualifying transaction does not occur prior to Dec. 31, 2026.
But now, according to an amendment made on Nov. 7, if the company pursues a “reverse spinoff” – in which it keeps Warner Bros. and spins off Discovery Global – Zaslav’s payout will be treated the same as long as it’s completed by Dec. 31, 2026. In addition, his signing options will remain “outstanding and eligible to vest and be exercised” after Dec. 31, 2026 if there’s a reverse spinoff or if WBD or the new Warner Bros. enter into a “definitive agreement for a transaction that would, upon completion, constitute a ‘change in control’ of WBD, but excluding any sale of Discovery Global or all or substantially all of its assets.”
In the event WBD enters into a qualifying change in control before Dec. 31, 2026 and has not completed its split or a reverse spinoff, Zaslav’s employment will continue through Dec. 31, 2030, which would’ve been the case had the separation been completed prior to Dec. 31, 2026 rather than ending Dec. 31, 2027.
“This extension is intended to secure Mr. Zaslav’s leadership of WBD for the same period that we had contracted to have him serve as the Chief Executive Officer of Warner Bros. following a Separation,” the filing states. “This ensures that, if the Strategic Review leads to our entering into a Qualifying CIC Agreement before the Outside Date, Mr. Zaslav will have the same opportunity to vest in, and incentives from, the Signing Options that he would have received had a Separation been completed in 2026.”
The amendment also clarifies that “certain internal restructuring transactions necessary to effect any of the strategic alternatives” under review will not constitute a change in control, or a qualifying transaction, nor result in accelerated vesting or any forfeiture conditions on the signing options.
In 2024, Zaslav raked in $51.9 million in total compensation, up 4.5% from the $49.7 million he took home the year prior. The package included a $3 million salary, $23,098,980 in stock awards, $23,897,060 in non-equity incentive plan compensation and $1,922,523 in “other” compensation.
Under the new agreement, Zaslav will continue to have a base salary of $3 million per year for the duration of his employment term. Following the separation or reverse spinoff, his target annual cash bonus will be reduced to from $22 million to $6 million, with the actual payout based on performance goals.
He will also be eligible to receive annual equity awards following the separation or reverse spinoff under a new equity incentive plan with a target value of $15.5 million the first year that he receives an equity grant from the company and an annual target value of $7.5 million per year thereafter during the term of his employment. Per Zaslav’s current employment agreement with WBD, his equity bonus target value per year is $23.5 million.
Zaslav also has an award of 20,898,776 stock options, 60% of which vest based on performance and 40% which vest based on time. He’s also set to receive 3,052,734 stock options on Jan. 2, 2026, which will be subject to the same split of performance-vesting and time-based vesting conditions (and provided that he remains employed on that date). Depending on various scenarios and contingencies, Zaslav may not be able to exercise all of those stock options.
Prior to the separation or reverse spinoff, Zaslav will continue to serve as Warner Bros. Discovery’s CEO with the same annual base salary, cash bonus opportunity and grants of performance-based restricted stock units under his prior agreement.
WBD’s compensation committee said the amendment to Zaslav’s employment agreement would “foster a stronger alignment with stockholders and incentivize sustained, long-term value creation.”
Letters have also been sent to other executives, including chief financial officer Gunnar Wiedenfels, chief revenue and strategic officer Bruce Campbell and global streaming and games president and CEO JB Perrette, who have entered into similar agreements that are contingent upon a separation.
It comes as Paramount-Skydance has submitted multiple bids for all of Warner Bros. Discovery, which were rejected for being too low, while Netflix and Comcast have been exploring potential bids for the company’s streaming and studios business. An individual familiar with the matter told TheWrap that the first round of non-binding bids are due Nov. 20, with a decision on a possible deal expected to be made around Christmas.
