Discovery CEO's Compensation Tripled in 2018 to $129 Million
March 22 2019 - 6:12PM
Dow Jones News
By Benjamin Mullin
Discovery Inc. Chief Executive David Zaslav received total
compensation valued at $129.4 million in 2018, more than three
times his compensation the year before, the company said in a
securities filing Friday.
The compensation package makes Mr. Zaslav the highest paid U.S.
executive of 2018, according to filings so far. His salary in 2018
remained flat at $3 million. The raise is largely the result of a
substantial increase in stock-option awards tied to the contract
extension Mr. Zaslav signed last year.
That employment agreement runs through 2023. The burst of
options grants was accounted for in 2018; his annual compensation
for the remainder of his deal will return to levels more consistent
with earlier years, a company spokesman said.
The payout came during a year where Mr. Zaslav closed
Discovery's $11.9 billion acquisition of Scripps Networks
Interactive Inc., parent of HGTV, Food Network and Travel Channel.
That merger was aimed at solidifying Discovery's footing among
female TV audiences, creating a more balanced advertising profile
for the company.
In 2018, revenue grew 54% to $10.5 billion, including the
benefit of the Scripps deal. Without the impact of the merger,
revenue was up 4% for the year. Shares rose 7% in 2018.
The second-highest paid U.S. executive based on filings so far
in 2018 is Robert Iger, the chief executive of Walt Disney Co., who
pulled in about $66 million in total compensation, according to a
Wall Street Journal analysis of data from MyLogIQ. The median
compensation was $12.2 million.
Under the terms of Mr. Zaslav's 2018 employment agreement, his
target bonus will be $22 million in 2019 and remain at that level
for each subsequent year of the term. The actual bonus he will
receive will depend on performance.
Media companies like Discovery are under threat from cable TV
cord-cutting and the rise of streaming competitors like Netflix
Inc. and Amazon.com Inc. Pay-TV providers are starting to drive a
harder bargain in their channel-carriage negotiations, while new
"skinny bundles" only offer certain networks. Audience declines
across the industry are making it challenging to grow advertising
revenue fast.
In 2018, distribution revenue at Discovery's U.S. networks was
up 1%, as price increases offset the loss of cable TV subscribers.
U.S. advertising was up 3%.
Mr. Zaslav has said the company is focused on developing and
owning its content, and is looking for partnerships with big brands
and personalities that consumers will gravitate to -- either on
traditional cable TV or direct-to-consumer streaming services.
Last year, Discovery struck a deal with Chip and Joanna Gaines,
the stars of the HGTV show "Fixer Upper." The multiplatform deal
included a minority stake in one of Discovery's smaller channels
and made Mr. and Mrs. Gaines creative heads of the network.
Discovery has also launched GolfTV, a streaming service, with
the PGA Tour. Golf legend Tiger Woods signed an exclusive deal to
develop programming for the service, including instructional
videos, his preparation routines and access to him before and after
tournaments.
When it reported fourth quarter results, Discovery noted that
soft ratings at the flagship Discovery channel have been a
challenge, but the company said it was working through those issues
and emphasized that the channel was still the top nonsports channel
for men in the U.S.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com
(END) Dow Jones Newswires
March 22, 2019 17:57 ET (21:57 GMT)
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