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6 Months : From Mar 2019 to Sep 2019
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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