Warner Bros Discovery Shareholders Reject CEO David Zaslav's $51.9 Million Pay Package Amid Stock Slump, Debt Downgrade

Warner Bros. Discovery Inc. WBD shareholders delivered a rebuke to CEO David Zaslav‘s leadership on Tuesday, with over 59% voting against his $51.9 million compensation package for 2024 in the company’s annual “say-on-pay” ballot.

What Happened: The symbolic vote represents growing shareholder frustration with executive compensation at the media conglomerate, which has seen its stock plummet 59% since the April 2022 merger of AT&T’s WarnerMedia and Discovery Communications created the company, The Wall Street Journal reported. More than 80% of shareholders participated in the non-binding vote.

Zaslav’s pay package rejection marks a significant deterioration from last year, when 50.8% of shareholders approved executive compensation. Corporate governance firm ISS considers anything below 70% approval as “low support.”

The compensation controversy comes as Warner Bros. Discovery faces mounting financial pressures. S&P Global Ratings downgraded the company’s debt to junk status in May, citing challenges in its cable-network business as consumers abandon traditional television for streaming services.

Why It Matters: Warner’s cable networks, including CNN, Food Network, and Discovery Channel, continue experiencing rating and revenue declines. The company’s HBO Max streaming service, while profitable and adding subscribers, lags significantly behind industry leaders Netflix Inc. NFLX and Walt Disney Co. DIS, the report noted.

Bank of America Securities analyst Jessica Reif Ehrlich maintains a Buy rating on Warner Bros. Discovery with a $14 price target, calling the debt downgrade “ironically positive” for equity holders. Ehrlich argues the downgrade increases strategic flexibility by removing a “double-trigger” change of control covenant that previously limited strategic options.

Entertainment industry CEO compensation typically exceeds other sectors, according to the report. Netflix co-CEOs Ted Sarandos and Greg Peters each received over $60 million in 2024, while Disney’s Bob Iger earned $41.1 million. However, shareholders at both companies have previously rejected executive pay packages in similar non-binding votes.

WBD stock is showing positive momentum with an upward short- to long-term price trend, according to Benzinga Edge Stock Rankings. However, it faces challenges in growth and valuation. See the full stock breakdown here.