Amid Sales Review, Warner Bros. Discovery Clarifies That CEO David Zaslav’s Employment Agreement Will Let Him Retain Stock Options in the Event of a ‘Change in Control’

Warner Bros. Discovery has assured president and CEO David Zaslav and other top executives that they will be able to retain their stock options even if the company is sold. This comes as the media conglomerate has received acquisition interest from multiple parties and has initiated a process to review offers.

Last month, Warner Bros. Discovery announced that it had received bids from various parties, including Paramount Skydance, Comcast, and Netflix. The deadline for nonbinding first-round bids is set for Nov. 20, with the company aiming to complete the process by the end of the year.

The potential bidding war for Warner Bros. Discovery began after the company announced its plans to split into two separate entities. One entity, Warner Bros., will include HBO Max streaming and studios and will be led by Zaslav as CEO. The other entity, Discovery Global, will consist of TV networks and Discovery+ and will be headed by current CFO Gunnar Wiedenfels. The separation is scheduled to be finalized by April 2026.

As part of the strategic review process, Warner Bros. Discovery’s board is considering a deal structure that would allow a merger of Warner Bros. with a third-party acquirer alongside a spin-off of Discovery Global to shareholders. The original plan was to spin off Warner Bros. as an independent company, with Discovery Global remaining. However, an amendment to Zaslav’s employment agreement clarifies that a reverse spinoff, where Warner Bros. is the remaining entity, will not affect Zaslav’s stock options.

If a reverse spinoff occurs before Dec. 31, 2026, the same terms of Zaslav’s employment agreement will apply, ensuring that his stock options remain outstanding and eligible to vest and be exercised. The amendment also extends Zaslav’s employment agreement until Dec. 31, 2030, in case of a qualifying change in control agreement before Dec. 31, 2026.

The new employment agreement significantly reduces Zaslav’s target annual compensation, aligning it more with long-term incentives to incentivize sustained, long-term value creation. Zaslav’s total compensation in 2024 was $51.9 million, with the new agreement lowering his annual cash bonus opportunity and reorienting the total pay mix towards long-term incentives.

As CEO of Warner Bros., Zaslav’s base salary will remain at $3 million per year, with a reduced target annual cash bonus opportunity of $6 million following the separation or reverse spinoff. He will also be eligible to receive annual equity awards under a new Warner Bros. equity incentive plan with a reduced target value of $7.5 million per year during the term of his employment. David Zaslav, the CEO of Warner Bros. Discovery, has recently entered into a new agreement that outlines his compensation package. Under this agreement, Zaslav’s equity bonus target value per year is set at $23.5 million. This substantial bonus is designed to incentivize Zaslav and reward his performance in leading the company.

In addition to his annual equity bonus, Zaslav also received a one-time “inducement” on June 12. This inducement is intended to motivate Zaslav to successfully complete the Separation and create value for stockholders. The inducement consists of 20,898,776 stock options, with 60% being performance-vesting stock options and 40% being time-based stock options. Furthermore, Zaslav is slated to receive an additional 3,052,734 stock options on January 2, 2026, subject to the same split of performance-vesting and time-based vesting conditions.

It is important to note that there are various scenarios and contingencies that may impact Zaslav’s ability to exercise all of his stock options. However, these incentives are designed to align Zaslav’s interests with those of Warner Bros. Discovery’s shareholders and drive performance.

Until the separation or reverse spinoff occurs, Zaslav will continue to serve as the CEO of Warner Bros. Discovery with the same annual base salary, cash bonus opportunity, and grants of performance-based restricted stock units as outlined in his prior agreement. This continuity ensures stability and consistency in leadership as the company navigates through the process of separation.

Overall, Zaslav’s new agreement reflects the board’s confidence in his leadership abilities and commitment to driving value for shareholders. With a generous equity bonus package and inducement to incentivize performance, Zaslav is well-positioned to guide Warner Bros. Discovery through its next phase of growth and development.