WBD CEO's $887M Golden Parachute 'Problematic'

Proxy advisory firm Institutional Shareholder Services (ISS) is urging shareholders to approve the $110 billion merger between Paramount and Warner Bros. Discovery, while simultaneously recommending they reject an "extraordinary" and "problematic" $887 million golden parachute for WBD CEO David Zaslav.

ISS strongly criticized the massive executive payout, which ranks among the highest ever observed. The firm specifically condemned the package's "single trigger vesting acceleration," meaning Zaslav's unvested equity awards pay out immediately upon a change in control. The compensation includes over $517 million in equity, $34 million in cash, and a highly controversial $335.4 million tax reimbursement. ISS noted that accelerating recently granted, multi-year equity awards constitutes a "windfall" and called excise tax gross-ups inconsistent with good corporate governance.

David Zaslav

Despite the fierce opposition to Zaslav's compensation, ISS supports the underlying merger transaction. The advisory firm noted that the deal provides a "meaningful premium" to shareholders and resulted from a competitive public bidding war involving Netflix and Paramount/Skydance, giving investors comfort that it is the best available option and warning of downside risks if not approved.

The ultimate size of Zaslav's payout will depend heavily on the merger's timeline. The $335.4 million tax reimbursement estimate was based on a hypothetical March closing. Under IRS rules, that figure will decline significantly as time passes; WBD’s outside tax advisers estimate that if the closing occurs in 2027, Zaslav will not receive any tax reimbursement payment.