Warner Bros. Discovery is in the midst of a potential bidding war as multiple parties have shown interest in acquiring the media conglomerate. The company announced last month that it had received several acquisition offers and has begun the process of reviewing them. Paramount Skydance, Comcast, and Netflix are some of the known bidders for Warner Bros. Discovery, with the deadline for nonbinding first-round bids set for Nov. 20.
The bidding war comes on the heels of Warner Bros. Discovery’s decision to split into two separate entities. The company announced in June that it would divide into Warner Bros., which will include HBO Max streaming and studios, and Discovery Global, which will consist of TV networks and Discovery+. David Zaslav, the current president and CEO, will lead Warner Bros., while the current CFO Gunnar Wiedenfels will head Discovery Global. The separation process is expected to be completed 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 along with a spin-off of Discovery Global to shareholders. The original plan was to spin off Warner Bros. as an independent company, but an amendment to Zaslav’s employment agreement clarifies that if there is a “reverse spinoff,” where Warner Bros. remains the entity and Discovery Global is spun off, Zaslav and other top executives will still be able to keep their stock options.
The amendment also outlines that if a qualifying change in control agreement is entered into before Dec. 31, 2026, and the separation or reverse spinoff has not been completed, Zaslav’s employment agreement will be extended until Dec. 31, 2030. This extension is intended to ensure Zaslav’s leadership of Warner Bros. in the event of a change in control. The new agreement also reduces Zaslav’s target annual compensation and reorients the total pay mix towards long-term incentives to align with shareholder interests and incentivize long-term value creation.
Zaslav’s pay package in 2024 increased by 4.4% to a total compensation of $51.9 million, including a cash bonus and performance-based restricted stock grants. Under the new agreement, Zaslav will have a base salary of $3 million per year and a reduced target annual cash bonus opportunity of $6 million. He will also be eligible to receive annual equity awards with a target value of $15.5 million in the first year and $7.5 million per year thereafter.
Overall, Warner Bros. Discovery is taking steps to ensure that its top executives, including David Zaslav, will be able to retain their stock options and incentives in the event of a sale or change in control, as the company navigates through the process of potential acquisition offers. David Zaslav, the CEO of Discovery, recently signed a new agreement that includes an equity bonus target value of $23.5 million per year. This agreement, approved by the board’s compensation committee, aims to incentivize Zaslav to successfully complete the Separation and create value for stockholders.
As part of this agreement, Zaslav received a one-time “inducement” in the form of 20,898,776 stock options. These options are split into 60% performance-vesting stock options and 40% time-based stock options. In addition, Zaslav is set to receive 3,052,734 stock options on Jan. 2, 2026, subject to the same split of performance-vesting and time-based vesting conditions, provided that he remains employed on that date. However, there are various scenarios and contingencies in place that may limit Zaslav’s ability to exercise all of these stock options.
Until the separation or reverse spinoff takes place, 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 previous agreement.
Overall, this new agreement reflects the board’s confidence in Zaslav’s leadership and ability to drive growth and value for Discovery and its shareholders. With a significant equity bonus target value and additional stock options, Zaslav is well-positioned to steer the company towards future success.
