The extension comes with a nice compensation bump for the Discovery chief, already one of the media industry’s highest paid CEOs with $49.9M in 2012. The goal is to make David Zaslav “a significant long-term shareholder in Discovery Communications,” the company says this morning adding that he “has committed to hold the majority of his equity from stock grants to term, furthering the alignment of shareholder and management interests.” Following a year when the company stock appreciated 36.2%, Zaslav’s annual salary will remain at $3M, but his target annual bonus for 2014 will go to $6.6M and rise by $600,000 a year until 2018 when it will be $9M, according to an SEC filing this morning. His 2011 contract set the target at $5M with annual increases of $500,000. By the end of March he’ll also receive 224,845 sign-on “performance-based restricted stock units” that will pay off if he remains on the job and the company meets undisclosed performance metrics at year end. He also will receive stock appreciation rights that pay off if the share price continues to rise. Zaslav will have a $1,400 a month car allowance and has personal use of the Discovery jet for 200 hours a year — although the company will only pay for the first 100 hours. The stock awards vest if someone else takes control of Discovery. “Securing David for the next six years recognizes his value to the enterprise, and provides continuity, strong leadership, and his trademark high energy to Discovery for many years to come,” company founder and Chairman John Hendricks says.
Here’s the company’s release:
(Silver Spring, Md.) – Discovery Communications is pleased to announce the extension of President and CEO David Zaslav’s employment contract through the end of the decade.
“David has done a superb job. He built a strong management team that has expanded the company’s reach and relevance, increased its market share domestically and around the world, and created a bigger, stronger portfolio of brands. We look forward to working with David to do more of the same over the next six years,” said Discovery Director John Malone, Chairman of Liberty Media Corporation and Liberty Global, Inc.
Since joining Discovery as CEO in January 2007, Zaslav and his management team have overseen a broad global expansion at the company by doubling the total number of Discovery networks around the world from 100 to nearly 200, growing global cumulative subscribers over 50% to 2.2 billion, and completing the company’s largest acquisition of SBS Nordics in 2013. Discovery’s channels are now distributed in more than 220 countries making it the number one international pay-TV programmer in the world.
“David has done a terrific job over the past seven years. This long-term commitment is equity-based, and continues to align David’s performance with the company’s growth and the ongoing creation of shareholder value. We are excited that David and his first-rate management team will continue driving growth across Discovery’s global assets for the remainder of the decade,” said Discovery Director Robert Miron.
In 2008, Discovery Communications became a fully public company and since that time its total market capitalization has increased from $6 billion to over $30 billion currently. Over this period, the company’s overall profits have tripled, U.S. market share has grown from 5% to over 10%, and the company has launched a number of new network brands including Investigation Discovery (ID), Velocity, Destination America, and OWN, a joint venture with Oprah Winfrey.
“Securing David for the next six years recognizes his value to the enterprise, and provides continuity, strong leadership, and his trademark high energy to Discovery for many years to come,” said John Hendricks, Founder and Chairman of Discovery Communications.
Term of employment is through December 31, 2019, and makes Zaslav a significant long-term shareholder in Discovery Communications. Zaslav has committed to hold the majority of his equity from stock grants to term, furthering the alignment of shareholder and management interests.
“I want to thank Discovery’s visionary Board of Directors, best-in-class management team, our advertising and affiliate partners, and all of the passionate viewers around the world,” said Zaslav. “It has been an amazing and successful seven years, and I am excited to have the opportunity to lead this great company for the rest of the decade. With the most creative and dynamic leadership team in the business, a talented and committed workforce, a strong financial position, and an unmatched global platform, I am extraordinarily confident of Discovery’s growth prospects for the years ahead.”