Is it a coincidence Discovery Communications released its proxy late on a Friday leading into a holiday weekend? I suspect not when you look at the breathtaking salary it discloses for CEO David Zaslav in 2014, the first year of his new contract. It’s $156.1 million, up from $33.3 million in 2013.
To be sure, the bulk of it comes from one-time stock awards that vest over six years. The package breaks down: $3 million in salary, $94.6 million in stock awards, $50.5 million in option awards, $6.1 million in non equity incentives, and $1.9 million in other compensation. The “other” category includes $296,930 for personal use of the company aircraft, $50,324 for tax gross-ups, a $16,800 car allowance, $16,619 for personal security, and $3,614 for home office expenses.
In determining his bonus, the board decided that Zaslav achieved 96% of his quantitative goals and 95% of his qualitative ones. The huge slugs of stock awards in his new contract are designed to “drive immediate shareholder alignment and encourage long-term ownership of our stock,” the proxy says. “This contract rewards Mr. Zaslav for the value he has created and the continued strategic direction he provides and requires sustained performance over time for that award to have value. At the end of his contract, Mr. Zaslav will own a substantial amount of equity of Discovery, which reinforces his alignment with our shareholders and encourages long-term ownership of our stock.”
But some shareholders may wonder how an executive could fare so well in a year when Discovery stock did not. The adjusted stock price fell 25.4% in 2014, a year when the Standard & Poor’s 500 appreciated 17.2%. Discovery revenues increased 13.2% to $6.27 billion with net income up 6% to $1.14 billion.
The board’s compensation committee consists of former Advance/Newhouse Chairman Robert Miron, financial consultant Robert Beck, and Allen & Co’s Paul Gould.
The annual shareholders’ meeting will take place on May 20 at Discovery’s headquarters in Silver Spring, MD.