Warner Bros. Discovery (WBD) shareholders overwhelmingly rejected a proposed pay raise for CEO David Zaslav, citing a decline in revenue and a stock price that remains well below its initial value. Despite a 20% uptick in share price over the past year, WBD's overall value has decreased significantly since its inception. Analysts contend that Zaslav's failure to increase company value makes his salary demands unjustifiable. Furthermore, WBD faces challenges transitioning to streaming, a common struggle across the industry with competitors also experiencing heavy losses.
A CEO has many jobs, but job one is increasing the value of the company," said media analyst Joe Bonner of Argus Research, who's neutral on WBD shares. "That demonstrably has not happened under Zaslav, which makes an outsized pay package pretty egregious."
Although WBD shares have risen about 20% in the past year, they're still trading below $10. That's down from the $24 they were worth when this media conglomerate was created in April 2022.
WBD isn't alone in having trouble with the transition to streaming. Rival companies with heavy pay-TV exposure have also struggled. Paramount Global's stock is down 67% since April 2022, and even mighty Disney went through another round of layoffs this week.
A WBD spokesperson said the board of directors "appreciates the views of all its shareholders and takes the results of the annual advisory vote on executive compensation seriously."
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