Warner Bros. Discovery’s board of directors has adopted a transaction bonus program designed to retain key executives through the closing of Netflix’s $82.7 billion acquisition of its streaming and studio assets and the company’s separation of its linear networks business into Discovery Global.
Per a Friday filing with the U.S. Securities and Exchange Commission, the bonus program will “recognize and incentivize the contributions of selected key employees” to the success of the merger. It is also designed to “secure and encourage the continued employment of such employees through the consummation of the Separation and the Distribution and/or the Merger.”
Under the program, designated employees may receive a cash bonus from a pool of $38.7 million. The compensation committee will determine individual award amounts.
For employees who will support the SpinCo business following the separation, awards will not exceed 150% of each recipient’s base salary and will only be payable subject to their continued employment through consummation of the merger. For new executives that join between now and the merger’s closing, individual award amounts will be determined in consultation with Netflix.
WBD CEO David Zaslav, who raked in $51.9 million in total compensation, will not participate in the program.
The company previously entered into an amended employment agreement with Zaslav that will see him retain his stock options following a change of control in the company and is aimed at fostering “stronger alignment with stockholders” and incentivizing “sustained, long-term value creation.”
Under the new agreement, Zaslav will continue to have a base salary of $3 million per year for the duration of his employment term. Following the separation or reverse spinoff, his target annual cash bonus will be reduced from $22 million to $6 million, with the actual payout based on performance goals.
He will also be eligible to receive annual equity awards following the separation or reverse spinoff under a new equity incentive plan, with a target value of $15.5 million the first year that he receives an equity grant from the company, and an annual target value of $7.5 million per year thereafter during the term of his employment. Per Zaslav’s current employment agreement with WBD, his equity bonus target value per year is $23.5 million.
Zaslav also has an award of 20,898,776 stock options, 60% of which vest based on performance and 40% which vest based on time. He’s also set to receive 3,052,734 stock options on Jan. 2, 2026, which will be subject to the same split of performance-vesting and time-based vesting conditions (and provided that he remains employed on that date). Depending on various scenarios and contingencies, Zaslav may not be able to exercise all of those stock options.
The Netflix merger is expected to close within the next 12 to 18 months, while the Discovery Global separation is slated for completion in the third quarter of 2026.
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