We all know about the debacle that happened over at the DC Studios when James Gunn and Peter Safran took over. Henry Cavill’s removal from the DC Universe was almost as sudden as his return, which was quite short-lived. While this was happening, Warner Bros. Discovery was facing yet another problem – debt.
The company, drowning in debt, made several decisions to reduce costs and Henry Cavill’s removal and cancellation of Man of Steel 2 could be some of them. Now, it looks like Warner Bros. Discovery turning its attention to creating free cash flow for the company and getting over its debt. Thanks to this, WBD has made some adjustments to its compensation packages for the company’s top executives, including CEO David Zaslav.
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Warner Bros. Discovery Tweaks David Zaslav’s Contract
The Hollywood Reporter recently revealed that Warner Bros. Discovery is looking to generate “free cash flow and reducing its debt load.” WBD had a debt of a whopping $50 billion and in order to overcome that, cash flow is quite a necessity. Now, because of this change, the top executives of the company will have their compensation packages tweaked and linked to how well the company performs in terms of the targets it has set for free cash flow.
Warner Bros. Discovery Board Chairman, Samuel A. Di Piazza Jr. released a statement to The Hollywood Reporter which reads,
“The changes to the Warner Bros. Discovery executive compensation program are designed to further incentivize Company employees, including members of its leadership team and others whose efforts are critical to achieving the key near-term financial objectives of increased free cash flow and reduced leverage. The WBD board is confident that these additional incentives offer a more competitive package against the backdrop of ongoing industry-wide transformation and economic headwinds, and better position the company to advance core drivers of shareholder value.”
Since Performance Restricted Stock Units (PRSUs) for 2023 are going to be linked to free cash flow, David Zaslav, who was initially bound to receive a PRSU of $12 million, could be eligible to double the amount. However, that will only happen if WBD successfully manages to perform splendidly and goes beyond the target which has been established. Zaslav is also entitled to an additional PRSU of $11.5 million which will also be linked to free cash flow and similarly will be eligible for doubling.
Previously, Zaslav told the executives to get back to him with a strategic plan for their units, which he stated should be taken care of as if they were their family businesses. He also ordered them to start from scratch and to prioritize free cash flow.
A Separate Pool for Warner Bros. Discovery Executives
Keeping the CEO aside, WBD will be separating a pot of $27 million in PRSUs. This is all set to go to the other employees and executives of the entertainment giant with Chief Revenue and Strategy Officer, Bruce Campbell receiving a total of$2 million in PRSUs. The same goes for the company’s CFO as well as for the Head of Global Streaming and Games. Other top executives would be securing PRSUs of either $1.5 million or $1 million.
Apart from this, a pool of $15 million will be set aside, again, for other employees. The company stated that this pot would be “to recognize other employees throughout the organization, whose retention and efforts are also important to the success of our initiatives with respect to free cash flow and leverage reduction.”
Zaslav told analysts that while 2022 was the year for “Restructuring,” 2023 is going to be a year of “Building.” He added that while this is just the beginning and there’s still a long way to go, everyone at the company is doing their best to increase free cash flow as well as reduce the entertainment giant’s debt. Only time will tell if the plans end up working out for WBD’s betterment.
Source: The Hollywood Reporter