Discovery Communications

Annual meeting:  April 8, 2022

Discovery CEO David Zaslav’s total reported compensation of $246,573,481 is the highest we’ve seen this year. Discovery is one of a handful of companies that has been on As You Sow’s Overpaid CEOs list every year we’ve done the report. The stock options may ultimately not be worth the $202,889,764, their estimated grant date value, but even without them Zaslav is overpaid given the company’s performance. But the $3 million salary, one of the highest among S&P 500 CEOs, is guaranteed. In fact, in May the board signed a new employment agreement with Zaslav that extends through the end of 2027.

There is no advisory vote on compensation at the company this year because Discovery is one of the few companies that has the vote every three years. Thus, ISS, Glass Lewis & Co. and Egan-Jones Proxy Services have all recommended that shareholders vote against all directors who are up for election.

Deadline summarizes some of the concerns raised by ISS: “On a scale of one to 10, it rated Discovery’s board structure, compensation, shareholder rights and audit & risk oversight all tens, the highest risk. On compensation, ISS calculated that the three-year average of Zaslav’s total pay was $125.4 million, or 6.7 times the median of his CEO peer group. His cumulative three-year total pay was $376.2 million.”

The reason for the persistence of excessive pay practices and the unusual triennial vote on pay at Discovery – multiple classes of stock that give outsize power to just a few shareholders – are the same reasons that opposition votes against directors are likely to be ignored. Over 70% of votes are controlled by John Malone and Advance/Newhouse programing partnership.

Shareholders need to find new ways to hold these shareholders accountable, and one way to do so may be voting against them at other companies where they serve as well. Here, gathered from the proxy statement, are some other boards where Discovery directors serve:

Paul Gould:                         Radius Global Infrastructure, Inc.; Liberty Latin America, Ltd.; Liberty Global plc

Daniel Sanchez:                 Liberty Latin America Ltd

Steven Miron:                    Charter Communications

Robert Bennett:                HP Inc., Liberty Media Corporation

David Zaslav:                      Grupo Televisa S.A.B.; Sirius XM Radio, Inc.

Robert L. Johnson:           G-III Apparel Group, Ltd.; RLJ Lodging Trust; KB Home

Perhaps if shareholders extend their votes to situations where they carry more authority the directors will get the message.