Discovery Communications Inc. has extended Chief Executive David Zaslav’s lucrative employment agreement for another six years, fortifying the leadership of the cable television programming company after a period of sustained growth.
The deal announced Friday modifies how Zaslav’s annual compensation is calculated to provide him with substantial stock holdings in the company. He will receive a base salary and bonus targets of about $10 million a year in the early years of the agreement.
Zaslav, who joined Discovery in January 2007, will continue to collect one of the most lucrative executive compensation packages in corporate America. In 2012, he received compensation valued at nearly $50 million. The prior year, he garnered $52.4 million in cash, stock awards and other compensation.
With the allocation of more than 1 million restricted stock units this year, Zaslav’s 2014 compensation could exceed $100 million, based on the current value of Discovery shares.
“David has done a superb job,” media mogul John Malone, chairman of Liberty Media Corp. and a Discovery board member, said in a statement announcing Zaslav’s new employment agreement. “He built a strong management team that has expanded the company’s reach and relevance, increased its market share domestically and around the world, and created a bigger, stronger portfolio of brands.”
Zaslav’s base salary was set at $3 million a year for the duration of the agreement, according to a regulatory filing Friday with the Securities and Exchange Commission.
His target annual bonus will be $6.6 million in 2014, and increase $600,000 each year until 2018. In the pact’s final two years, his bonus targets will be $9 million a year.
The actual amount paid to Zaslav will be tied to several company performance objectives, “which will be determined each year by the compensation committee of the board … in consultation with Mr. Zaslav,” the regulatory document said. His contract, which took effect Thursday, expires Dec. 31, 2019.
Zaslav, who turns 54 this month, will be entitled to generous stock awards, which are designed to make him a significant shareholder in the company.
For example, Zaslav will receive nearly 225,000 restricted stock units during this fiscal quarter. In addition, this week he was granted more than 3.7 million units known as stock appreciation rights, which eventually will be paid to Zaslav in the form of cash and company stock.
Discovery also will provide Zaslav with a $1,400-a-month car allowance and use of the company’s jet for personal travel up to 200 hours a year — and Discovery will pay for the first 100 hours.
In its statement, Discovery credited Zaslav — who previously was a senior executive at NBCUniversal — for broadening the company’s reach by doubling the number of Discovery networks around the world.
Discovery now boasts nearly 200 networks, up from 100 when Zaslav joined the company. Discovery is distributed in more than 220 countries, making it the largest U.S. programmer overseas.
Discovery stock, along with that of other media companies, has soared in value during the last two years, closing Friday at $88.58, down 52 cents. When Zaslav joined Discovery in 2007, its shares were trading at about $17.
Zaslav also has experimented with Discovery’s U.S. television channels, including forming a joint venture with toy manufacturer Hasbro Inc. in a children’s channel called the Hub. He also forged a partnership with Oprah Winfrey to create OWN, the Oprah Winfrey Network. OWN, which Discovery co-owns, has seen ratings improve in the last year after a bumpy start.