The recent rejecting 52 million package of David Zaslav, CEO of Warner Bruce Discovery Share Holders, may indicate that investors are paying more attention to executive compensation. As the concerns of overseas stagnation, recession and armed conflicts increase, investors are reluctant to reward the CEO, who have created poor profit with generous salaries in the past few years. Board members who approve the compensation of low -performing administrative teams in the current economic environment are endangered by investors and their reputation against their selection in the future.
After rejecting Zaslav's pay package, Warner Bruce is in the process of dividing the Discovery Company into two parts: a streaming and studios company that includes Warner Bruce Television, Warner Bruce Motion Picture Group, DC Studios, HBO Max, and a global network company, and a global network company. In a statement, Warner Bruce Discovery Chairman Samuel A de Puza Junior said the breakdown “reflects the board's ongoing efforts, which increases the price of the shareholders.” Unfortunately, the shareholders are not convinced, partially because the company changes some of what was done in the April 2022 integration by dividing the company.
According to reports, the price of Warner Bruce Discovery Stock is 60 % less since the merger. The company is also dealing with about $ 38 billion in loans, most of which will be filled with global networks. Due to this amazing performance, 59 % of the shareholders have been able to vote against the package of CEO Zaslav, a clear message that investors want to see improvement before increasing the existing executives.
Since the Warner Bruce Discovery Board approved the breakup and recommended that the shareholders approve the executive compensation plan, it gave the impression that the board members were fine with increasing the compensation of executives who were less responsible for the company's outstanding performance. Boards will be responsible for being ahead of this location. In these situations, the director would like to consider the following:
• The board may need to assess its compensation measurement with shareholders. Since the shareholders have rejected the current compensation plan, it is important for the board to understand what is the reason. Was the poor performance of the stock pricing or was the other aspect of how the compensation was formed, which led to the shareholders voting against the project? Also, since the board will create two new companies, it is important that the shareholders agree on how the CEOs and executive teams of the two entities will be compensated.
The Share Board may need to re -establish credibility with shareholders. Although the board has not been publicly blamed for the company's slow performance, the leadership of the vote board against the compensation plan can also represent some emerging dissatisfaction. The board should engage with key stakeholders to determine whether the shareholders are likely to vote against other steps that are proposing to the board in the future. The board should also ensure that key shareholders approve their plans to divide the company into two. The company cannot afford any negative surprise with the beginning of this complex process.
Board members should decide whether they want to be part of the board post breakup. Considering that the company has lost 60 % of its stock price in the last three years, it is time to consider leaving the board, which can be interpreted as a high note. Directors want to think about whether their partnership has benefited the company as much as they want. Leaving the board during the transfer can be a good way to end the board's appointment, which will face significant challenges while working in a very unexpected economic environment. If things do not improve rapidly, the choice of a director on the board may be suspected.
