ISS Backs Warner Bros-Paramount Deal But Rejects CEO David Zaslav's $886 Million 'Extraordinary' Golden Parachute

Institutional Shareholder Services (ISS), a salient advisory firm, has recommended that investors backmost the acquisition of Warner Bros. Discovery by Paramount Skydance, portion opposing the projected aureate parachute for executives.

According to the proposal, executives are acceptable to receive a full of $1.35 billion post-acquisition. This includes an “extraordinary aureate parachute” valued astatine $886.8 cardinal for Warner Bros. CEO David Zaslav and $466.2 cardinal for different executives. ISS contends that specified a payout is unjustified.

ISS besides raised concerns implicit an estimated “excise taxation grossup” of $335 cardinal for Zaslav, which helium would person solely owed to the deal’s execution. The aboriginal relation of Zaslav successful the merged entity remains unclear.

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Zaslav's aureate parachute, among the largest connected record, whitethorn beryllium reduced depending connected erstwhile the merger closes. The payout besides factors successful a 20% other taxation imposed by the IRS connected executives earning much than 3 times their mean compensation.

ISS highlighted that the other Warner Bros. executives are not receiving an excise tax. The bulk of Zaslav’s parachute outgo results from single-trigger benefits, which accelerate vesting based connected a azygous event, specified arsenic a alteration successful institution ownership.

This improvement comes connected the heels of a March regulatory filing, stating that Zaslav is acceptable for a monolithic payday exceeding $600 cardinal pursuing the Warner Bros. and Paramount Skydance acquisition deal. His compensation bundle included currency severance, vested stock, and a ample information of unvested stock awards, on with imaginable taxation reimbursements worthy up to $335 million.

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Earlier successful March, Zaslav besides sold 4 cardinal shares worthy astir $114 million, cashing retired portion of his involvement amid the Paramount deal. The shares were earned arsenic compensation betwixt January 2023 and February 2026.

Warner Bros. said nary excise taxation would use to David Zaslav if the woody closes successful 2027, but Paramount Skydance, and Warner Bros. purpose to implicit the merger by September 2026.

In December, President Donald Trump ordered the SEC to reappraisal proxy advisory firms ISS and Glass Lewis, focusing connected their usage of ESG and DEI policies. The determination is seen arsenic a triumph for critics, including Elon Musk, who person questioned the firms' influence.