Leading Shareholder Advisor ISS Slams David Zaslav’s “Windfall” Golden Parachute

Leading proxy advisory firm Institutional Shareholder Service recommended Warner Bros. Discovery shareholders support the company’s sale to Paramount Skydance but to reject CEO David Zaslav’s potential $886 million merger-related golden parachute — calling it “extraordinary,” not in a good way.

WBD stockholders will vote April 23 on both the deal and the payment at a special meeting.

“The value disclosed in the golden parachute table for CEO Zaslav at over $886 million represents one of the highest golden parachute estimates ever observed,” the firm wrote in its analysis of the figures WBD laid out in an SEC proxy filing last month.

ISS focused in particular on two elements. First, a large of chunk of the payout, $335 million, is a so-called excise tax gross-up — or an additional payment to reimburse taxes. WBD says that amount could decline depending on merger timing — if the close moved into 2027 for instance. Paramount has said it expects to clinch the deal in the third of quarter of 2026 pending the WBD shareholder vote and regulatory approvals.

Regardless, says ISS, “Excise tax gross-ups represent an extraordinary cost that are inconsistent with common market practice, and most companies have eliminated such entitlements as a matter of good governance.”

ISS also noted that over $500 million of equity grants to Zaslav, including as recently as January, are what’s called “single-trigger” with vesting automatically accelerating at the merger. “The auto-acceleration of unvested equity is not a best practice, and the full vesting acceleration of very recently granted equity intended to cover multiple years represents a windfall,” wrote the firm. “Support for the golden parachute proposal is not warranted.”

Acceleration entitles a stockholder to have some or all of their unvested shares automatically vest ahead of schedule upon a single trigger event, in this case WBD’s sale.  

The payout also includes $34.2 million in cash severance.

The shareholder vote on the golden parachute is advisory only, or non-binding.

Zaslav has been one of the highest compensated CEOs in media and, some years, in the top across sectors.

On the merger, ISS recommends a vote in favor noting that it followed a competitive sales process, offers a meaningful premium to the “unaffected” WBD share price – where the stock was trading before being pumped up by deal speculation — and is all cash, which “provides liquidity and certainty of value to shareholders.”

David Ellison-led Paramount is acquiring WBD for $31 a share in cash in the deal which has an enterprise value of $110 billion. It secured equity commitments for $24 billion from three Middle Eastern funds earlier this week. There’s grave concern in the industry at the merging of two major Hollywood studios. The combined company would carry a large debt load. Paramount has anticipated at least $6 billion in anticipated cost savings, meaning significant layoffs are likely.

Paramount just lost its no. 2 executive, Jeff Shell, who is resigning as president in the wake of a lawsuit by professional gambler RJ Cipriani claiming violations of securities law and breach of contract. After an investigation by an outside law firm, Paramount said the “allegations do not establish a securities law violation” but that Shell “has elected to transition from his positions as president of PSKY and a member of PSKY’s board of directors to focus on this lawsuit.”