| By Order of the Board of Directors, Tara L. Smith Senior Vice President,
Securities & Executive Compensation and Corporate Secretary March 29, 2023 | | | |  This proxy statement, our proxy card and our Annual Report on Form 10-K for the year ended December 31, 2022 were first made available to stockholders on or about March 29, 2023. If you have any questions, or need assistance in voting your shares, please call our proxy solicitor, INNISFREE M&A INCORPORATED, at 1 (877) 717-3922 (toll-free from the U.S. and Canada), or +1 (212) 750-5833 (from other locations). | |
Savalle C. Sims | Executive Vice President and General Counsel |
April 29, 2020
Table of Contents
2020 PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE 2020 ANNUAL MEETING OF STOCKHOLDERS
Q: Who is soliciting my vote?
A: Proxy Statement Summary
The Board of Directors (the “Board”) of Warner Bros. Discovery, Inc. (“us,(the “Company,” “we,” the “Company”“us,” “our” “Warner Bros. Discovery” or “Discovery”“WBD”) is furnishing this proxy statement and soliciting your voteproxies in connection with the proposals to be voted on proposals being submitted for consideration at ourthe Warner Bros. Discovery 2023 Annual Meeting of Stockholders, to be held virtually atwww.virtualshareholdermeeting.com/DISCA2020 on June 18, 2020 (the “2020or our 2023 Annual Meeting”)Meeting, and any adjournmentpostponements or postponementadjournments thereof. Q: What is the Notice of Internet Availability of Proxy Materials?
A: In accordance with the This summary highlights certain information contained in this proxy delivery rulesstatement but does not contain all of the Securities and Exchange Commission (the “SEC”), we intend to commence distribution on or about April 29, 2020 of a notice (the “Notice of Internet Availability of information you should consider when voting your shares. Please read the entire proxy statement carefully before voting.
Proxy Materials”) indicating that this Notice of 2020 Annual Meeting of Stockholders and Proxy Statement and our Annual Report onForm 10-K will be made available atwww.proxyvote.com. This website will also provide holders of our Series A and Series B common stock and SeriesA-1 convertible preferred stock (“SeriesA-1 preferred stock”) with instructions on how to vote their shares. Voting Roadmap The Notice of Internet Availability of Proxy Materials also indicates how to request printed copies of these materials, including, for holders of Series A and Series B common stock and SeriesA-1 preferred stock, the proxy card or voting instruction card.Q: What mattersfollowing proposals will be voted on at the 20202023 Annual Meeting?
A: Meeting:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proposal | For more
information | Recommendation | | | | | | | | | | | | | | | | | | | | | | | | Proposal One: Election of Directors Four Class I director nominees will be voted on at the meeting, each to serve a one-year term. The Board and the Nominating and Corporate Governance Committee believe our nominees possess the skills, experience and qualifications to effectively monitor performance, provide oversight and support management’s execution of WBD’s strategy. |
See page 14 |
The Board of Directors recommends a vote “FOR” the election of each of the nominated directors. | | | | | | | | | | | | | | | | | | Class I Director Nominees | | | | | | | Li Haslett Chen | | Kenneth W. Lowe | | Paula A. Price | | David M. Zaslav | | | | | | | | | | | | | | | | | | | | | | Proposal Two: Ratification of Appointment of Independent Registered Public Accounting Firm The Audit Committee has evaluated the performance of PricewaterhouseCoopers LLP (“PwC”) and has re-appointed them as our independent registered public accounting firm for the fiscal year ending December 31, 2023. You are requested to ratify the Audit Committee’s appointment of PwC. |
See page 40 |
The Board of Directors recommends a vote“FOR” this proposal. | | | | | | | | | | | | | | | | | | Proposal Three: Advisory Vote on 2022 Executive Compensation (“Say on Pay”) Stockholders are being asked to vote to approve, on a non-binding, advisory basis, our 2022 named executive officer compensation. The Board and the Compensation Committee believe our executive compensation program reflects our commitment to paying for performance. |
See page 79 |
The Board of Directors recommends a vote “FOR” this proposal. | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | Proposal Four: Advisory Vote on Frequency of Future “Say on Pay” Votes Stockholders are being asked to vote to approve, on a non-binding, advisory basis, the frequency at which we will conduct future “Say on Pay” votes. The options are every year, every two years, and every three years. The Board and the Compensation Committee believe that conducting a “Say on Pay” advisory vote every year will allow stockholders to provide timely, direct input on our executive compensation program. |
See page 80 |
The Board of Directors recommends a vote of “EVERY YEAR” this proposal. | | | | | | | | | | Proposal Five: Stockholder Proposal - Simple Majority Vote Vote on a stockholder proposal submitted by Kenneth Steiner. |
Page 81 | 
The Board of Directors recommends a vote “AGAINST” this proposal. | | | | | | | | | | Proposal Six: Stockholder Proposal - Political Disclosure Vote on a stockholder proposal submitted by the New York State Retirement Fund |
Page 84 |
The Board of Directors recommends a vote “AGAINST” this proposal. |
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Our Board of Directors The principal businessfollowing provides summary information about each Class I director nominee and each director whose term will extend beyond the 2023 Annual Meeting. Committee memberships, age and tenure information is shown as of May 8, 2023, the date of our 2023 Annual Meeting. Tenure is shown in years and includes prior service on the Discovery, Inc. Board of Directors, where applicable.
| | | | | | | | | | | | | | | | | | | AC | Audit Committee | CC | Compensation Committee | NCGC | Nominating and Corporate Governance Committee |
| | | | | | | | | | | | | Chair | IND | Independent | | * | Includes prior service on Discovery, Inc. Board of Directors |
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Board Snapshot The Warner Bros. Discovery Board of Directors ("Board") is comprised of 13 directors. Twelve of our 13 directors are independent, including the chair of our Board ("Board Chair"), Samuel A. Di Piazza, Jr. All members of our Audit, Compensation and Nominating and Corporate Governance Committees are independent. Our Board believes that it is essential that Board members represent diverse backgrounds and viewpoints and includes directors who bring a mix of fresh perspectives and deeper experience. Three of our 13 directors, or 23%, are female and five of our 13 directors, or 38%, are racially or ethnically diverse. In April 2022, upon the closing of the meeting willWarnerMedia Transaction, we significantly refreshed the Board with the addition of seven new independent directors. Additional details on our Board composition are as follows (age and tenure information is shown as of May 8, 2023, the date of our 2023 Annual Meeting): | | | | | | | | | | Age of Independent Directors | | Gender Diversity, Racial/Ethnic Diversity | | | | | | | | | | | Independence | | Tenure of Independent Directors | | | | | | |
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Corporate Governance Highlights The WBD Board represents and acts on behalf of WBD stockholders and is committed to sound corporate governance, as reflected through its policies and practices. The Board believes that strong corporate governance is essential to effective fulfillment of its oversight responsibilities and fiduciary duties. The Board has adopted Corporate Governance Guidelines, which provide a framework for effective governance of the Company. You can find a copy of our Corporate Governance Guidelines, along with the charters of the three standing Board committees, and our Amended and Restated Bylaws ("Bylaws") in the Investor Relations section of our corporate website at ir.wbd.com. Some highlights of WBD’s corporate governance include: | | | | | | | | Director and Committee Independence | ■12 of 13 directors are independent ■3 fully independent Board committees: Audit, Compensation, Nominating and Corporate Governance ■Independent directors meet at least twice a year in executive session | Board Accountability and Leadership | ■Annual election of directors (beginning at 2025 Annual Meeting of Stockholders) ■Independent Board Chair ■Board and Committee self-assessments | Board Refreshment and Diversity | ■Balance of new and experienced directors, with tenure of independent directors averaging 4.58 years ■Added 8 new independent directors in 2022 ■3 of 13 directors are women ■5 of 13 directors are ethnically diverse ■Average age of independent directors is 65 years | | Stockholder Rights | ■Single class of common stock with one vote per share ■No preferred shares outstanding ■No stockholder rights plan or “poison pill” ■Annual stockholder ratification of auditors and annual “Say on Pay” advisory vote | | Director Engagement | ■All directors attended at least 82% of Board and Committee meetings in 2022 ■Stockholder outreach led by Board Chair and other Committee Chairs, as appropriate ■Stockholder ability to contact directors | | Director Access | ■Significant interaction with senior business leaders through regular business reviews and Board presentations ■Directors have access to senior management and other employees ■Directors have the ability to hire outside experts and consultants as they deem necessary | | Clawback and Anti-Hedging Policies | ■Clawback policy permits the Company to recoup incentive compensation upon a material financial restatement resulting from fraud or intentional misconduct ■Insider Trading Policy prohibits all directors, officers and employees from: ■trading in any public puts, calls, covered calls or other derivative products involving Company securities; ■engaging in short sales of Company securities; and ■hedging without prior consent of our General Counsel | | Stock Ownership | ■Robust stock ownership guidelines for directors and executive officers ■CEO required to hold shares equivalent to 6x salary ■Other named executive officers are required to hold shares equivalent to 2x salary ■Directors required to hold shares equivalent to 5x the cash portion of their annual retainer within five years of first joining the Board | | |
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2022 Highlights Becoming WBD: Closing the WarnerMedia Transaction On April 8, 2022, Discovery, Inc. ("Discovery") completed its merger with the WarnerMedia business (the “WarnerMedia Business” or "WarnerMedia") of AT&T Inc. (“AT&T) and changed its name from “Discovery, Inc.” to “Warner Bros. Discovery, Inc.” The combination of Discovery and the WarnerMedia Business to create Warner Bros. Discovery is referred to in this proxy statement as the "WarnerMedia Transaction”. On April 11, 2022, the Company’s shares started trading on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbol “WBD”. Warner Bros. Discovery is a premier global media and entertainment company that combines WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading non-fiction and international entertainment and sports businesses, thus offering audiences a differentiated portfolio of content, brands and franchises across television, film, streaming and gaming. Some of our iconic brands and franchises include Warner Bros. Pictures Group, Warner Bros. Television Group, DC, HBO, HBO Max, Discovery Channel, discovery+, CNN, HGTV, Food Network, TNT, TBS, TLC, OWN, Warner Bros. Games, Batman, Superman, Wonder Woman, Harry Potter, Looney Tunes, Hanna-Barbera, Game of Thrones, and The Lord of the Rings. As of December 31, 2022, we classified our operations in three reportable segments: ■Studios, consisting primarily of the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to third parties and our networks/direct-to-consumer ("DTC") services, distribution of our films and television programs to various third party and internal television and streaming services, distribution through the home entertainment market (physical and digital), related consumer products and themed experience licensing, and interactive gaming; ■Networks, consisting primarily of our domestic and international television networks; and ■DTC, consisting primarily of our premium pay-TV and streaming services. More information on our business is available in our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K") which accompanies this proxy statement. Additional 2022 Accomplishments In addition to closing the historic WarnerMedia Transaction in just under 11 months, we had several other accomplishments during 2022, including: ■Established three strategic pillars for WBD to guide our decision making: ■Content - attract the best storytellers and use our unparalleled creative engine, franchises and brands to produce the most compelling and diverse content offering in the world; ■Distribution and Monetization - maximize the reach, engagement and overall value of our content through a broad and flexible distribution and monetization strategy; and ■One Company Mindset - operate as one company with greater accountability and collaboration across the enterprise as we aspire to be the following matters:premier media and entertainment leader globally. ■Delivered our revised Adjusted EBITDA guidance and exceeded our revised Adjusted Free Cash Flow guidance; ■Made significant progress against our integration and synergy capture goals, by breaking down divisional silos, taking significant actions to restructure the electionorganization, and realizing over $1 billion in synergies through the end of three Class III directors by the holders2022; ■Repaid a total of approximately $7 billion of debt since closing; ■Appointed exceptional leaders for all of our Series A common stockkey corporate functions and Series B common stock, voting together as a singlesecured best in class creative leadership for our content creating business and brands; ■Entered into distribution deals with several key linear and digital partners, including the electionrenewal of three preferred stock directors by the holdersaffiliate agreements representing approximately 30% of our SeriesA-1 preferred stock, voting separatelyU.S. distribution revenues and entering into an agreement with Amazon to re-launch HBO Max on Prime Video Channels in the U.S.; ■Made meaningful progress toward our goal of profitability in our DTC business; and ■Continued to produce award-winning content at Warner Bros. Television, HBO and Warner Bros. Studios, resulting in an industry-leading 48 primetime Emmy® Awards, as a class;well as 8 Golden Globe® Awards and 1 Academy Award®. More information on our business performance in 2022 is available in our 2022 Form 10-K which accompanies this proxy statement.
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Executive Compensation Executive Compensation at WBD Following the ratificationclosing of the appointmentWarnerMedia Transaction, the Compensation Committee of PricewaterhouseCoopers LLP (“PwC”the combined company (the "Committee") reviewed the compensation principles and programs of both legacy organizations - Discovery and WarnerMedia - as it looked to serve astake advantage of the opportunity to set a go-forward executive compensation program for a larger, more multifaceted organization. The Committee's goal was to develop an executive compensation program for WBD that would be competitive and relevant, while continuing to emphasize pay for performance and honoring the terms of the established employment agreements with the Company's key executives. Compensation Philosophy WBD's compensation philosophy is to pay for performance, encourage excellence, retain our independent registered public accounting firmhigh-performing executive talent across the blended organization and reward executives who deliver. | | | | | | | | | Our executive compensation programs are designed to implement our pay-for-performance compensation philosophy, as follows: ■ensure a strong alignment of the interests of our stockholders and employees; ■pay for performance, both short-term and long-term; ■pay competitively, across salary grades and geographies; and ■apply compensation policies in an internally consistent manner. |
Pay-For-Performance The Committee seeks to deliver the majority of target total direct compensation for the fiscal year ending December 31, 2020; an advisory vote to approve our 2019each named executive officer (or “NEO” as defined in the “Compensation Discussion and Analysis” which begins on page 43) in performance-based pay, with the balance between the annual cash bonus and long-term incentive awards determined by the Committee as appropriate for each role. Approximately 92% of the CEO’s 2022 target total compensation commonly referredwas performance based, and approximately 70% of the average 2022 target total compensation of our other NEOs was performance based.
Total 2022 Target Compensation Pay Mix
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2022 Stockholder Engagement In the fall of 2022, we engaged with 10 of our top 15 stockholders, representing approximately 31% of our outstanding shares. Participating in this outreach were our independent Board Chair, Mr. Di Piazza, and our Compensation Committee Chair, Mr. Gould, with support from the Company's Investor Relations and Legal Departments. During these conversations, Messrs. Di Piazza and Gould sought feedback from our stockholders regarding our compensation program, philosophies and practices, as well as ESG and corporate governance matters. Much of the feedback we received aligned with our pay for performance philosophy and supported the Committee's vision for the design of the 2023 executive compensation program, as summarized below. | | | | | | | | | | What we Heard | | What we Did | | | | ■Hold annual "Say on Pay" vote | | ■Recommending future "Say on Pay" votes be held every year. See Proposal Four on page 80 | | | | ■Better align pay and performance | | ■Resumed use of Performance-Based Restricted Stock Units ("PRSUs") and stock options in 2023 long-term incentive ("LTI") compensation program for NEOs (other than the CEO) ■In response to our stock price performance in 2022 and the strong focus on free cash flow and leverage reduction, the Committee chose not to fund a performance pool to provide additional cash bonuses or award an above-target bonus to the CEO despite strong individual performance by the CEO and the other NEOs | | | | ■Better align executive compensation with stock price | | ■Added a total stockholder return ("TSR")-modifier to 2023 PRSU awards for NEOs (other than the CEO) | | | | ■Utilize longer performance periods for equity compensation | | ■Set three-year performance period for 2023 PRSU TSR-modifier | | | | ■Don't repeat metrics in different portions of the executive compensation program | | ■Differentiated metrics used for 2023 annual bonus program (revenue, EBITDA, DTC subscribers) and the 2023 LTI program (adjusted free cash flow and total stockholder return) | | | | ■Focus Company leadership on reducing leverage | | ■Utilizing adjusted free cash flow as a financial metric in the 2023 LTI program ■Awarded special PRSUs to the NEOs and certain other executives to further incentivize achievement of the Company's free cash flow objectives | | | | ■Provide a rationale for the Committee's compensation decisions | | ■Enhanced our CD&A disclosures to place greater focus on the Committee's decision-making |
See "Looking Ahead: 2023 Executive Compensation Program" on page 63 for additional details on changes the Committee is implementing for the 2023 executive compensation program.
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2022 Executive Compensation Payouts The Committee sets annual financial metrics that are used to determine the cash bonuses awarded to NEOs, either under our annual Incentive Compensation Program ("ICP") or the separate bonus program for the CEO and CFO. The ICP payout is calculated based solely on performance against these financial measures, and the annual cash bonuses for the CEO and CFO are based 50% on performance against these financial measures, and 50% on additional strategic goals established by the Committee for each of the CEO and CFO. The 2022 financial metrics were based on: ■Net Revenue; ■Adjusted Free Cash Flow; ■Adjusted EBITDA; and ■Year-End Paid DTC Subscribers (each as defined below on page 52). At the beginning of 2022 when the Discovery Compensation Committee met to consider the metrics it would use to measure 2022 performance, it was cognizant that the WarnerMedia Transaction was likely to close in the first half of the year. Therefore, in February 2022, the Discovery Compensation Committee established fiscal 2022 performance metrics for the ICP and cash bonuses to the CEO and CFO, as well as the CEO's PRSU awards granted on March 1, 2022, that were based on standalone Discovery, Inc. performance, but it reserved the right for the WBD Compensation Committee to adjust those metrics following the closing of the WarnerMedia Transaction, if appropriate. The WarnerMedia Transaction closed on April 8, 2022. Following the closing of the WarnerMedia Transaction, the WBD Compensation Committee determined it was appropriate to do the following: ■Use the standalone Discovery metrics adopted in February 2022 to assess the first-half of 2022 (January 1, 2022 through June 30, 2022) performance of those portions of the WBD business and those executives and employees that were historically a “Saypart of Discovery. ■Use the metrics established prior to closing by WarnerMedia for its 2022 bonus program that were based on Pay” vote;standalone WarnerMedia performance to assess the first-half of 2022 (January 1, 2022 through June 30, 2022) performance of those portions of the WBD business and those executives and employees that were historically a part of WarnerMedia. ■Adopt metrics in June 2022 for a combined WBD for the considerationsecond-half of 2022 (July 1, 2022 through December 31, 2022) and measure second-half performance against the combined WBD metrics. ■Calculate a combined or "blended" score for ICP, CEO and CFO cash bonuses and the CEO's 2022 PRSU awards based on the first-half performance of Discovery or WarnerMedia, as applicable, and the second-half performance of WBD. The Committee also adjusted fiscal 2022 performance, where appropriate, for unplanned events and unforeseen changes over which management had little or no influence. Additional information regarding the adjustments that were made to 2022 performance appears on page 53. When determining compensation payouts for 2022 performance, the Committee considered that 2022 was an extraordinarily complex year which included the closing of a stockholder proposal regarding simple majority vote, if properly presented. We will also transact such other businesstransformational acquisition, extensive post-closing adjustments and integration activities, and a challenging macroeconomic environment with considerable pressure on the media and entertainment industry. In spite of these complexities, the Committee believed our CEO and NEOs delivered outstanding performance in 2022, as may properly be presented at the 2020 Annual Meeting or at any postponements or adjournments thereof. However, we are not aware of any other matters to be acted upon at the 2020 Annual Meeting.
Q: Who is entitled to vote at the 2020 Annual Meeting?
A: The close of business on April 20, 2020 was the record date for determining the holdersevidenced by WBD's delivery of our Series Aexternal guidance and Series B common stockperformance against the financial and SeriesA-1 preferred stock entitled to notice of, and to vote at, the 2020 Annual Meeting and any postponement or adjournment thereof. The Notice of Internet Availability of Proxy Materials receivedstrategic metrics established by the holders ofCommittee for 2022 cash bonus awards and LTI awards. The Committee believes the 2022 compensation to our Series ACEO and Series B common stockNEOs is commensurate with WBD's performance, recognizes their exceptional leadership during a challenging year and SeriesA-1 preferred stock will explain how they may vote their shares. Holders ofis aligned with ournon-voting Series C common stock pay-for-performance philosophy.
Taking into account the adjustments noted above and SeriesC-1 convertible preferred stock (“SeriesC-1 preferred stock”) may access and receivefurther described in this proxy statement, the financial performance of each of Discovery and related materials butWarnerMedia during the first half of 2022, the performance of WBD during the second half of 2022, and the individual performance of the CEO and NEOs during 2022, the Committee took the following actions: ■approved 2022 cash bonuses for the CEO at 99.2% of target and for the CFO at 99.2% of target, based on first-half Discovery performance and second-half WBD performance, and the Committee's assessment of the CEO's and CFO's individual performance versus the financial and strategic objectives the Committee established for each executive; ■funded corporate ICP at 95.6% of target for those NEOs who worked for Discovery prior to the closing of the WarnerMedia Transaction and at 90.2% of target for those NEOs who worked for WarnerMedia prior to the closing of the WarnerMedia Transaction, based on first-half Discovery or WarnerMedia performance, as applicable, and second-half WBD performance; ■certified the vesting at 98.4% for the CEO’s PRSUs with a performance period that ended in 2022, based on first-half Discovery performance, second-half WBD performance, and the Committee's assessment of the CEO's performance versus the strategic objectives established by the Discovery Compensation Committee for his PRSUs. See “NEO Compensation in 2022” beginning on page 50 for additional information.
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| | | | | | | | | | | | Proposal 1 Election of Directors | | | The Warner Bros. Discovery, Inc. Board of Directors recommends a vote “FOR” the election of the nominated directors. |
Our Board of Directors Our Board has general oversight responsibility for the Company’s affairs pursuant to the Delaware General Corporation Law and the Company’s Second Restated Certificate of Incorporation and Bylaws. In exercising its fiduciary duties, the Board represents and acts on behalf of the Company’s stockholders and is committed to strong corporate governance, as reflected through its policies and practices. The Board is deeply involved in the Company’s strategic planning process, leadership development, succession planning, and oversight of risk management. Director Skills, Experience and Diversity Matrix The WBD Board is comprised of highly skilled directors who bring a diverse range of skills and experiences to the Board's oversight role. The following table summarizes the key skills and experiences of each director nominee and each director whose term extends beyond the 2023 Annual Meeting. Further details about each individual's experiences and qualifications are not entitledset forth in their individual biographies.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SKILLS AND EXPERIENCE | | | | | | | | | | | | | | | | | Executive Management Experience | | | | | | | | | | | | | | | Media/Entertainment/
Telecommunications Industry Experience | | | | | | | | | | | | | | | Technology/Cybersecurity Experience | | | | | | | | | | | | | | | Financial/Accounting Experience | | | | | | | | | | | | | | | Risk Management Experience | | | | | | | | | | | | | | | International/Global Business Operations Experience | | | | | | | | | | | | | | | Regulatory/Government Experience | | | | | | | | | | | | | | | Outside Public Company Board Experience | | | | | | | | | | | | | | | BACKGROUND | | Tenure/Age/Gender | | Years on the Board* | 1 | 1 | 1 | 14 | 1 | 5 | 14 | 1 | 14 | 1 | 1 | 1 | 14 | | Age* | 35 | 72 | 74 | 77 | 68 | 73 | 82 | 50 | 57 | 66 | 61 | 64 | 63 | | Gender | F | M | M | M | F | M | M | M | M | M | F | M | M | | Race/Ethnicity | | Black or African American | | | | | | | | | | | | | | | Asian | | | | | | | | | | | | | | | White | | | | | | | | | | | | | |
* Age/tenure as of May 8, 2023, tenure includes prior service on Discovery, Inc. Board F=Female, M=Male Please also see Nasdaq Board Diversity Matrix in Appendix A
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Skills and Experience Definitions | | | | | | | | | | | | | | | | | | | | | | | | | Executive Management Experience Experience as an executive member of corporate management | | | | Risk Management Experience Experience assessing risk and reviewing measures to address and mitigate risks | | | | | | | | | | | | | | Media, Entertainment, and Telecommunications Industry Experience Prior experience working as an executive or serving on the board of a sophisticated media, entertainment or telecommunications company | | | | International/Global Business Operations Experience Experience working in global markets and understanding the nuances of international business environments | | | | | | | | | | | | | | Technology/Cybersecurity Experience Experience in a technology-related business and/or an acute understanding of emerging technology trends; experience in the development of technology and processes that protect the storage of information and maintain confidentiality | | | | Regulatory/Government Experience Experience working in a governmental or regulatory agency, or leading an organization in a highly-regulated industry | | | | | | | | | | | | | | Financial/Accounting Experience High-level expertise in finance and accounting, such as those who have experience as an operating executive with responsibility for all or a portion of a company’s financial reporting, in the financial sector or private equity or as an audit committee member for publicly traded companies, or have an educational background or training in accounting or finance | | | | Outside Public Company Board Experience Experience serving on an external public company board | | | | | | |
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Nominees for Election Our current Board structure was established in connection with the WarnerMedia Transaction. The WBD Board currently consists of 13 directors: six directors designated by Discovery (“Discovery Designees”), including David M. Zaslav, our President and Chief Executive Officer, and seven directors designated by AT&T (“AT&T Designees”), including Samuel A. Di Piazza, Jr., our independent Board Chair. The WBD Board is currently classified into three classes as noted below: | | | | | | | | | | | | | | | Class I Directors
(Initial Term Expires at 2023 Annual Meeting | | Class II Directors
(Initial Term Expires at 2024 Annual Meeting) | | Class III Directors
(Initial Term Expires at 2025 Annual Meeting) | Li Haslett Chen(A) | | Richard Fisher(A) | | Samuel A. Di Piazza, Jr.(A) | Kenneth W. Lowe(D)* | | Paul A. Gould(D) | | Debra L. Lee(A) | Paula A. Price(A) | | John C. Malone(D) | | Steven A. Miron(D) | David M. Zaslav(D) | | Fazal Merchant(A) | | Steven O. Newhouse(D) | | | | | Geoffrey Y. Yang(A) |
(A)=AT&T Designee
(D)=Discovery Designee
* On January 4, 2023, Robert R. Bennett notified the WBD Board of his decision to voteresign from the Board, effective as of April 1, 2023. On January 17, 2023, in accordance with the procedures set forth in our Second Restated Certificate of Incorporation, Kenneth W. Lowe was appointed to fill the vacancy created by Mr. Bennett’s resignation, effective as of April 2, 2023. Mr. Lowe will serve as a Class I director and will stand for election at the 20202023 Annual Meeting or any postponement or adjournment thereof.. Q: How many shares can voteThe initial term of the Class I directors will expire at the 20202023 Annual Meeting, and how many votes does each share have?
A: Asthe initial term of April 20, 2020, we had outstanding 160,019,717 shares of Series A common stock, with each of those shares being entitled to one vote, 6,512,378 shares of Series B common stock, with each of those shares being entitled to ten votes, and 340,161,506 shares of Series C common stock, which are not entitled to vote. We also had outstanding 7,852,582 and four-ninths (4/9ths) shares of SeriesA-1 preferred stock, with each of those shares being entitled to nine votes on all matters to be voted onthe Class II directors will expire at the 20202024 Annual Meeting other than the election of directors, which is equal to the number of votes the holder of the SeriesA-1 preferred stock would have been entitled to cast had it converted its shares of SeriesA-1 preferred stock into shares of Series A common stock on the record date, and 4,881,390 andone-half (1/2) shares of SeriesC-1 preferred stock, which are not entitled to vote.
Q: How many shares must be present or represented at the 2020 Annual Meeting to conduct business at the meeting?
A: With respect to Proposal 1, the presence, in person or by properly executed proxy, of the holders of a majority of the total voting power of the outstanding shares of (a) the Series A common stock and Series B common stock, voting together as a single class, entitled to a separate vote on the election of three Class III directors at the 2020 Annual Meeting will constitute a quorum for purposes of this class vote and (b) theSeries A-1 preferred stock entitled to a separate class vote on three preferred stock directors at the 2020 Annual Meeting will constitute a quorum for purposes of this class vote. The presence, in person or by properly executed proxy, of the holders of a majority in voting power of the Series A common stock, Series B common stock and SeriesA-1 preferred stock, with the preferred stock considered on anas-converted to common stock basis, voting together as a single class, will constitute a quorum for the combined class votes on Proposals 2 through 4.
If a quorum is not present, the meeting will be adjourned until a quorum is obtained. Shares present virtually during the annual meeting will be considered shares represented in person at the meeting for purposes of determining the presence of a quorum. Abstentions and brokernon-votes (where a broker or nominee does not exercise discretionary authority to vote on a proposal) will be treated as present for purposes of determining the presence of a quorum.
Q: What vote is required to elect directors?
A: With respect to Proposal 1, the three Class III directors are to be elected by the holders of our Series A common stock and Series B common stock, voting together as a single class,Stockholders, and the three preferred stock directors are to be elected byinitial term of the holder of our SeriesA-1 preferred stock, voting separately as a class. The Class III directors will be elected if they receive a pluralityexpire at the 2025 Annual Meeting of Stockholders. Upon the expiration of the combined voting powerinitial term of each class of directors, such class of directors, if renominated by the Board, will stand for election by our stockholders for a one-year term and, if elected by stockholders, will hold office until the earliest to occur of their respective death, resignation, removal or disqualification or the election and qualification of their respective successors. At our 2025 Annual Meeting of Stockholders, all directors will stand for election for a one-year term and the current classified nature of the outstanding sharesWBD Board will sunset.
The Class I directors who are being nominated for re-election at the 2023 Annual Meeting for a one-year term that will expire at the 2024 Annual Meeting of Series A common stock and Series B common stock present virtually or by proxy and entitled to vote on the election of directors, voting together as single class. The SeriesA-1 preferred stock directors will be elected if they receive the written consent or the affirmative vote of the holder of a majority of the outstanding shares of the SeriesA-1 preferred stock.If you withhold your vote, it will have no effect on the election of directors; and
Brokernon-votes are not considered shares entitled to vote and therefore will have no effect on the election of directors.
Q: What vote is required to ratify the appointment of the independent registered public accounting firm?
A: The affirmative vote of a majority of the combined voting power of the outstanding Series A common stock, Series B common stock and SeriesA-1 preferred stock, voting as a single class, present virtually or by proxy and entitled to vote, is required to ratify Proposal 2.
Abstentions will have the same effect as a vote “AGAINST” this proposal; and
If you are a street name stockholder and do not vote your shares, your bank, broker or other holder of record can vote your shares at its discretion on this item.
Q: What vote is required with regard to the Say on Pay vote?
A: Stockholders are being asked to vote to approveLi Haslett Chen, Kenneth W. Lowe, Paula A. Price and David M. Zaslav. Unless otherwise instructed on anon-binding advisory vote basis our 2019 named executive officer compensation. The affirmative vote of a majority of the outstanding Series A common stock, Series B common stock and SeriesA-1 preferred stock, voting as a single class, present virtually or by proxy and entitled to vote, is required to approve Proposal 3.
Abstentions will have the same effect as a vote “AGAINST” this proposal; and
Brokernon-votes are not considered shares entitled to vote and therefore will have no effect on the advisory vote on Proposal 3.
Q: What vote is required to approve the stockholder proposal?
A: If properly presented at the 2020 Annual Meeting, the affirmative vote of a majority of the combined voting power of the outstanding Series A common stock, Series B common stock and SeriesA-1 preferred stock, voting as a single class, present virtually or by proxy and entitled to vote, is required to approve the stockholder proposal.
Abstentions will have the same effect as a vote “AGAINST” the proposal; and
Brokernon-votes are not considered shares entitled to vote and therefore will have no effect on the outcome of the stockholder proposal.
Q: How can I vote my shares at the 2020 Annual Meeting?
A: If you are a holder of Series A or Series B common stock or SeriesA-1 preferred stock as of the record date, telephone and Internet voting is available 24 hours a day through 11:59 p.m. (Eastern Time) on June 17, 2020. If you are located in the United States or Canada and are a stockholder of record as of the record date, you can vote your shares by calling toll-free1-800-690-6903. Whether you are a stockholder of record or a beneficial owner, you can also vote your shares on the Internet atwww.proxyvote.com.
Both the telephone and Internet voting systems haveeasy-to-follow instructions on how you may vote your shares and allow you to confirm that the system has properly recorded your vote. If you are voting your shares by telephone or Internet, you should have on hand when you call or access the website, as applicable, the Notice of Internet Availability of Proxy Materials, the proxy card, or voting instruction card (for those holders who have received,the persons named as proxies will vote the shares represented by request, a hard copyeach properly executed proxy “FOR” the election as directors of the persons named in this proxy card or voting instruction card). If you vote by telephone or Internet, you do not need to return your proxy card to us.
If you have received, by request, a hard copystatement as nominees. Each of the proxy cardnominees has consented to serve if elected. However, if any of the persons nominated by the Board fails to stand for election, or voting instruction card and wishdeclines to submit your proxy by mail, you must complete, sign and date the proxy card or voting instruction card and return it in the envelope provided so that it is received prior to the 2020 Annual Meeting.
Properly completedaccept election, proxies will be voted by the proxy holders for the election of such other person or persons as you direct. Properly executed proxies that do not contain voting instructions will be voted “FOR” Proposals 1, 2the Board may recommend.
The following tables present information, including age, term of office, committee memberships, independence, business experience, qualifications, education, and 3 and “AGAINST” Proposal 4.While we encourage holders of Series A and Series B common stock and SeriesA-1 preferred stock to vote by proxy, you also haveother public company directorships held in the option of voting your shares of Series A and Series B common stock and SeriesA-1 preferred stockpast five years, for each person nominated for election as a director at the 2020 Annual Meeting. All holders of Series A or Series B common stock or Series A-1 preferred stock, whether your shares are registered directly in your name with our transfer agent or held in a
brokerage account by a bank or other nominee, may virtually attend the 20202023 Annual Meeting and vote online, subject to compliance withfor those directors whose terms of office will continue after the procedures described below. In order to vote online at the 20202023 Annual Meeting, you will need the control number on your proxy cardMeeting. Each member of our Board and each director nominee possesses skills and experience which makes him or voting instruction form, as further described below.
Q: If my Discovery shares are held in “street name” by a broker, bank or other nominee, will the broker, bank or other nominee vote my shares on eachher an important component of the annual business proposals?
A: If you hold your shares in street name and do not give instructions to your broker, bank or other nominee, the broker, bank or other nominee will be able to vote your shares with respect to “discretionary items” but will not be able to vote your shares with respect to“non-discretionary items,” in which case your shares will be treatedBoard as “brokernon-votes” with respect to those items. “Brokernon-votes” are shares that are held in street name by a bank, broker or other nominee that indicates on its proxy that it does not have discretionary authority to vote on a particular matter. The auditor ratification proposal (Proposal 2) is a “discretionary item,” whereas the election of directors, (Proposal 1) the advisory vote on named executive officer compensation (Proposal 3) and the stockholder proposal (Proposal 4) are“non-discretionary items.” Accordingly, if you hold your shares in street name and do not provide voting instructions to your broker, bank or other nominee, your shares may, in the discretionwhole. While consideration of the broker, bankinformation presented below regarding each director’s and director nominee’s specific experience, qualifications, attributes and skills led our Board to the conclusion that he or other nominee, be voted only on the auditor ratification proposal.If you hold your shares in street name and do not provide voting instructions to your broker, bank or other nominee, your shares will NOT be voted on Proposals 1, 3 or 4.
Q: May I change or revoke my vote after returningshe should serve as a proxy card or voting by telephone or over the Internet?
A: Yes.Before your proxy is voted at the 2020 Annual Meeting, you may change or revoke your vote on the proposals by telephone or over the Internet (if you originally voted by telephone or over the Internet), by virtually attending the 2020 Annual Meeting and voting online during the meeting, or by delivering a signed proxy revocation or a new signed proxy with a later date to: Discovery, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Any signed proxy revocation or new signed proxy card must be received before the start of the 2020 Annual Meeting. Your virtual attendance at the 2020 Annual Meeting will not, by itself, revoke your proxy.
If your shares are held in an account by a broker, bank or other nominee whom you previously contacted with voting instructions, you should contact your broker, bank or other nominee to change your vote.
Q: How do I virtually attend the 2020 Annual Meeting?
A: We will host the 2020 Annual Meeting live online via webcast. You may attend the 2020 Annual Meeting live online by visitingwww.virtualshareholdermeeting.com/DISCA2020. The webcast will start at 10:00 a.m., Eastern Time, on Thursday, June 18, 2020. You will need the control number included on your proxy card or voting instruction form in order to be able to vote or ask questions during the 2020 Annual Meeting. Instructions on how to attend and participate online are posted atwww.virtualshareholdermeeting.com/DISCA2020. Onlinecheck-in will begin at 9:30 a.m., Eastern Time, on Thursday, June 18, 2020, and you should allow ample time for the onlinecheck-in proceedings. We will have technicians standing by and ready to assist you with any technical difficulties you may have accessing the virtual meeting starting at 9:30 a.m., Eastern Time on Thursday, June 18, 2020. If you encounter any difficulties accessing the virtual meeting during thecheck-in or meeting time, please call the technical support numberdirector, we also believe that will be posted on the 2020 Annual Meetinglog-in page.
Q: Why is the 2020 Annual Meeting a virtual, online meeting?
A: To support the health and well-beingall of our stockholders, employeesdirectors and director nominees have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to Warner Bros. Discovery and our Board. There is no family relationship among any of WBD's executive officers or directors, in light of the recent novel coronavirus(“COVID-19”) pandemic, our 2020by blood, marriage or adoption.
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Director Nominees for Election at 2023 Annual Meeting will be a virtual meeting of stockholders where stockholders will participate by accessing a website using
| | | | | | | | | Li Haslett Chen Independent Director | | | | | | | Age: 35 Director Since: 2022 Class I Director Committee Memberships ■Nominating and Corporate Governance Committee | Other Public Company Directorships
(past five years): ■None Education ■Columbia University, BA | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | Li Haslett Chen is the founder and CEO of Howl (formerly Narrativ), a new marketplace where creators are rewarded for honest reviews. Howl provides the foundation for creators of all sizes to sell products, manage transactions, and tap into new opportunities to grow. Under her leadership, Howl has been named one of Fast Company’s Most Innovative Companies and one of the Most Promising AI Companies by Forbes. Prior to founding Narrativ, Ms. Chen was a management consultant at McKinsey & Co. Ms. Chen has been recognized as a Retail Disruptor by the Financial Times, a World Economic Forum Technology Pioneer, and included on Ad Age’s 40-Under-40. | Ms. Chen is skilled in digital interactions in the content and e-commerce spaces, as well as in technology and product development. She also brings significant experience with direct-to-consumer platforms to the WBD Board. |
| | | | | | | | | Kenneth W. LoweIndependent Director | | | | | | | Age: 73 Director Since: 2008-2022; 2023 Class I Director Committee Memberships ■Audit Committee (effective as of April 2, 2023) ■Compensation Committee (effective as of April 2, 2023) | Other Public Company Directorships
(past five years): ■None Education: ■University of North Carolina at Chapel Hill, BA | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | Kenneth W. Lowe served as Chairman, President and Chief Executive Officer of Scripps Networks Interactive, Inc. (“Scripps Networks”) from 2008 until 2018, when Scripps Networks merged with Discovery, Inc. From 2000-2008, Mr. Lowe served as President and Chief Executive Officer of The E.W. Scripps Company. Prior to 2000, Mr. Lowe was Chairman and CEO of Scripps Networks. | Through his experience as a media executive and his extensive experience with Scripps Networks, Mr. Lowe has developed a deep understanding of our industry. Mr. Lowe has a proven track record of building content and lifestyle brands as well as integrating and growing global media companies. Mr. Lowe’s expertise in the media industry, experience as a public company executive, and prior experience on the Discovery board during a period of transformation following the Scripps Networks acquisition makes him a valued addition to the WBD Board. |
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| | | | | | | | | Paula A. Price Independent Director | | | | | | | Age: 61 Director Since: 2022 Class I Director Committee Memberships ■Audit Committee (Chair) | Other Public Company Directorships
(past five years): ■Bristol Myers Squibb (2020 - present) ■Accenture plc (2014 - present) ■DaVita Inc. (2020 to 2022) ■Western Digital Corporation (2014 to 2019, 2020 to 2022) Education ■DePaul University, BS ■University of Chicago, MBA | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | From July 2018 through May 2020, Paula A. Price was the executive vice president and chief financial officer of Macy’s, Inc., an omni-channel retailer of apparel, accessories and other goods, and she continued to serve as its strategic advisor until November 2020. From 2014 to 2018, she was a full-time senior lecturer at Harvard Business School. Prior to joining the faculty of Harvard Business School, she was executive vice president and chief financial officer of Ahold USA, a U.S. grocery retailer, which she joined in 2009. Prior to joining Ahold USA, Ms. Price was senior vice president, controller and chief accounting officer at CVS Caremark. Earlier in her career, Ms. Price was the chief financial officer of the Institutional Trust Services division of JPMorgan Chase & Co. and also held senior management positions at Prudential Insurance Co. of America, Diageo and Kraft Foods. A certified public accountant, she began her career at Arthur Andersen & Co. | Ms. Price brings to the WBD Board broad experience across finance, general management and strategy gained from her service in senior executive and management positions at major corporations across several industries, including, in particular, the retail, financial services and consumer packaged goods industries. She brings to the Board an important perspective from her experience as a chief financial officer, a member of the faculty of Harvard Business School and from her service as a director of other public company boards. The Board also benefits from her extensive background and expertise in finance and accounting matters. |
| | | | | | | | | David M. Zaslav President and Chief Executive Officer of Warner Bros. Discovery, Inc. | | | | | | Age: 63 Director Since: 2008 Class I Director Committee Memberships ■None | Other Public Company Directorships
(past five years): ■Grupo Televisa S.A.B. (2015-present) ■Sirius XM Radio, Inc. (2013-present) ■Lions Gate Entertainment Corp. (2015-2021) Education: ■Binghamton University, BS ■Boston University School of Law, JD | |
| | | | | | Professional Experience David M. Zaslav has served as our President and Chief Executive Officer since the closing of the WarnerMedia Transaction on April 8, 2022. Prior to the closing, Mr. Zaslav served as Discovery, Inc.’s President and Chief Executive Officer from January 2007 until April 2022. Previously, Mr. Zaslav served as President, Cable & Domestic Television and New Media Distribution of NBC Universal, Inc. (“NBC”), a media and entertainment company, from May 2006 to December 2006. Mr. Zaslav served as Executive Vice President of NBC, and President of NBC Cable, a division of NBC, from 1999 to May 2006. | Qualifications and Expertise Provided to Our Board As Chief Executive Officer, Mr. Zaslav sets our goals and strategies and oversees all global operations for WBD. Under his leadership, Discovery, Inc. grew into a Fortune 500 public company with world-class brands and networks. Mr. Zaslav conceived, initiated and led the negotiation, signing and closing of the transformational WarnerMedia Transaction to create Warner Bros. Discovery. His ability as director to add his views and insights, which are focused on strategic growth and operational efficiency, to our Board’s deliberations is of significant benefit to our Board. | | |
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Directors with Terms Extending Beyond
the Internet. There will not be a physical meeting location. In light of the public health and safety concerns related toCOVID-19, we believe that hosting a virtual meeting will facilitate stockholder attendance and participation at our 20202023 Annual Meeting by enabling stockholders to participate remotely from any location around the world. Our virtual meeting will be governed by our Rules of Conduct of Meeting which will be posted atwww.virtualshareholdermeeting.com/DISCA2020 Class II Directors with Terms Expiring in advance of the meeting. We have designed the virtual annual meeting to provide the same rights and opportunities to participate as stockholders would have at anin-person meeting, including the right to vote and ask questions through the virtual meeting platform.Q: How do I submit a question at the 2020 Annual Meeting?
A: Stockholders may submit questions at the 2020 Annual Meeting by using the virtual meeting platform atwww.virtualshareholdermeeting.com/DISCA2020. Once you have logged into the site using your control number, you will be able to submit questions electronically via the virtual meeting platform.
Q: Who will bear the cost of soliciting votes for the 2020 Annual Meeting?
A: We will pay the cost of solicitation of proxies, including the preparation, website posting, printing and delivery of the Notice of Internet Availability of Proxy Materials, proxy statement and related materials. We will furnish copies of these materials to banks, brokers, fiduciaries, custodians and other nominees that hold shares on behalf of beneficial owners so that they may forward the materials to beneficial owners.
2024 CORPORATE GOVERNANCE
| | | | | | | | | Richard W. Fisher Independent Director | | | | | | | Age: 74 Director Since: 2022 Class II Director Committee Memberships ■Compensation Committee | Other Public Company Directorships
(past five years): ■Tenet Healthcare Corporation (2017-present) ■ AT&T Inc. (2015-2021) ■PepsiCo, Inc. (2015-2021) Education: ■Harvard University, BA ■Stanford University, MBA | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | Richard W. Fisher served as President and Chief Executive Officer of the Federal Reserve Bank of Dallas from 2005 until March 2015. He has been Senior Advisor to Barclays PLC since 2015. From 2001 to 2005, Mr. Fisher was Vice Chairman and Managing Partner of Kissinger McLarty Associates. From 1997 to 2001, Mr. Fisher served as Deputy U.S. Trade Representative with the rank of Ambassador. Previously, he served as Managing Partner of Fisher Capital Management and Fisher Ewing Partners LP (investment advisory firms) and prior to that was Senior Manager of Brown Brothers Harriman & Co. | Mr. Fisher has extensive knowledge of financial matters and expertise in international markets, trade and regulatory frameworks. He brings to our Board strategy, leadership and risk oversight experience, including his prior experience chairing a Federal Reserve committee on information technology architecture and cybersecurity risks for five years. |
| | | | | | | | | Paul A. Gould Independent Director | | | | | | | Age: 77 Director Since: 2008 Class II Director Committee Memberships ■Compensation Committee (Chair) ■Nominating and Corporate Governance Committee | Other Public Company Directorships
(past five years): ■Radius Global Infrastructure, Inc. (2020-present) ■Liberty Latin America, Ltd. (2017-present) ■Liberty Global plc (2005-present) ■Ampco-Pittsburgh Corp. (2002-2018) Education: ■Farleigh Dickinson University, BA | |
| | | | | | Professional Experience Paul A. Gould served as a director of Discovery Holding Company from 2005 to 2008 when it merged with Discovery, Inc. Mr. Gould has served at Allen & Company Incorporated, an investment banking services company, since 1972, including as a Managing Director and Executive Vice President for more than the last five years. He is also a member of an International Monetary Fund advisory committee, and a long-serving board member of the Wildlife Conservation Society, where he has chaired the investment committee since 2017. Mr. Gould has served as a financial advisor to many Fortune 500 corporations and advised on a number of large media company acquisitions. | Qualifications and Expertise Provided to Our Board Mr. Gould brings to our Board a wealth of experience in matters relating to public company finance and mergers and acquisitions, particularly in the media and entertainment industries. Mr. Gould’s knowledge of our Company and our industry, combined with his expertise in finance, makes him an important part of our Board. | | |
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| | | | | | | | | John C. Malone Independent Director | | | | | | | Age: 82 Director Since: 2008 Class II Director Committee Memberships ■Nominating and Corporate Governance Committee (Chair) | Other Public Company Directorships
(past five years): ■Liberty Broadband Corporation (2014-present) ■Liberty Media Corporation (including its predecessors) (2010-present) ■Liberty Global plc (including its predecessors) (2005-present) ■Qurate Retail, Inc. (including its predecessors) (1994-present) ■GCI Liberty, Inc. (2018-2020) ■Liberty Expedia Holdings, Inc. (2016-2019) ■Liberty Latin America, Ltd. (2017-2019) Education: ■Yale University, BS ■Johns Hopkins University, MA, Ph.D. | |
| | | | | | Professional Experience John C. Malone served as Chief Executive Officer and Chairman of the Board of Discovery Holding Company from 2005 to 2008, when it merged with Discovery, Inc. Mr. Malone is currently chairman of the boards of Liberty Media Corporation, Liberty Broadband Corporation and Liberty Global plc. His extensive experience includes serving as chief executive officer of Telecommunications Inc. for over 25 years until its merger with AT&T Corporation in 1999. | Qualifications and Expertise Provided to Our Board Mr. Malone has played a pivotal role in the cable television industry since its inception and is considered one of the preeminent figures in the media and telecommunications industry. Mr. Malone brings to our Board his well-known sophisticated problem solving and risk assessment skills. His breadth of industry knowledge and unique perspective on our business make him an invaluable member of our Board. He also brings extensive experience serving on other public company boards and boards of non-profit organizations within the cable industry, including Cable Television Laboratories, Inc. and the National Cable Television Association. | | |
| | | | | | | | | Fazal Merchant Independent Director | | | | | | | Age: 50 Director Since: 2022 Class II Director Committee Memberships ■Audit Committee ■Nominating and Corporate Governance Committee | Other Public Company Directorships
(past five years): ■Meritor, Inc. (2020-present) ■Ryman Hospitality Properties, Inc. (2017-present) Education ■University of Texas at Austin, B.A. ■Indiana University, MBA | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | Fazal Merchant is currently a Senior Advisor to Sixth Street Partners and various media and technology related endeavors, and a member of the board of directors at Ariel Investments. He retired in 2020 as Co-CEO of Tanium Inc., a subscription-based global cyber-security and IT management company, which he joined in 2017 as COO & CFO and was appointed Co-CEO in June 2019. Mr. Merchant also served on the board of Tanium from June 2019 until February 2022. Prior to joining Tanium, Mr. Merchant was CFO of DreamWorks Animation SKG (2014-2016) and he served in several executive roles at DirecTV, including SVP Corporate Development, Corporate Treasurer, and CFO of Latin America (2012-2014). Earlier in his career, Mr. Merchant spent over 8 years in investment banking at Barclays Capital and RBS, and he began his career at Ford Motor Company. | Mr. Merchant brings extensive business experience in senior leadership positions with involvement in and oversight of technology, strategy, financial reporting and controls, marketing, sales and treasury operations. In addition, Mr. Merchant’s experience as Chief Financial Officer of multiple companies, provides our Board with extensive financial acumen and experience. Mr. Merchant also brings valuable experience with respect to technology and cybersecurity matters. |
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Class III Directors with Terms Expiring in 2025 | | | | | | | | | Samuel A. Di Piazza, Jr. Independent Board Chair | | | | | | | Age: 72 Director Since: 2022 Class III Director Committee Memberships ■Audit Committee (effective as of April 2, 2023) | Other Public Company Directorships
(past five years): ■Regions Financial Corporation (2016-present) ■Jones Lang LaSalle Incorporated (2015-present) ■ProAssurance Corporation (2014-present) ■AT&T Inc. (2015-2022) Education: ■University of Alabama, BS ■University of Houston, MS | | | | |
| | | | | | Professional Experience Samuel A. Di Piazza, Jr. served as Global Chief Executive Officer of PricewaterhouseCoopers International Limited from 2002 until his retirement in 2009. Mr. Di Piazza began his 36-year career with PricewaterhouseCoopers (PwC, formerly Coopers & Lybrand) in 1973 and was named Partner in 1979 and Senior Partner in 2000. From 1979 to 2002, Mr. Di Piazza held various regional leadership positions with PwC. After his retirement from PwC, Mr. Di Piazza joined Citigroup where he served as Vice Chairman of the Global Corporate and Investment Bank from 2011 until 2014. | Qualifications and Expertise Provided to Our Board Mr. Di Piazza brings significant executive and business leadership to our Board through his management of a multicultural, complex professional services organization serving clients around the world. He has significant global accounting, cyber and financial experience, and extensive knowledge of the entertainment business, including from his prior service on the boards of DirecTV and AT&T. | | |
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| | | | | | | | | Debra L. Lee Independent Director | | | | | | | Age: 68 Director Since: 2022 Class III Director Committee Memberships ■Nominating and Corporate Governance Committee | Other Public Company Directorships (past five years): ■The Procter & Gamble Company (2020-present) ■Burberry Group plc (2019-present) ■Marriott International, Inc. (2004-present) ■AT&T Inc. (2019 - 2022) ■Twitter, Inc. (2016-2019) Education: ■Brown University, BA ■Harvard University - Kennedy School of Government, MA ■Harvard University School of Law, JD | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | Debra L. Lee is Chair of Leading Women Defined Foundation (a nonprofit education and advocacy organization in Los Angeles, California), which she founded in 2009. She has served in this capacity since June 2018. Ms. Lee also co-founded The Monarchs Collective (a management consulting firm in Los Angeles, California), where she has served as a partner since 2020. Ms. Lee served as Chairman and Chief Executive Officer of BET Networks (a global media and entertainment subsidiary of Viacom, Inc., headquartered in New York, New York) from 2006 until her retirement in 2018. Ms. Lee joined BET Networks in 1986 and served in several leadership roles, including President and Chief Executive Officer (2005-2006), President and Chief Operating Officer (1995-2005), and Executive Vice President and General Counsel (1986-1995). | Ms. Lee brings a depth of executive management, strategy, and risk management experience to the Board, gained through her long-tenured leadership of BET Networks and her service on numerous other public company boards. As a result of her experience and service, her depth and breadth of knowledge on matters of corporate governance allows her to provide the Board with valuable perspective on oversight and accountability in a dynamic operating environment. Further, Ms. Lee’s more than 30 years of experience as an executive in the media industry, along with her broad board experience in consumer-facing brands are particularly valuable to the WBD Board. |
| | | | | | | | | Steven A. Miron Independent Director | | | | | | | Age: 57 Director Since: 2008 Class III Director Committee Memberships ■Compensation Committee | Other Public Company Directorships (past five years): ■Charter Communications, Inc. (2016-present) Education: ■American University, BS | |
| | | | | | Professional Experience Steven A. Miron is the chief executive officer of Advance/Newhouse Partnership, a privately-held media company, and a senior executive officer at Advance Publications, Inc. ("Advance"), a private, family-held business that owns and invests in a broad range of media, communications, technology, education, and live entertainment companies. Mr. Miron previously served as president of Advance/Newhouse Programming Partnership and Bright House Networks from 2002 to 2008, and as chief executive officer of Bright House Networks from 2008 until 2016, when it was merged into Charter Communications, Inc., making Advance one of the largest shareholders in that company. Prior to Bright House Networks, Mr. Miron held positions with MetroVision, Vision Cable Communications, NewChannels and Time Warner Cable. Mr. Miron has also served on the board of C-SPAN since November 2021. | Qualifications and Expertise Provided to Our Board Through his experience as a cable television executive, Mr. Miron has developed a deep understanding of our industry. Mr. Miron’s expertise in the cable television industry makes him a valued presence on our Board. He also brings to our Board his previous experiences on the boards of nonprofit organizations within the cable industry, including the National Cable & Telecommunications Association, CableLabs and CTAM. | | |
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| | | | | | | | | Steven O. Newhouse Independent Director | | | | | | | Age: 66 Director Since: 2022 Class III Director Committee Memberships ■Nominating and Corporate Governance Committee | Other Public Company Directorships
(past five years): ■None Education: ■Yale University, B.A. | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | Steven O. Newhouse is co-president of Advance, a private, family-held business that owns and invests in a broad range of media, communications, technology, education, and live entertainment companies. Since he became co-president 10 years ago, Advance has merged its cable business into a large ownership position in Charter Communications, Inc. and has acquired Stage Entertainment, Turnitin and The IRONMAN Group, as well as stakes in a variety of other companies. He has served as an observer on the board of Reddit since 2011 and was an observer on the board of Discovery, Inc. from 2008 until 2022. Mr. Newhouse also serves on the board of New York-Presbyterian Hospital, a non-profit organization. | Mr. Newhouse has a great depth of knowledge and experience regarding the media and entertainment business, including both content and distribution, which he gained in connection with his various operational and supervisory roles with Advance and its operating businesses. Mr. Newhouse is an experienced member of boards of directors and brings valuable perspectives to the WBD Board from his experience with media companies that are expanding globally, in industries that are undergoing transformation, and as an experienced owner, director and leader of a variety of sector-leading businesses. |
| | | | | | | | | Geoffrey Y. Yang Independent Director | | | | | | | Age: 64 Director Since: 2022 Class III Director Committee Memberships ■Compensation Committee | Other Public Company Directorships
(past five years): ■Franklin Resources Inc. (2011-present) ■AT&T Inc. (2016-2022) ■Liberty Media Acquisition Corporation (2021-2022) Education: ■Princeton University, BSE ■Stanford University, MBA | | | | |
| | | | | | | Professional Experience | Qualifications and Expertise Provided to Our Board | | Geoffrey Y. Yang is a founding partner and Managing Director of Redpoint Ventures (a global private equity and venture capital firm based in Woodside, California) and has served in this capacity since 1999. He also founded Performance Health Sciences (d/b/a Apeiron Life), located in Menlo Park, California, where he has served as Chief Executive Officer and a member of its board of directors since April 2018. Prior to founding Redpoint, Mr. Yang was a General Partner with Institutional Venture Partners (a private equity investment firm in Menlo Park, California), which he joined in 1987. Mr. Yang has over 35 years of experience in the venture capital industry and has helped found or served on the boards of a variety of consumer media, internet, and infrastructure companies. | Mr. Yang has extensive experience in technology and innovative forms of digital media and advertising. He has helped to found, invest in, and provide strategic guidance to communications infrastructure and consumer media and entertainment companies internationally. |
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Corporate Governance Our corporate governance practices are established and monitored by our Board. TheOur Board regularly assesses our governance policies in light of legal requirements and governance best practices.
Corporate Governance Guidelines Our corporate governance practices are embodied in a formal document that has been approved by our Board. The Warner Bros. Discovery, Inc. Corporate Governance Guidelines, (the “Guidelines”)or the Guidelines, are posted to the Investor Relations section of our corporate website athttps://corporate.discovery.comir.wbd.com. These Guidelines, which provide a framework for the conduct of theour Board’s business, provide that: the Board’s responsibility is to oversee the management of Discovery and to help ensure that the interests of the stockholders are served;
| | | | | | | | | | | ■our Board’s responsibility is to oversee the management of Warner Bros. Discovery and to help ensure that the interests of the stockholders are served; ■a majority of the members of our Board shall be independent directors; ■the independent directors meet at least twice a year in executive session; ■directors have unimpeded access to senior management and, as necessary and appropriate, independent advisors; ■all directors are encouraged to participate in continuing director education on an ongoing basis; and ■our Board and its committees will conduct self-evaluations to determine whether they are functioning effectively. |
a majority of the members of the Board shall be independent directors;
the independent directors meet at least twice a year in executive session;
directors have unimpeded access to senior management and, as necessary and appropriate, independent advisors;
all directors are encouraged to participate in continuing director education on an ongoing basis; and
the Board and its committees will conduct self-evaluations to determine whether they are functioning effectively.
TheOur Board periodically reviews the Guidelines and updates them as appropriate. Printed copies of our Guidelines are available to any stockholder upon request to the Corporate Secretary, at the address specified below under “—Stockholder“Stockholder Communication with Directors.”
Director Independence
It is our policy that a majority of the members of our Board be independent. For a director to be deemed independent, a director must be independent as determined under Rule 5605(a)(2) of the Nasdaq Marketplace Rules and, in the Board’s judgment, the director must not have a relationship with Discovery that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Nasdaq Marketplace Rules require that, subject to specified exceptions, (i) each member of a listed company’s audit, compensation and nominating and governance committees be independent, (ii) audit committee members also satisfy independence criteria set forth inRule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (iii) compensation committee members also satisfy independence criteria set forth in Rule 5605(d)(2)(A) of the Nasdaq Marketplace Rules. The Board considered the relationships and affiliations, as set forth in their biographies below, to determine our directors’ independence. In addition, the Board further considered certain directors’ relationships and positions with our large distributors, including Charter Communications, Inc. (“Charter”), Liberty Global plc (“Liberty Global”) and Liberty Broadband Corporation (“Liberty Broadband”). The Board has determined that these relationships do not interfere with the directors’ independence. Discovery’s Board has determined that S. Decker Anstrom, Robert R. Beck, Robert R. Bennett, Paul A. Gould, Kenneth W. Lowe, John C. Malone, Robert J. Miron, Steven A. Miron, Daniel E. Sanchez, Susan M. Swain and J. David Wargo are independent directors.
In order to be considered independent for purposes ofRule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the Board, or any other board committee: (1) accept any consulting, advisory, or other compensatory fee from the listed company, other than for board service; or (2) be an affiliated person of the listed company. Discovery’s Board has determined that each of S. Decker Anstrom, Susan M. Swain and J. David Wargo are independent for purposes of Rule10A-3.
In order to be considered independent for purposes of Rule 5605(d)(2)(A), a member of a compensation committee of a listed company may not, other than in his or her capacity as a member of the compensation committee, the Board or any other board committee: (1) accept any consulting, advisory, or other compensatory fee from the listed company, other than for board service; or (2) be an affiliated person of the listed company. Discovery’s Board has determined that each of Robert R. Beck, Paul A. Gould, Kenneth W. Lowe and Robert J. Miron are independent for purposes of Rule 5605(d)(2)(A).
Board Leadership Structure Discovery, Inc. historically has separated the roles of Chief Executive Officer (“CEO”) and Board Chair in recognition of the differences between the two roles. As part of our agreement with AT&T relating to our acquisition of the WarnerMedia Business, AT&T was entitled to designate an individual to serve as Board Chair of WBD; AT&T designated Samuel A. Di Piazza, Jr. Notwithstanding this designation, in April of 2022, concurrent with the closing of the WarnerMedia Transaction and the related changes to our capital structure and Board composition, the WBD Board considered our Board leadership structure and whether the CEO and Board Chair roles should continue to be separated or combined. The WBD Board noted that the CEO is responsible for setting Discovery’sWBD’s strategic direction, providing leadership and driving the performance of the Company, while the Board Chair provides guidance to the CEO, sets the agenda for Board meetings and presides over meetings of the full Board. In light of the industryleadership experience and management expertise of Robert J. Miron, ourMr. Di Piazza, the AT&T designee for Board Chair, and the dynamic leadership of David M. Zaslav, our CEO, theour Board feelsfelt that this structure continuescontinued to be appropriate for Warner Bros. Discovery.
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Director Independence It is our policy that a majority of the members of our Board be independent. For a director to be deemed independent, a director must be independent as determined under Rule 5605(a)(2) of the Nasdaq Global Select Market Rules (“Nasdaq Rules”) and, in the Board’s judgment, the director must not have a relationship with Warner Bros. Discovery that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our Board considered the relationships and affiliations of each director to determine his or her independence. Our Board has affirmatively determined that each director and director nominee, other than Mr. Zaslav, is independent under the Nasdaq Rules and the Guidelines. Our Board specifically considered the relationships and positions of certain directors with our large distributors, including Charter Communications, Inc., Liberty Global plc and Liberty Broadband Corporation, and concluded that these relationships do not interfere with the directors’ independence. The Nasdaq Rules impose additional requirements for members of key committees, requiring that, subject to
specified exceptions, ■each member of a listed company’s audit, compensation and nominating and governance committees must be independent; ■audit committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and ■compensation committee members must also satisfy the additional independence criteria set forth in Rule 5605(d)(2)(A) of the Nasdaq Rules. In order to be considered independent for purposes of Rule 10A-3 under the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board, or any other board committee: (1) accept any consulting, advisory, or other compensatory fee from the listed company, other than for board service; or (2) be an affiliated person of the listed company. In order to be considered independent for purposes of Rule 5605(d)(2)(A) of the Nasdaq Rules, a member of a compensation committee of a listed company may not, other than in his or her capacity as a member of the compensation committee, the board or any other board committee: (1) accept any consulting, advisory, or other compensatory fee from the listed company, other than for board service; or (2) be an affiliated person of the listed company. In light of the Nasdaq Rules regarding committee service, our Board evaluated each member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee and determined each individual was an independent director pursuant to all applicable Nasdaq Rules and the Guidelines. In addition, each member of the Audit Committee also meets the additional standards for Audit Committee members established by the Securities and Exchange Commission ("SEC") in Rule 10A-3 of the Exchange Act, and each member of the Compensation Committee meets the additional standards in Rule 5605(d)(2)(A) of the Nasdaq Rules and also qualifies as a “Non-Employee Director” as defined in Rule 16b-3 of the Exchange Act. Director Nomination Process The Nominating and Corporate Governance Committee is responsible for recommending to the Board the slate of nominees to be proposed for election by stockholders at our annual meeting of stockholders and for reviewing proposals for nominations from stockholders that are submitted in accordance with the procedures summarized below. The Nominating and Corporate Governance Committee has the authority to employ a variety of methods for identifying and evaluating potential Board nominees. Candidates for vacancies on the Board may come to the attention of the committee through several different means, including recommendations from Board members, senior management, professional search firms, stockholder nominations and other sources.
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In considering whether to recommend any particular candidate for inclusion in the Board’s slate of director nominees, the Nominating and Corporate Governance Committee considers the candidate’s ability to meet the independence standards established by the Nasdaq Rules and also applies the criteria set forth in our Guidelines. The Nominating and Corporate Governance Committee does not assign specific weights to any particular criteria and no particular criterion is a prerequisite for each prospective nominee. Under our Guidelines, a nominee: | | | | | | | | | | | ■should have a reputation for integrity, honesty and adherence to high ethical standards; ■should have demonstrated business acumen, experience and ability to exercise sound judgment in matters that relate to the current and long-term objectives of the Company and should be willing and able to contribute positively to the decision-making process of the Company; ■should have a commitment to understand the Company and its industry and to regularly attend and participate in meetings of the Board and its committees; ■should understand the sometimes-conflicting interests of the various constituencies of the Company, which include stockholders, employees, customers, regulatory authorities, creditors and the general public, and should act in the interests of all stockholders; and ■shall not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to represent the interests of all the Company’s stockholders and to fulfill the responsibilities of a director. |
The Guidelines also provide that directors shall be selected on the basis of talent and experience. The Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity; however, the Board and the Nominating and Corporate Governance Committee believe that it is essential that Board members represent diverse viewpoints and the value of diversity on the Board will be considered when evaluating nominees. Diversity of background, including diversity of gender, race, ethnic or geographic origin and age are factors that will be considered. Experience in business, government and education and in media, entertainment and other areas relevant to our activities are also factors in the selection process. The Nominating and Corporate Governance Committee considers all nominations submitted by stockholders that meet the eligibility requirements outlined in our Bylaws. As required by our Bylaws, stockholder nominations of candidates for election as directors must be submitted in writing to the Corporate Secretary, Warner Bros. Discovery, Inc., 230 Park Avenue South, New York, New York 10003, no later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the anniversary of the preceding year’s annual meeting. The deadline for stockholder nominations of candidates for election as directors at the 2023 Annual Meeting was February 7, 2023. We did not receive any stockholder nominations of candidates for election as directors for the 2023 Annual Meeting. For information on what must be included in the written notice to nominate a candidate for election at the 2024 Annual Meeting of Stockholders, see “Submission of Stockholder Proposals for 2024 Annual Meeting” on page 98. Stockholder nominees for election to the Board will be evaluated by the Nominating and Corporate Governance Committee based on the criteria specified above and using the same process as a nominee recommended by the Board or management. Evaluations of Board Performance The Nominating and Corporate Governance Committee leads periodic evaluations of Board and committee performance. The evaluation process is designed to facilitate ongoing, systematic examination of the Board’s effectiveness and accountability, and to identify opportunities for improving its operations and procedures. In 2022, the Nominating and Corporate Governance Committee did not lead a Board evaluation process due to the significant changes to our Board and committee composition in connection with the closing of the WarnerMedia Transaction in April 2022. The Nominating and Corporate Governance Committee intends to resume its practice of conducting Board and committee evaluations in 2023. The Board and its committees also periodically review our key governance documents, including the Bylaws, Guidelines and each standing committee charter, and recommend changes as necessary or desirable. During 2022, the Board conducted a thorough review of the Company's Bylaws, Guidelines and each standing committee charter following the closing of the WarnerMedia Transaction and approved changes to each document.
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Transactions with Related Persons Our current written policies and procedures for the review, approval or ratification of related person transactions and other conflict of interest matters are based on our Guidelines and our Code of Ethics, which apply to all directors, officers and employees of WBD. Among other things, our Guidelines provide that when a director has an actual or potential conflict of interest, the director should promptly inform the Chief Executive Officer, the General Counsel and the chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee, or another independent committee of the Board designated by the Board, will resolve any conflict of interest involving a director, the Chief Executive Officer or any other executive officer. No related person transaction may be effected by WBD without the approval of the Nominating and Corporate Governance Committee or another independent committee designated by the Board. For purposes of our Guidelines, a “related person transaction” refers to any transaction which WBD would be required to disclose pursuant to Item 404 of Regulation S-K. In evaluating potential related person transactions, the Nominating and Corporate Governance Committee considers: | | | | | | | | | | | ■the nature of the related person’s interest in the transaction; ■the approximate total dollar value of, and extent of the related person’s interest in, the transaction; ■whether the transaction would be undertaken in our ordinary course of business; ■whether the transaction is proposed to be entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party; and ■the purpose of, and potential benefits to the Company of, the transaction. |
In the ordinary course of business during 2022, we were a party to certain business transactions with institutions affiliated with members of our Board. Management believes, and the Nominating and Corporate Governance Committee concurred, that the terms and conditions of the transactions were no more and no less favorable to us than the terms of similar transactions with unaffiliated institutions to which we are, or expect to be, a party. Those transactions that are required to be disclosed under rules promulgated by the SEC are described below. As previously announced, in May 2021, we entered into an agreement with AT&T to combine our business with WarnerMedia, a premium entertainment, sports and news business, to create a standalone, global entertainment company, and in connection with the WarnerMedia Transaction, Discovery, AT&T and Magallanes, Inc., a wholly owned subsidiary of AT&T (“Spinco”), entered into a voting agreement with Dr. Malone, who is a director of WBD, and certain affiliates of Dr. Malone, who, prior to the completion of the WarnerMedia Transaction, collectively held approximately less than 1% of the issued and outstanding shares of the Discovery Series A common stock and approximately 91% of the issued and outstanding shares of the Discovery Series B convertible common stock, which, prior to the completion of the WarnerMedia Transaction, represented approximately 20% of the aggregate voting power of the shares of Discovery voting stock. The voting agreement with Dr. Malone, among other things, required Dr. Malone and his affiliates to vote their shares in favor of (i) amending Discovery’s charter in connection with the WarnerMedia Transaction (the “Charter Amendment proposal”) and (ii) issuing shares of our common stock to Spinco stockholders in connection with the WarnerMedia Transaction (the “Share Issuance proposal”). This voting agreement with Dr. Malone was approved by the Board. The voting agreement was performed in 2022 in connection with the completion of the WarnerMedia Transaction and following the completion of the WarnerMedia Transaction, Dr. Malone and his affiliates collectively hold approximately less than 1% of the issued and outstanding shares of common stock of the Company. In May 2021, in connection with the WarnerMedia Transaction, Discovery, AT&T and Spinco also entered into the following agreements: (a)a voting agreement with Advance/Newhouse Programming Partnership (“ANPP”) and Advance/Newhouse Partnership (“ANP” and together with ANPP, “Advance/Newhouse”), which, prior to the closing of the WarnerMedia Transaction, held approximately 23% of the aggregate voting power of the shares of Discovery voting stock, which required Advance/Newhouse to vote their shares in favor of the Charter Amendment proposal and the Share Issuance proposal; and
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(b)a consent agreement ("consent agreement") with Advance/Newhouse where Advance/Newhouse agreed to consent to the WarnerMedia Transaction, in exchange for among other things, (i) Discovery agreeing to designate Steven A. Miron and Steven A. Newhouse as directors of the combined company upon completion of the WarnerMedia Transaction and (ii) Discovery and Advance/Newhouse agreeing to enter into a registration rights agreement on customary terms to be effective following the completion of the WarnerMedia Transaction. The Advance/Newhouse voting agreement and consent agreement were reviewed and negotiated by an independent transaction committee, which was fully comprised of independent directors who were disinterested relative to Advance/Newhouse to negotiate certain matters relating to the WarnerMedia Transaction with Advance/Newhouse (the “Independent Transaction Committee”). The Independent Transaction Committee recommended, and the Board approved, the Advance/Newhouse voting agreement and consent agreement. The voting agreement and consent agreement were performed in 2022 in connection with the completion of the WarnerMedia Transaction and following the completion of the WarnerMedia Transaction, Advance/Newhouse holds approximately 8% of the issued and outstanding shares of common stock of the Company. In April 2022, pursuant to and in accordance with the consent agreement, the Company and Advance/Newhouse entered into a registration rights agreement granting Advance/Newhouse registration rights covering certain shares of common stock of the Company held by them or which may be acquired by them in the future. The daughter of David M. Zaslav, our CEO, was employed by us during 2022 as a producer for CNN. She has served in this position since 2019, prior to the closing of the WarnerMedia Transaction in 2022. Her total compensation in fiscal year 2022 exceeded the $120,000 reporting threshold. The compensation she received was consistent with the level and type of compensation provided to other employees in similar positions. The daughter of Debra L. Lee, a member of our Board, was engaged by the Company during 2022 as a writer for a television program produced by Warner Bros. Television. Her total compensation in fiscal year 2022 exceeded the $120,000 reporting threshold. The compensation she received was based on the Writers Guild of America fee scale and was consistent with the amount of compensation provided to other writers in similar positions. Board Role in Risk Oversight | | | | | | | | | | | | | | | | Board of Directors | | ■has an active role, as a whole and at the committee level, in overseeing risk management. ■routinely reviews information regarding our credit, liquidity and operations, as well as the risks associated with each. ■regularly reviews information regarding our cybersecurity risks and is frequently updated by our Chief Information Security Officer on how we are determining and mitigating those risks. | | | | | | | | | | | | | | Audit Committee | Compensation Committee | Nominating and Corporate
Governance Committee | ■receives quarterly updates on our cybersecurity risks and readiness. ■oversees management of financial reporting risks. | ■is responsible for overseeing the management of risks relating to our incentive compensation plans and arrangements. | ■manages risks associated with the independence of the Board and potential conflicts of interest. | | | |
While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire Board is regularly informed through committee reports and management presentations to the full Board about such risks.
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ESG Governance The WBD Board provides oversight of Environmental, Social and Governance (ESG) activities through the Nominating and Corporate Governance Committee and Audit Committee. The Nominating and Corporate Governance Committee is responsible for overseeing and monitoring the Company’s strategy, policies, commitments, and initiatives with respect to ESG matters. The Audit Committee reviews the Company’s key public ESG disclosures and the adequacy and effectiveness of applicable internal reporting and controls related to such disclosures and oversees key finance-related initiatives related to ESG. To ensure that ESG is appropriately managedthroughout the organization, we have designed the following governance structures: | | | | | | | | | | Board of Directors ESG oversight is provided by the Nominating and Corporate Governance Committee and the Audit Committee | | | | | | | | CEO The CEO provides executive direction on ESG strategy | | | | | | | | Corporate Leadership Team Our Chief Corporate Affairs Officer has functional responsibility for ESG, and is supported by our other senior executives including our General Counsel, Chief People and Culture Officer and Chief Diversity Equity and Inclusion Officer | | | | | | | | ESG/CSR Team Supports WBD’s ESG strategy and is directly accountable for WBD’s environmental strategy | | | | | | | | ESG Steering Committee Senior leaders from operating divisions and corporate functions who meet regularly to drive decision making, accountability, and ownership of specific ESG initiatives | |
For more information on our approach to ESG at WBD, please see wbd.com/esg.
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Board Role in Human Capital Management Our Board believes that effective talent development and human capital management are important to WBD’s continued success. Our Board is involved in leadership development and oversees succession planning. Our Board conducts at least one meeting each year at which the Board reviews the Company’s talent strategies, leadership pipeline and succession plans for key executive positions. Our Nominating and Corporate Governance Committee oversees the process of succession planning and our Compensation Committee implements programs to retain and motivate key talent. Director Orientation and Continuing Education WBD provides a robust director orientation program. This orientation program includes a thorough review of background material and meetings with senior management. The orientation allows new directors to become familiar with our business and strategic plans; significant financial matters; core values, including ethics, compliance programs and corporate governance practices; and other key policies and practices. In 2022, following the closing of the WarnerMedia Transaction, we provided orientation for all WBD Board members to help them become familiar with the business, brands, operations and finances of the combined company. We also provided committee-specific orientation sessions for the members of our three standing Board committees focused on each committee's areas of responsibility. We encourage the participation of all Board members in continuing education programs, at the expense of the Company, that are relevant to the business and affairs of the Company and the fulfillment of the directors’ responsibilities as members of our Board and its committees. Code of Ethics We have a Code of Ethics (the “Code”) that is applicable to all of our directors, officers and employees. TheOur Board reviews the Code regularly and approved an updated Code in January 2019.2023. The Code, is available, and any amendments or waivers that would be required to be disclosed under SEC rules, are posted to the Investor Relations section of our corporate website athttps://corporate.discovery.comir.wbd.com. Printed copies of the Code are also available without charge upon request to the Corporate Secretary at the address specified below under “—“Stockholder Communication with Directors.” Stockholder Communication with Directors.”CommitteesDirectors
Warner Bros. Discovery’s stockholders may send communications to the Board or to individual directors by mail addressed to the Board of Directors or to an individual director c/o Corporate Secretary, Warner Bros. Discovery, Inc., 230 Park Avenue South, New York, New York 10003 or by email to CorporateSecretary@discovery.com. Our Corporate Secretary receives and processes all communications and will refer relevant and appropriate communications to our Board Chair. Depending upon the nature of the Boardconcern, it may be referred to our Corporate Audit Department, Legal Department or Finance Department, or other appropriate departments. Our Board will give appropriate attention to written communications that are submitted by stockholders and other interested parties, and will respond if and as appropriate, with advice and assistance from the General Counsel.
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Board Meetings and Committees Director Attendance at Board and Annual Meetings Directors meet their responsibilities by preparing for and attending Board and committee meetings, and through communication with our Board Chair, our Chief Executive Officer and other members of management on matters affecting the Company. During 2022, our Board of Directors held 25 meetings. All directors who served on the Board during 2022 attended at least 82% of the scheduled Board meetings (held during the period for which they were a director) and meetings held by committees of which they were a member (held during the period for which they were a member). Our Board encourages all members to attend each annual meeting of stockholders. All directors who were members of the Board at the time of the 2022 Annual Meeting of Stockholders attended the 2022 Annual Meeting of Stockholders. Board Committee The Structure
Our Board has established an Audit Committee, whose members are Messrs. Wargo (Chair) and Anstrom and Ms. Swain. The Board has determined that J. David Wargo is an “Audit Committee Financial Expert”three standing committees as defined under SEC rules. The Board has adopted a written charter forof the record date: the Audit Committee; the Compensation Committee; and the Nominating and Corporate Governance Committee. Each of these standing committees has a charter that is reviewed as necessary by that committee. Proposed changes to the charter of any of these committees are approved by the Board. During 2022, each Committee conducted a thorough review of its charter following the closing of the WarnerMedia Transaction and proposed changes, which iswere approved by the Board. The committee charters are available in the Investor Relationscorporate governance section of our corporateInvestor Relations website athttps://corporate.discovery.com.Pursuant
ir.wbd.com. Information regarding membership in the standing committees as of the date of this proxy statement, the number of meetings held by each in 2022, the principal responsibilities of the standing committees, and other relevant information are described in the tables that follow. The Board, by resolution, may from time to time establish certain other committees of the Board, consisting of one or more of the directors of WBD. Any committee so established will have the powers delegated to it by resolution of the Board, subject to applicable law. | | | | | | | | | | | | | | | | | | | | | Audit Committee | | CHAIR | MEMBERS | | MEETINGS IN 2022: 6 | REPORT The Audit Committee report appears on page 42of this proxy statement. | Paula A.
Price | Robert R.
Bennett | Fazal Merchant | | | | | |
Primary Responsibilities The Audit Committee Charter, the Audit Committee reviews and monitors the corporate accounting and financial reporting and the internal and external audits of Discovery. The Audit Committee’s functions include, among other things:is responsible for appointing or replacing our independent registered public accounting firm. The Audit Committee annually evaluates the performance of the Company’sour independent registered accounting firm, including the senior engagement team, and determines whether to reengage the current accounting firm or consider other firms. The Audit Committee is involved in the selection of the lead engagement partner whenever a rotational change is required, normally every five years, or for any other reason. PwC has served as our independent registered public accounting firm since September 17, 2008.
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Factors considered by the Audit Committee in determining whether to retain the firm include: ■The audit firm’s capabilities to handle the breadth and complexity of the Company’sour global operations; ■The audit firm’s technical expertise and knowledge of the Company’sour industry and global operations; ■The quality and candor of the audit firm’s communications with the Audit Committee and management; ■The audit firm’s independence; ■The quality and efficiency of the services provided by the audit firm, including input from management on the audit firm’s performance, how effectively the audit firm demonstrated its independent judgment, objectivity and professional skepticism, and external data on the audit quality and performance including the Public Company Accounting Oversight Board reports on the audit firm and its peers; ■The appropriateness of the audit firm’s fees; and ■The audit firm’s tenure as our independent auditor, including the benefits of the tenure, and the controls and processes in place (such as rotation of key partners) that help ensure the audit firm’s independence in the face of such tenure. Additional Audit Committee responsibilities include: ■reviewing and approving in advance the scope of, and fees for, our annual audit and reviewing the results of our audits with our independent registered public accounting firm (see “Proposal 2:Two: Ratification of Appointment of Independent Registered Public Accounting Firm” for further information); ■reviewing and approving in advance the scope of, and the fees for,non-audit services of our independent registered public accounting firm (see “Proposal 2:Two: Ratification of Appointment of Independent Registered Public Accounting Firm” for further information); ■reviewing our audited financial statements with our management and independent registered public accounting firm and making recommendations regarding inclusion of such audited financial statements in certain of our public filings; ■overseeing the performance of services by our independent registered public accounting firm, including holding quarterly meetings to review the quarterly written communications of our independent registered public accounting firm; discussing with our independent registered public accounting firm issues regarding the ability of our independent registered public accounting firm to perform such services; obtaining, annually, a written report from our independent registered public accounting firm addressing internal controls; reviewing with our independent registered public accounting firm any audit-related problems or difficulties and the response of our management; and addressing other general oversight issues; ■reviewing compliance with, and the adequacy of, our existing major accounting and financial reporting policies; ■overseeing the implementation and maintenance of an internal audit function; periodically reviewing the results and findings of the internal audit function; and coordinating with management to ensure that the issues associated with such results and findings are addressed; ■reviewing and discussing the Company’sour cybersecurity and information technology policies and risks and itsour cybersecurity readiness; ■reviewing and discussing our data privacy policies and compliance with data privacy legislation in the jurisdictions and countries where we do business; ■establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns; ■reviewing and discussing any reports concerning material violations submitted by Companyour internal attorneys or outside counsel; ■reviewing and overseeing compliance with, and establishing procedures for, the treatment of alleged violations of the Code; and ■reviewing our key public ESG disclosures and the adequacy and effectiveness of applicable internal reporting and controls related to such disclosures.
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Pending Changes to Audit Committee Membership As discussed elsewhere in this proxy statement, Mr. Bennett will retire from the WBD Board as of April 1, 2023, resulting in a vacancy on the Audit Committee. On March 21, 2023, the Board determined that it would appoint Kenneth W. Lowe to the Audit Committee, report required by SEC rules, which is included on page 25effective as of April 2, 2023, to fill this proxy statement.vacancy. The Board determined that it would also appoint Samuel A. Di Piazza, Jr. to the Audit Committee, also effective as of April 2, 2023. Compensation Committee
Financial Expertise The Board has established a Compensationdetermined that current Audit Committee whose members are Messrs. R. Miron (Chair), Beck, Gould,Paula A. Price and Lowe. The Compensation Committee’s functions include, among other things:Fazal Merchant each qualify as an “Audit Committee Financial Expert” as defined under SEC rules. It has also determined that each of Samuel A. Di Piazza, Jr. and Kenneth W. Lowe, who will be joining the Audit Committee on April 2, 2023, qualify as an "Audit Committee Financial Expert," meaning that all members of the WBD Audit Committee, as of April 2, 2023, meet the SEC criteria for Audit Committee financial expertise. | | | | | | | | | | | | | | | | | | | | | | | | | Compensation Committee | | CHAIR | MEMBERS | MEETINGS IN 2022: 10 | REPORT The Compensation Committee report appears on page 43 of this proxy statement. | Paul A.
Gould | Richard W.
Fisher | Steven A.
Miron | Geoffrey Y. Yang | | | | | | |
Primary Responsibilities ■determining our CEO’s compensation, including evaluating our CEO and reviewing and approving corporate goals and objectives relevant to our CEO’s compensation; determining our CEO’s compensation;
■reviewing and approving theall forms of compensation ofto our named executive officers, other executive officers and certain other executive officers; executives;■reviewing and making recommendations to the Board on stock compensation arrangements for all employees; ■reviewing and making recommendations to the Board for compensation ofnon-employee directors for their service on the Board and its committees; ■overseeing the structure of employee benefit programs and other compensation programs; ■reviewing and discussing annually with management our “Compensation Discussion and Analysis,” which is included beginning on page 2743 of this proxy statement; and preparing■conducting an annual assessment of the Compensation Committee report required by SEC rules, which is included on page 26independence of this proxy statement.
The Compensation Committee reviews all forms of compensation providedany outside advisor it chooses to our executive officers and has approved the same.
The Board has adopted a written charter for the Compensation Committee, which is available in the Investor Relations section of our corporate website athttps://corporate.discovery.com.
The processes and procedures followed by our Compensation Committee in considering and determining executive compensation, including the use of consultants and other outside advisors, are described below in “Compensation Discussion and Analysis.”
retain. Compensation Committee Interlocks and Insider Participation No member of Discovery’sthe Committee and no one who served on the Committee or the Discovery Compensation Committee during 2022 is a current or former officer, or during 20192022 was an employee, of Warner Bros. Discovery or any of its subsidiaries. None of Discovery’sWBD's executive officers serves or, during 2019,2022, served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity whose executive officers served as one of our directors or a member of our Compensation Committee. Nominating and Corporate Governance Committee
The Board has established a Nominating and Corporate Governance Committee, whose members are Messrs. Gould (Chair), S. Miron and Wargo and Ms. Swain. In considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by stockholders, the Nominating and Corporate Governance Committee applies the criteria set forth in our Guidelines. These criteria include the candidate’s integrity, business acumen, experience, commitment, diligence, conflicts of interest, diversity of background and the ability to act in the interests of all stockholders. Our
Guidelines specify that the backgrounds and qualifications of the directors considered as a group should provide a significant breadth of experience, knowledge and abilities that will assist the Board in fulfilling its responsibilities. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applicable to all prospective nominees. The Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity; however, the Board and the Nominating and Corporate Governance Committee believe that it is essential that the Board members represent diverse viewpoints.
The Nominating and Corporate Governance Committee’s primary functions are:
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| MEETINGS IN 2022: 5 | John C. Malone | Li Haslett Chen | Paul A.
Gould | Debra L. Lee | Fazal Merchant | Steven O. Newhouse |
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Primary Responsibilities ■overseeing corporate governance matters generally, including reviewing and recommending changes to our Guidelines, and the independence standards and qualifications for Board membership set forth in theour Guidelines; to oversee■overseeing the annual evaluation of the performance of theour Board and each of its committees;
to identify■identifying individuals qualified to be members of theour Board and to recommend Board nominees;
to review■reviewing and makemaking recommendations concerning the independence of Board members;
to review■reviewing and approveapproving related person transactions;
to review■reviewing the membership qualifications of Board members under theour Guidelines;
■reviewing and to review and make making recommendations concerning membership on Board committees and on committee structure and responsibilities.
responsibilities; andThe Board has adopted a written charter for the Nominating
■overseeing and Corporate Governance Committee, which is available in the Investor Relations section of our corporate website athttp://corporate.discovery.com.Finance Committee
The Board has established a Finance Committee, whose members are Messrs. Bennett (Chair), S. Miron, Sanchez and Wargo. The Finance Committee’s authority and responsibilities include, among other things:
to review or oversee significant treasury matters such as capital structure and allocation, derivative policies, global liquidity, fixed income investments, borrowings, currency exposure and hedging, dividend policy, share issuances and repurchases, and capital spending;
to evaluate all significant projects requiring capital, including share repurchases, investments and acquisitions using their internal rate of return or other metrics that the Finance Committee determines to be appropriate;
to evaluate and revisemonitoring the Company’s approvalstrategy, policies, for investment, acquisition, joint venturecommitments, and divestiture transactions;
initiatives with respect to review the scope, direction, quality, investment levels and execution of the Company’s investment, acquisition, joint venture and divestiture transactions; ESG matters.to evaluate the execution, financial results and integration of the Company’s completed investment, acquisition, joint venture and divestiture transactions;
to oversee the Company’s loans and guarantees of third-party debt and obligations;
to review the activities of Investor Relations;
to review and approve, at least annually, the Company’s decision to enter into swaps and other derivative transactions that are exempt from exchange-execution and clearing under“end-user exception” regulations established by the Commodity Futures Trading Commission, and review
| and discuss with management applicable Company policies governing the Company’s use of swaps subject to theend-user exception; and
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to consider other finance and investment matters regarding the Company.
Executive Committee
The Board has established an Executive Committee, whose members are Messrs. R. Miron (Chair), Bennett, Malone and Zaslav. The primary function of the Executive Committee is to exercise powers of the Board on matters of an urgent nature that arise between regularly scheduled Board meetings, subject to certain limitations. For example, the Executive Committee may not exercise the Board’s powers to approve matters that must be submitted to the stockholders for their approval, appoint directors or officers, amend our Certificate of Incorporation or Bylaws or approve offerings of our capital stock.
Other Committees
The Board, by resolution, may from time to time establish certain other committees of the Board, consisting of one or more of the directors of Discovery. Any committee so established will have the powers delegated to it by resolution of the Board, subject to applicable law.
Board Role in Risk Oversight
The Board has an active role, as a whole and at the committee level, in overseeing risk management. The Board routinely reviews information regarding our credit, liquidity and operations, as well as the risks associated with each. The Board regularly reviews information regarding our cybersecurity risks and is frequently updated by our Chief Information Security Officer on how we are determining and mitigating those risks. The Audit Committee receives quarterly updates on our cybersecurity risks and readiness. The Audit Committee also oversees management of financial reporting risks. The Compensation Committee is responsible for overseeing the management of risks relating to our incentive compensation plans and arrangements. The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports and management presentations to the full Board about such risks.
Board Meetings
During 2019, there were nine meetings of the Board as whole, seven meetings of the Compensation Committee, seven meetings of the Audit Committee, two meetings of the Nominating and Corporate Governance Committee, twelve meetings of the Finance Committee and no meetings of the Executive Committee.
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Director Attendance at Board and Annual MeetingsIn 2019, each director of Discovery attended at least 75% of the aggregate number of Board and committee meetings on which he or she served. Compensation
The Board encourages all members of the Board to attend each annual meeting of the Company’s stockholders. All twelve of our directors attended the May 2019 annual meeting of stockholders in person.Director Nomination Process
Under its charter, the Nominating and Corporate Governance Committee is responsible for recommending to the Board the slate of nominees to be proposed for election by the Series A and Series B common stockholders and the slate of nominees to be proposed for election by the SeriesA-1 preferred
stockholders at our annual meeting and for reviewing proposals for nominations from stockholders that are submitted in accordance with the procedures summarized below.
The Nominating and Corporate Governance Committee has the authority to employ a variety of methods for identifying and evaluating potential Board nominees. Candidates for vacancies on the Board may come to the attention of the committee through several different means, including recommendations from Board members, senior management, professional search firms, stockholder nominations and other sources.
The Nominating and Corporate Governance Committee considers all nominations submitted by stockholders that meet the eligibility requirements outlined in our Bylaws. As required by our Bylaws, stockholder nominations of candidates for election as directors must be submitted in writing to the Corporate Secretary, Discovery, Inc., 8403 Colesville Road, Silver Spring, Maryland 20910, no later than the close of business on the 60th day nor earlier than the 90th day prior to the anniversary of the preceding year’s annual meeting. The deadline for stockholder nominations of candidates for election as directors at the 2020 Annual Meeting was March 9, 2020. We did not receive any stockholder nominations of candidates for election as directors for the 2020 Annual Meeting. For information on what must be included in the written notice to nominate a candidate for election at the next annual meeting of stockholders, see “Stockholder Proposals” below.
In considering whether to recommend any particular candidate for inclusion in the Board’s slate of director nominees, the Nominating and Corporate Governance Committee applies the criteria set forth in our Guidelines. Under these criteria, a nominee:
should have a reputation for integrity, honesty and adherence to high ethical standards;
should have demonstrated business acumen, experience and ability to exercise sound judgment in matters that relate to the current and long-term objectives of the Company and should be willing and able to contribute positively to the decision-making process of the Company;
should have a commitment to understand the Company and its industry and to regularly attend and participate in meetings of the Board and its committees;
should understand the sometimes-conflicting interests of the various constituencies of the Company, which include stockholders, employees, customers, regulatory authorities, creditors and the general public, and should act in the interests of all stockholders; and
shall not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to represent the interests of all the Company’s stockholders and to fulfill the responsibilities of a director.
The Guidelines also provide that directors shall be selected on the basis of talent and experience and that diversity of background, including diversity of gender, race, ethnic or geographic origin, age, and experience in business, government and education and in media, entertainment and other areas relevant to the Company’s activities are factors in the selection process.
The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. In selecting candidates for election to the Board, the Board also considers a director’s independence. These independence standards incorporate the independence standards set forth in the Corporate Governance Rules of the Nasdaq Stock Market. Stockholder nominees for election to the Board will be evaluated by the Nominating and Corporate Governance Committee based on the criteria specified above and using the same process as a nominee recommended by the Board or management.
Stockholder Communication with Directors
Discovery’s stockholders may send communications to the Board or to individual directors by mail addressed to the Board of Directors or to an individual director c/o Corporate Secretary, Discovery, Inc., 8403 Colesville Road, Silver Spring, Maryland 20910. Communications from stockholders will be forwarded to Discovery’s directors on a timely basis.
Certain Relationships and Related Person Transactions
In the ordinary course of business during 2019, we were a party to certain business transactions with institutions affiliated with members of our Board. Management believes that the terms and conditions of the transactions were no more and no less favorable to us than the terms of similar transactions with unaffiliated institutions to which we are, or expect to be, a party. The Nominating and Corporate Governance Committee has guidelines for evaluating potential related person transactions, which are described in the section below.
In May 2019, we acquired Golf Digest from Conde Nast for approximately $35 million (the “Golf Digest Transaction”). Conde Nast is a wholly-owned, indirect subsidiary of Advance Publications, Inc. Advance Publications, Inc. is affiliated with Advance/Newhouse Programming Partnership, a preferred and common stockholder of the Company and “related person” (as such term is defined in Item 404(a) of RegulationS-K) of the Company who may have a direct or indirect material interest in the Golf Digest Transaction. The Golf Digest Transaction was approved by all of the common stock directors; the preferred stock directors were recused from the discussions of the Golf Digest Transaction and did not participate in the vote to approve the transaction.
Policy Governing Related Person Transactions
Our current written policies and procedures for the review, approval or ratification of related person transactions and other conflict of interest matters are based on our Guidelines and our Code, which apply to all directors, officers and employees of Discovery. Among other things, the Guidelines provide that when a director has an actual or potential conflict of interest, the director should promptly inform the Chief Executive Officer, the General Counsel and the chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee, or another independent committee of the Board designated by the Board, will resolve any conflict of interest involving a director, the Chief Executive Officer or any other executive officer. No related person transaction may be effected by Discovery without the approval of the Nominating and Corporate Governance Committee or another independent committee designated by the Board.
In evaluating potential related person transactions, the Nominating and Corporate Governance Committee considers:
the nature of the related person’s interest in the transaction;
the approximate total dollar value of, and extent of the related person’s interest in, the transaction;
whether the transaction would be undertaken in our ordinary course of business;
whether the transaction is proposed to be entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party; and
the purpose of, and potential benefits to the Company of, the transaction.
For purposes of the Guidelines, a “related person transaction” refers to any transaction which Discovery would be required to disclose pursuant to Item 404 of RegulationS-K.
The Nominating and Corporate Governance Committee reviewed all transactions between the Company and its related persons and determined that, other than the Golf Digest Transaction described above, no transaction in 2019 required approval pursuant to our policy or disclosure pursuant to Item 404 of RegulationS-K.
BOARD COMPENSATION
The Compensation Committee reviews compensation for ournon-employee directors and recommends any changes to such compensation to the full Board for approval. The components of ournon-employee director compensation are cash fees and equity awards. The Board believes that appropriate compensation levels help attract and retain superior candidates for Board service and that director compensation should be weighted toward equity-based compensation to enhance alignment with the interests of our stockholders.
We do not have any pension or retirement plans for ournon-employee directors. Employee directors do not receive any compensation for their Board service.
Currently, Mr. Zaslav is the only director who is also a Company employee. 2022 Director Compensation Program The following table shows the cash and equity compensation that was in effect in 2019. | | | | | Board Service | | | | | Annual Cash Compensation | | | | | Retainer | | $ | 100,000 | | Retainer, Board Chair | | $ | 202,500 | | Annual Equity Compensation | | | | | Restricted Stock Units | | $ | 150,000 | | | | Committee Service Annual Retainer (cash) | | | | | Audit Committee Chair | | $ | 33,000 | | Compensation Committee Chair | | $ | 42,000 | | Finance Committee Chair | | $ | 25,000 | | Nominating and Corporate Governance Committee Chair | | $ | 17,500 | | Independent Transaction Committee Chair | | $ | 42,000 | | Audit Committee Member | | $ | 20,000 | | Compensation Committee Member | | $ | 27,500 | | Finance Committee Member | | $ | 15,000 | | Nominating and Corporate Governance Committee Member | | $ | 10,000 | | Independent Transaction Committee Member | | $ | 27,500 | |
2022. During the second quarter of 2022 following the closing of the WarnerMedia Transaction, the Committee, with the assistance of its independent compensation consultants, reviewed our director compensation program against the director compensation programs of companies in our compensation peer group (as set forth in our "Compensation Discussion and Analysis" on pages 47 and 48 of this proxy statement) as well as companies of similar size as the combined company after the closing of the WarnerMedia Transaction. Upon the recommendation of the Committee, the full Board approved changes to the cash and equity compensation as shown in the table below. | | | | | | | | | | | | | Board Service Retainers | Q1 2022 | Q2-Q4 2022 | | Annual Cash Compensation | | | | | Retainer, Board Member | $ | 100,000 | | | $ | 125,000 | | | Retainer, Board Chair | $ | 202,500 | | | $ | 300,000 | | | Annual Equity Compensation | | | | | Restricted Stock Units | $ | 190,000 | | | $ | 220,000 | |
| | | | | | | | | | | | | Committee Service Annual Retainers (cash) | Q1 2022 | Q2-Q4 2022 | | Audit Committee Chair | $ | 35,000 | | | $ | 35,000 | | | Audit Committee Member | $ | 20,000 | | | $ | 20,000 | | | Compensation Committee Chair | $ | 42,000 | | | $ | 35,000 | | | Compensation Committee Member | $ | 27,500 | | | $ | 20,000 | | | Nominating and Corporate Governance Committee Chair | $ | 17,500 | | | $ | 17,500 | | | Nominating and Corporate Governance Committee Member | $ | 10,000 | | | $ | 10,000 | | | Finance Committee Chair* | $ | 33,000 | | | | | Finance Committee Member* | $ | 20,000 | | | |
* The Board maintained the Finance Committee until February 2022, when the Board took action to dissolve the Finance Committee. Mr. Bennett served as the chair of the Finance Committee, and Messrs. S. Miron, Sanchez and Wargo served as members of the Finance Committee. Cash Compensation. Cash compensation for non-employee directors consists solely of the annual retainers described above. Annual retainers are paid in quarterly installments. For the purpose of calculating these retainers and fees, the annual period commences with the election of directors at the annual meeting. The retainer paid to non-employee directors who are elected or appointed after the most recent annual stockholders’ meetingmid-year is prorated based on the quarter in which they join the Board.
Equity Compensation. Non-employee directors receive stock-based compensation under our 2005Non-Employee Director Incentive Plan, as it may be amended from time to time. TheOur Board determined for 20192022 that the equity awards to directors should consist solely of restricted stock units (“RSUs”) of Series A common stock. Annual equity grants arefor 2022 were made on the date of the annual stockholders’ meeting.June 29, 2022. Equity awards for directors who are elected or appointed after the most recent annual stockholders’ meeting are prorated based on when they join the Board. The number of RSUs is calculated by dividing the dollar amount of the award by the closing price of our Series A
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common stock on the last business day prior to the grant date. TheOur Board has implemented a cap of $750,000 on individual director annual equity award grant date value. RSUs granted in 2022 will vest 100% on the earlier of the one-year anniversary of the grant date and the date of the 2023 annual meeting of stockholders, assuming continued service to such date.date of vesting. The RSUs granted to our directors do not include the right to receive cash dividends.
Board of Directors Stock Ownership Policy. The Our Board maintains a stock ownership policy that requires each director to hold a specified amount of our stock, calculated as a multiple of threefive times the then-current annual cash retainer for Board service, exclusive of any additional retainer with respect to committee or other service. Each director is required to reach the stock holding target within five years after joining the Board. TheOur Board determined that any shares of our stock beneficially owned by the director, as well as unvested awards of RSUs and deferred stock awards, but not shares underlying stock options, would be counted for purposes of meeting the stock holding target. Once a director meets the target, the director is expected to maintain holdings at the target for as long as he or she remains a Board member. TheOur Board may take any appropriate action to support the intent of the policy, including requiring a director to retain a percentage of shares pursuant to stock option exercises or vesting events in future years. As ofAll directors serving on the date of this proxy statement, all directors haveBoard at December 31, 2022 had reached and maintained the stock holding target or arewere on track to do so.
Deferred Compensation.Discovery has During 2022, the Company maintained a deferred compensation program that allows non-employee directors to defer the settlement of their RSU grants until their departure from our Board. If a director elects to defer settlement of his or her RSU grant, they must make an irrevocable election before the end of the calendar year prior to the year in which the grant is made (or, in the case of directors who join the Board mid-year, prior to their election to the Board), and must do so for the entire amount of the grant. For example, for the grants made in May 2019, directors made their deferral elections before the end of 2018. Directors do not receive cash dividends on deferred RSUs. Messrs. Anstrom, Beck,Bennett, Di Piazza, Malone, Gould, Lowe, R. Miron, SanchezFisher and WargoYang and Ms. SwainMses. Chen, Lee and Price elected to defer the settlement of their RSU grants made in 2019.Expense Reimbursement.2022.
Beginning in 2023, our non-employee directors may elect to (i) receive shares of our common stock in lieu of any cash retainer and/or (ii) defer all or a portion of any cash or stock retainer, in each case with respect to a specific calendar year in which the non-employee director will receive such compensation (the "Plan Year") under our newly established Warner Bros. Discovery, Inc. Non-Employee Director Deferral Plan. Any such election must be made prior to the beginning of the Plan Year by executing a deferral agreement specifying the time and form of payment for amounts deferred for such Plan Year. The deferral agreement becomes irrevocable at the end of the period preceding the Plan Year. Other Director Compensation Matters We do not have any pension or retirement plans for our non-employee directors. Non-employee directors are reimbursed for out-of-pocket costs for attending each meeting of the Board or any Board committee of which they are a member, including airfare, whether by commercial aircraft or private plane. Director Education. Under the Guidelines, Discoverythe Company encourages the participation of all directors in continuing education programs, at Discovery’sthe Company’s expense, that are relevant to the business and affairs of Discoverythe Company and the fulfillment of the directors’ responsibilities as members of the Board and its committees.
Charitable Contribution Matching Program. Discovery
The Company provides a charitable contribution matching program through which we match contributions made by ournon-employee directors to eligible charitable organizations up to a maximum of $20,000 for each director per fiscal year. In order to be matched, the contribution must betax-deductible by Discovery.the Company. The program is designed to match contributions to educational, arts and cultural institutions that have been approved by the Internal Revenue Service astax-exempt institutions to which contributions are deductible for federal income tax purposes. Certain types of contributions and institutions would not be eligible for matching, such as tuition payments, contributions made to family foundations or other charitable foundations or organizations that are affiliated with anon-employee director, or membership or alumni association dues. Matching contributions under this program are included below in the following 2019Non-Employee2022 Director Summary Compensation TableTables under the “All Other Compensation” column.
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2022 Director Compensation Tables The following table summarizestables summarize the 2019 compensation provided to all persons who served asnon-employee directors during 2022. 2022 Director Compensation (Discovery Directors who resigned effective April 8, 2022) | | | | | | | | | | | | | | | | | | | Name | Fees Earned or
Paid in Cash
($) | Stock Awards ($)(1) | All Other Compensation ($) | Total
($) | | R. Beck | 63,750 | | | 0 | | 0 | | 63,750 | | | R. Johnson | 50,000 | | | 0 | | 0 | | 50,000 | | | K. Lowe | 73,750 | | | 0 | | 0 | | 73,750 | | | R. Miron | 122,250 | | | 0 | | 0 | | 122,250 | | | D. Sanchez | 60,000 | | | 0 | | 0 | | 60,000 | | | S. Swain | 65,000 | | | 0 | | 0 | | 65,000 | | | J.D. Wargo | 110,000 | | (2) | 0 | | 0 | | 110,000 | |
(1) The Discovery, Inc. Board members who resigned effective immediately prior to the year.2019Non-Employeeclosing of the WarnerMedia Transaction did not receive equity compensation in 2022.
(2) Includes a $27,500 retainer for service on the Independent Transaction Committee which was established in 2021 connection with the WarnerMedia Transaction. The retainer was earned in 2021 and paid in 2022 upon closing of the WarnerMedia Transaction. 2022 Director Summary Compensation Table | | | | | | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash ($) | | | Stock Awards ($)(1) | | | All Other
Compensation ($)(2) | | | Total ($) | | S. D. Anstrom | | | 147,500 | | | | 151,223 | | | | | | | | 298,723 | | R. Beck | | | 127,500 | | | | 151,223 | | | | 10,000 | | | | 288,723 | | R. Bennett | | | 125,000 | | | | 151,223 | | | | | | | | 276,223 | | P. Gould | | | 145,000 | | | | 151,223 | | | | | | | | 296,223 | | K. Lowe | | | 169,500 | | | | 151,223 | | | | | | | | 320,723 | | J. Malone | | | 100,000 | | | | 151,223 | | | | | | | | 251,223 | | R. Miron | | | 244,500 | | | | 151,223 | | | | | | | | 395,723 | | S. Miron | | | 125,000 | | | | 151,223 | | | | 20,000 | | | | 296,223 | | D. Sanchez | | | 115,000 | | | | 151,223 | | | | | | | | 266,223 | | S. Swain | | | 157,500 | | | | 151,223 | | | | | | | | 308,723 | | J. D. Wargo | | | 158,000 | | | | 151,223 | | | | | | | | 309,223 | |
(1) | The aggregate grant date fair value of the RSU awards made(Warner Bros. Discovery, Inc. Directors)(1)
| | | | | | | | | | | | | | | | | | | | | | Name | Fees Earned or
Paid in Cash
($) | Stock Awards
($)(2) | All Other
Compensation
($) | Total
($) | | R. Bennett | 217,250 | | (3) | 212,116 | | | | 429,366 | | | L. Chen | 101,250 | | | 212,116 | | | | 313,366 | | | S. Di Piazza | 225,000 | | | 212,116 | | | | 437,116 | | | R. Fisher | 108,750 | | | 212,116 | | | | 320,866 | | | P. Gould | 227,500 | | (4) | 212,116 | | | | 439,616 | | | D. Lee | 101,250 | | | 212,116 | | | | 313,366 | | | J. Malone | 156,875 | | | 212,116 | | | | 368,991 | | | F. Merchant | 116,250 | | | 212,116 | | | | 328,366 | | | S. Miron | 173,750 | | | 212,116 | | |
| 385,866 | | | S. Newhouse | 101,250 | | | 212,116 | | | | 313,366 | | | P. Price | 120,000 | | | 212,116 | | 20,000 | | (5) | 352,116 | | | G. Yang | 108,750 | | | 212,116 | | | | 320,866 | |
(1) This table reports fees paid during 2022 to allnon-employee directors in 2019 was $1,663,453, as calculated in accordance with FASB ASC Topic 718. At December 31, 2019, thenon-employee directors held stock options and unvested or deferred RSUs as follows: |
| | | | | | | | | | | | | | | | | Name | | Series A Common
Stock Options | | | Series C Common
Stock Options | | | Series A Common
Unvested or
Deferred RSUs | | | Series C Common
Unvested or
Deferred RSUs | | S. D. Anstrom | | | 7,160 | | | | 7,160 | | | | 28,802 | | | | 1,533 | | R. Beck | | | 7,160 | | | | 7,160 | | | | 33,246 | | | | 5,977 | | R. Bennett | | | 7,160 | | | | 7,160 | | | | 5,229 | | | | 0 | | P. Gould | | | 7,160 | | | | 7,160 | | | | 27,045 | | | | 3,977 | | K. Lowe | | | 0 | | | | 485,802 | | | | 5,229 | | | | 0 | | J. Malone | | | 7,160 | | | | 7,160 | | | | 7,229 | | | | 2,000 | | R. Miron | | | 7,160 | | | | 7,160 | | | | 34,311 | | | | 7,042 | | S. Miron | | | 7,160 | | | | 7,160 | | | | 7,229 | | | | 2,000 | | D. Sanchez | | | 0 | | | | 0 | | | | 5,229 | | | | 0 | | S. Swain | | | 0 | | | | 0 | | | | 20,345 | | | | 0 | | J. D. Wargo | | | 7,160 | | | | 7,160 | | | | 25,578 | | | | 5,042 | |
(2) | These amounts reflect matching charitable contributions made by Discovery on behalf of Messrs. Beck and S. Miron.
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PROPOSAL 1: ELECTION OF DIRECTORS
Nominees for Election
Our Board consists of nine common stock directors, divided among three classes, and three preferred stock directors. Our Class III directors who are being nominated for reelection at the 2020 Annual Meeting for a term that will expire in 2023, are Robert R. Bennett, John C. Malone and David M. Zaslav. Our Class II directors, who were reelected at the 2019 annual meeting for a term that will expire in 2022, are Paul A. Gould, Kenneth W. Lowe and Daniel E. Sanchez. Our Class I directors, who were reelected at the 2018 annual meeting for a term that will expire in 2021, are Robert R. Beck, Susan M. Swain and J. David Wargo. At each annual meeting, the successors of that class of directors whose terms expire at that meeting are elected to hold office for a term expiring at the annual meeting of Discovery stockholders held in the third year following the year of their election. The directors of each class will hold office until the earliest to occur of their respective death, resignation, removal or disqualification or the election and qualification of their respective successors.
Our Board also includes three preferred stock directors, S. Decker Anstrom, Robert J. Miron and Steven A. Miron, whose terms will expire at the 2020 Annual Meeting. Holders of our SeriesA-1 preferred stock voteserved on the election of each of the preferred stock directors, but do not vote on the election of any common stock director. At each annual meeting of stockholders, the preferred stock directors are elected to hold office for a term expiring at the following annual meeting of stockholders. The preferred stock directors will hold office until the earliest to occur of their respective death, resignation, removal or disqualification or the election and qualification of their respective successors.
Six director nominees will be voted on at the meeting. The three Class III director nominees will be voted upon and elected by the holders of shares of our Series A common stock and Series B common stock, voting together as a class. The three preferred stock director nominees will be voted upon and elected by the holders of shares of our SeriesA-1 preferred stock voting separately as a class.
Unless otherwise instructed on the proxy card, the persons named as proxies will vote the shares represented by each properly executed proxy “FOR” the election as directors of the persons named in this proxy statement as nominees. Each of the nominees has consented to serve if elected. However, if any of the persons nominated by the Board fails to stand for election, or declines to accept election, proxies will be voted by the proxy holders for the election of such other person or persons as the Board may recommend.
The following tables present information, including age, term of office and business experience, for each person nominated for election as a Discovery director at the 2020 Annual Meeting and for those directors whose terms of office will continue after the 2020 Annual Meeting. Each member of our Board and each director nominee possesses skills and experience which makes him or her an important component of the Board as a whole. While consideration of the information presented below regarding each director and director nominee’s specific experience, qualifications, attributes and skills led our Board to the conclusion that he or she should serve as a director, we also believe that all of our directors and director nominees have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to Discovery and our Board.
The Discovery, Inc. Board of Directors recommends a vote “FOR”prior to the electionclosing of the nominated directors.
WarnerMedia Transaction and were then appointed to the Warner Bros. Discovery, Inc. Board of Directors at closing.Director Nominees(2) The aggregate grant date fair value of the RSU awards made to non-employee directors in 2022 was $2,545,392, as calculated in accordance with FASB ASC Topic 718. At December 31, 2022, the non-employee directors held unvested or deferred RSUs as follows:
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| | | | | | | Name | Unvested or
Deferred RSUs | | R. Bennett | 22,324 | | | L. Chen | 16,106 | | | S. Di Piazza | 16,106 | | | R. Fisher | 16,106 | | | P. Gould | 60,114 | | | D. Lee | 16,106 | | | J. Malone | 20,106 | | | F. Merchant | 16,106 | | | S. Miron | 20,106 | | | S. Newhouse | 16,106 | | | P. Price | 16,106 | | | G. Yang | 16,106 | |
(3) Includes a $42,000 retainer for Electionservice as chair of the Independent Transaction Committee which was established in 2021 connection with the WarnerMedia Transaction. The retainer was earned in 2021 and paid in 2022 upon closing of the WarnerMedia Transaction. (4) Includes a $27,500 retainer for service on the Independent Transaction Committee which was established in 2021 connection with the WarnerMedia Transaction. The retainer was earned in 2021 and paid in 2022 upon closing of the WarnerMedia Transaction. (5) This amount reflects a matching charitable contribution made by Holdersthe Company on behalf of Shares of Series A Common Stock and Series B Common Stock as Class III Directors with Terms Expiring in 2023Ms. Price.
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Audit Matters | | | | | | | | | | | | Robert R. Bennett
Born April 19, 1958
| | A common stock director
Proposal 2 Ratification of Discovery since September 2008. Mr. Bennett served as PresidentAppointment of Discovery Holding Company (“DHC”) from March 2005 until September 2008 when it merged with Discovery. Mr. Bennett is the former President and Chief Executive Officer of Liberty Media Corporation (“Liberty Media”). He served in those positions from April 1997 until August 2005. He was one of the founding executives of Liberty Media and served as its Principal Financial Officer from its inception in 1991 until 1997. He currently is Managing Director of Hilltop Investments, LLC, a family investment company. Prior to his tenure at Liberty Media, Mr. Bennett worked with Tele-Communications, Inc. in a variety of financial positions and with The Bank of New York. Mr. Bennett was a director and a member of the Audit Committee of Sprint Corporation from November 2006 until November 2016. He currently serves on the boards of Liberty Media and HP, Inc. Mr. Bennett also serves on the Audit Committee and chairs the Finance, Investment and Technology Committee of HP, Inc.Mr. Bennett brings both industry knowledge and financial acumen to his role as a member of our Board. Mr. Bennett has served on the board of directors of multiple public and private companies over the past decade, which, combined with his considerable involvement with media companies, contributes to the knowledge base and oversight of our Board.
Independent Registered Public Accounting Firm | | | John C. Malone
Born March 7, 1941
| | A common stock directorThe Warner Bros. Discovery, Inc. Board of Discovery since September 2008. Mr. Malone served as Chief Executive Officer and ChairmanDirectors recommends a vote “FOR” the ratification of the Boardappointment of DHC from March 2005 to September 2008 and a director of DHC from May 2005 to September 2008. Mr. Malone has servedPwC as a director of Qurate Retail, Inc. (formerly Liberty Interactive Corporation) (including its predecessors) since 1994 and was its Chairman until March 2018, as Chairman ofWarner Bros. Discovery’s independent registered public accounting firm for the Board of Liberty Media (including its predecessor) since August 2011 and as a director sincefiscal year ending December 2010, and as Chairman of the Board of Liberty Broadband since November 2014. Mr. Malone has served as the Chairman of the Board of Liberty Global since June 2013, having previously served as Chairman of the Board of Liberty Global’s predecessor, Liberty Global, Inc. from June 2005 to June 2013. Mr. Malone has served as Chairman of the Board of GCI Liberty, Inc. since March 2018. Mr. Malone previously served as: (i) Chairman of the Board of Liberty TripAdvisor from August 2014 to June 2015, (ii) a director of Lionsgate from March 2015 to September 2018, (iii) Chairman of the Board of Liberty Expedia Holdings, Inc. from November 2016 to July 2019, (iv) a director of Liberty Latin America from December 2017 to December 2019 (and presently serves as director emeritus) and (v) a director of Charter Communications from May 2013 to July 2018. He also served as a director of Expedia, Inc. from December 2012 to December 2017, having previously served as a director from August 2005 to November 2012. | | | | | Mr. Malone has played a pivotal role in the cable television industry since its inception and is considered one of the preeminent figures in the media and telecommunications industry. Mr. Malone is well known for his sophisticated problem solving and risk assessment skills. His breadth of industry knowledge and unique perspective on our business make him an invaluable member of our Board.31, 2023. |
| | | David M. Zaslav
Born January 15, 1960
| | President, Chief Executive Officer and a common stock director. Mr. Zaslav has served as our President and Chief Executive Officer since January 2007 and as a common stock director since September 2008. Mr. Zaslav served as President, Cable & Domestic Television and New Media Distribution of NBC Universal, Inc. (“NBC”), a media and entertainment company, from May 2006 to December 2006. Mr. Zaslav served as Executive Vice President of NBC, and President of NBC Cable, a division of NBC, from October 1999 to May 2006. Mr. Zaslav is a member of the board of Sirius XM Radio Inc., Grupo Televisa S.A.B and Lionsgate.
As CEO, Mr. Zaslav sets our goals and strategies. His ability as director to add his views to the Board’s deliberations is of significant benefit to the Board.
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Director Nominees for Election by Holders of SeriesA-1 Preferred Stock
| | | S. Decker Anstrom
Born August 2, 1950
| | A preferred stock director of Discovery since December 2012. Mr. Anstrom served as President of Landmark Communications and Chairman of The Weather Channel from 2002 until his retirement in 2008.
Through his experience as a cable television executive, Mr. Anstrom has developed a deep understanding of our industry. Mr. Anstrom’s expertise in the cable television industry makes him a valued presence on our Board.
| | | Robert J. Miron
Born July 7, 1937
| | A preferred stock director of Discovery since September 2008. Mr. Miron has served as Chair of our Board since May 2014. Mr. Miron served as Chairman of Advance/Newhouse Programming Partnership (“Advance/Newhouse”) and Bright House Networks, LLC (“Bright House”), both communications companies, from July 2002, retiring in December 2010. From July 2002 to May 2008, Mr. Miron served as Chief Executive Officer of Advance/Newhouse and Bright House.
Mr. Miron has extensive knowledge of the cable television industry, as evidenced by his professional background. Our Board benefits from Mr. Miron’s long experience in management roles within our industry.
| | | Steven A. Miron
Born April 24, 1966
| | A preferred stock director of Discovery since September 2008. Mr. Miron has served as Chief Executive Officer of Advance/Newhouse since May 2008. Mr. Miron served as Chief Executive Officer of Bright House from May 2008 to May 2016, when it was acquired by Charter. He also served as President of Advance/Newhouse and Bright House from July 2002 to May 2008. Mr. Miron currently serves on the board of directors of Charter.
Through his experience as a cable television executive, Mr. Miron has developed a deep understanding of our industry. Mr. Miron’s expertise in the cable television industry makes him a valued presence on our Board.
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Common Stock Directors:
Class I Directors with Terms Expiring in 2021
| | | Robert R. Beck
Born July 2, 1940
| | A common stock director of Discovery since September 2008. Since 2001, Mr. Beck has served as an independent consultant, advising on complex financial and business matters. Prior to 2001, Mr. Beck served as a Managing Director of Putnam Investments.
Mr. Beck applies his expertise in the financial markets to the Board’s deliberations. Mr. Beck’s deep experience in corporate finance is of great value to our Board.
| | | Susan M. Swain
Born December 23, 1954
| | A common stock director of Discovery since December 2016. In March 2012, Ms. Swain was namedCo-CEO and President ofC-SPAN, a multichannel national distributor (TV, radio, internet) of public affairs content. She had served as President andCo-Chief Operating Officer ofC-SPAN since December 2006. Ms. Swain also serves as an officer of National Cable Satellite Corporation, as a Director of theC-SPAN Education Foundation and as a member of the Executive Committee of the National Press Foundation.
Ms. Swain brings her Board and committee work experience in the areas of national media, leadership of large organizations, and multichannel operations. Ms. Swain’s expertise in building and managing a national brand and in strategic planning, with a special emphasis on the national broadband transition, adds to the breadth of experience and expertise of our Board.
| | | J. David Wargo
Born October 1, 1953
| | A common stock director of Discovery since September 2008. Mr. Wargo served as a director of DHC from May 2005 to September 2008 when it merged with Discovery, Inc. Mr. Wargo has served as President of Wargo & Company, Inc., a private investment company specializing in the communications industry, since January 1993. Mr. Wargo is a director of Liberty Global plc, Liberty TripAdvisor Holdings (“Liberty TripAdvisor”), Liberty Broadband and Vobile Group Limited. Mr. Wargo also serves on the Audit Committees of Liberty Global, Liberty TripAdvisor, Liberty Broadband and Vobile Group Limited.
Having an extensive career in public company finance, Mr. Wargo brings to the Board significant business development and financial experience related to the business and financial issues facing large corporations. Mr. Wargo’s expertise in public company finance is the result of over 40 years as a securities analyst.
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Class II Directors with Terms Expiring in 2022
| | | Paul A. Gould
Born September 27, 1945
| | A common stock director of Discovery since September 2008. Mr. Gould served as a director of DHC from May 2005 to September 2008, when DHC merged with Discovery. Mr. Gould has served at Allen & Company Incorporated, an investment banking services company, since 1972, including as a Managing Director and Executive Vice President for more than the last five years. Mr. Gould has served as a financial advisor to many Fortune 500 corporations and advised on a number of large media company acquisitions. Mr. Gould served on the Board of Ampco-Pittsburgh until May 2018. Mr. Gould is a director at Liberty Global and is the chair of its Audit Committee and a member of its Nominating and Corporate Governance Committee. Mr. Gould is also a director at Liberty Latin America, Ltd., and is chair of its Audit Committee and a member of its Nominating and Corporate Governance Committee.
Mr. Gould brings to our Board a wealth of experience in matters relating to public company finance. Mr. Gould’s knowledge of our Company and our industry, combined with his expertise in finance, makes him an important part of our Board.
| | | Kenneth W. Lowe
Born April 7, 1950
| | A common stock director of Discovery since March 2018. Mr. Lowe served as Chairman, President and Chief Executive Officer of Scripps Networks Interactive, Inc. (“Scripps Networks”) from July 2008 until March 2018, when Scripps Networks merged with a wholly owned subsidiary of Discovery. Prior to that Mr. Lowe served as President and Chief Executive Officer of The E.W. Scripps Company from October 2000 to June 2008. Mr. Lowe served as President and Chief Operating Officer of The E.W. Scripps Company from January 2000 to September 2000. | | | | | Through his experience as a media executive, Mr. Lowe has developed a deep understanding of our industry. Mr. Lowe’s expertise in the media industry and experience as a public company executive makes him a valued addition to our Board. | | | Daniel E. Sanchez
Born February 8, 1963
| | A common stock director of Discovery since May 2017. From January 2007 to January 1, 2020, Mr. Sanchez engaged in the private practice of law, representing individual and business clients in a variety ofnon-litigation areas. In 2012, Mr. Sanchez earned his master’s degree in tax law (LL.M.), and focused his practice on the area of tax planning. He served as a director of Starz from January 2013 until December 2016, when it merged with Lions Gate Entertainment Corporation (“Lionsgate”), and a director of Lionsgate from June 2018 to the present. Mr. Sanchez became a director of Liberty Latin America Ltd. in December 2019. Mr. Sanchez is the nephew of John C. Malone.
Mr. Sanchez brings a unique legal perspective to our Board, focused in particular on tax law. Mr. Sanchez’s perspective and expertise assists the Board in developing strategies that take into consideration a wide range of issues resulting from the application and evolution of tax laws and regulations.
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Except for Steven A. Miron being the son of Robert J. Miron and Daniel E. Sanchez being the nephew of John C. Malone, there is no family relationship among any of Discovery’s executive officers or directors, by blood, marriage or adoption.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
As provided in its charter, the Audit Committee appoints our independent registered public accounting firm, reviews the scope of the annual audit andpre-approves all audit andnon-audit services permitted under applicable law to be performed by the independent registered public accounting firm. The Audit Committee has evaluated the performance of PwC and hasre-appointed them as our independent registered public accounting firm for the 20202023 fiscal year. You are requested to ratify the Audit Committee’s appointment of PwC. Representatives of PwC are expected to attend the virtual 20202023 Annual Meeting and will be given the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions from stockholders present at the meeting. Unless stockholders specify otherwise in their proxy, proxies solicited by the Board will be voted by the proxy holders at the 20202023 Annual Meeting to ratify the appointment of PwC as our independent registered public accounting firm for the 20202023 fiscal year. The affirmative vote of a majority of the combined voting power of the outstanding shares of Series A common stock, Series B common stock and SeriesA-1 preferred stock present virtually or represented by proxy at the meeting and entitled to vote at the 20202023 Annual Meeting on this proposal is required for ratification. Even if the selection of PwC is ratified, our Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that a change would be in the best interests of Discoverythe Company and its stockholders. In the event DiscoveryWBD stockholders fail to ratify the appointment of PwC, the Audit Committee will take this into consideration regarding the selection of another independent registered public accounting firm. The Discovery, Inc. Board of Directors recommends a vote “FOR”
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Audit Firm Fees and Services | | | | | | | | | | | | | 2,022 | | 2,021 | | Audit fees(1) | $ | 28,720,000 | | | $ | 9,828,000 | | Audit related fees(2) | 214,000 | | | 73,000 | | Tax fees(3) | 3,671,000 | | | 190,000 | | All other fees(4) | 15,000 | | | 17,000 | | | Total fees | $ | 32,620,000 | | | $ | 10,108,000 | |
(1)Audit fees include fees for the ratificationaudit of the appointmentconsolidated financial statements of PwCWarner Bros. Discovery and statutory audits for certain of Warner Bros Discovery’s foreign subsidiaries and joint ventures as Discovery’s independent registered publicwell as fees for services provided in connection with securities and debt offerings. (2)Audit-related fees include due diligence related to mergers and acquisitions, attest services not required by statute or regulation, and consultations regarding financial accounting firmand reporting requirements. (3)Tax fees consist of tax compliance and consultations regarding the tax implications of certain transactions, transfer pricing and consultation services. Tax compliance services relate to preparation or review of tax returns, including corporate income tax, indirect tax, withholding tax and expatriate tax services. Tax consultation services relate to tax planning, assistance with tax audits, and tax advice related to acquisitions and structure. Transfer pricing services relate to advice and assistance with respect to transfer pricing matters, including the preparation of reports used to comply with taxing authority documentation requirements. (4)Other fees consist of training sessions and certain membership fees for the fiscal year ending December 31, 2020.accounting and industry reference materials. Description of Fees
| | | | | | | | | | | | 2019 | | | 2018 | | Audit fees(1) | | $ | 12,053,000 | | | $ | 12,823,150 | | Audit related fees(2) | | | 185,000 | | | | 406,850 | | Tax fees(3) | | | 870,000 | | | | 1,142,201 | | All other fees(4) | | | 53,000 | | | | 152,963 | | | | | | | | | | | Total fees | | $ | 13,161,000 | | | $ | 14,525,164 | | | | | | | | | | |
(1) | Audit fees include fees for the audit of the consolidated financial statements of Discovery and statutory audits for certain of Discovery’s foreign subsidiaries and joint ventures as well as fees for services provided in connection with securities and debt offerings.
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(2) | Audit-related fees include due diligence related to mergers and acquisitions, attest services not required by statute or regulation, and consultations regarding financial accounting standards.
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(3) | Tax fees consist of tax compliance and consultations regarding the tax implications of certain transactions, transfer pricing and consultation services. Tax compliance services relate to preparation of tax returns and claims for refunds. Tax consultation services relate to tax planning, assistance with tax audits, and tax advice related to acquisitions and structure. Transfer pricing services relate to advice and assistance with respect to transfer pricing matters, including the preparation of reports used to comply with taxing authority documentation requirements.
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(4) | Other fees consist of certain membership fees for accounting and industry reference materials.
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The Audit Committee has considered whether the provision of services by PwC to DiscoveryWBD, other than auditing, is compatible with PwC maintaining its independence and believes that the provision of such other services is compatible with PwC maintaining its independence. Policy on
Audit Committee Pre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm Procedures The Audit Committee has adopted a policy regardingprocedures for the pre-approval of all audit and permissible non-audit services provided by Discovery’sWBD’s independent registered public accounting firm. Pursuant to this policy,In accordance with its procedures, the Audit Committee has approved the engagement of Discovery’sWBD's independent registered public accounting firm to provide the following services (all of which are collectively referred to as “pre-approved “pre-approved services”): ■audit services, as specified in the policy, including (i) financial audits of DiscoveryWBD and its subsidiaries and (ii) services associated with Discovery’sWBD’s periodic reports, registration statements and other documents filed or issued in connection with securities offerings (including comfort letters and consents); ■audit-related services, as specified in the policy, including (i) due diligence services, (ii) financial audits of employee benefit plans, (iii) attestation services not required by statute or regulation, (iv) certain audits incremental to the audit of Discovery’sWBD’s consolidated financial statements; (v) closing balance sheet audits related to dispositions; and (vi) consultations with management as to accounting or reporting of transactions; and ■tax services, as specified in the policy, including federal, state, local and international tax planning, compliance and review services and tax due diligence and advice regarding mergers and acquisitions. Notwithstanding the foregoing generalpre-approval, any individual project involving the provision ofpre-approved services that is expected to result in fees in excess of $50,000 requires the specificpre-approval of the Audit Committee. In addition, any
Any engagement of Discovery’sWBD’s independent registered public accounting firm for services other than thepre-approved services requires the specific approval of the Audit Committee. TheIn 2022, the Audit Committee has delegated the authority for the foregoing approvals to the chairChair of the Audit Committee to approve up to $150,000 of audit, audit-related, tax or permitted non-audit services per transaction, subject to the subsequent disclosure to the entire Audit Committee of the granting of any such approval. All audit, audit-related tax and permitted non-audit services provided by PwC in 20192022 were approved by the Audit Committee. Discovery’spre-approval policyCommittee or its Chair.
WBD prohibits the engagement of Discovery’sits independent registered public accounting firm to provide any services that are subject to the prohibition imposed by Section 201 of the Sarbanes-Oxley Act. REPORT OF THE AUDIT COMMITTEE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Audit Committee Report Each member of the Audit Committee is an independent director as determined by the Board, based on the rules of the Nasdaq Stock MarketRules and the criteria of director independence adopted by the Board. Each member of the Audit Committee also satisfies the SEC’s independence requirements for members of audit committees. The Audit Committee reviews Discovery’sWBD’s financial reporting process on behalf of the Board. A description of the responsibilities of the Audit Committee is set forth above under the caption “Corporate Governance—Committees of the Board—Board Committee Structure—Audit Committee.” PwC, Discovery’sWBD’s registered public accounting firm for 2019,2022, is responsible for expressing opinions on the conformity of Discovery’sWBD’s audited consolidated financial statements with U.S. generally accepted accounting principles. The Audit Committee has reviewed and discussed with management and PwC Discovery’sWBD’s most recent audited consolidated financial statements. The Audit Committee has also discussed with PwC various communications that the Company’s registered public accounting firm is required to provide to the Audit Committee, including matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB and the SEC and has discussed with PwC their independence. Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in Discovery’sWBD’s Annual Report on Form 10-K for the year ended December 31, 2019,2022, filed on February 27, 202024, 2023 with the SEC. This report is respectfully submitted by the members of the Audit Committee of the Board. Paula A. Price,Chair
Robert R. Bennett
Fazal Merchant | J. David Wargo, Chair | | | | | S. Decker Anstrom2023 PROXY STATEMENT | 43 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Susan M. SwainProxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Executive Compensation REPORT OF THE COMPENSATION COMMITTEE
Compensation Committee Report The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on such review and discussion, has recommended that the Compensation Discussion and Analysis be included in this proxy statement. This report is respectfully submitted by the members of the Compensation Committee of the Board. Paul A. GouldChair
Richard W. Fisher
Steven A. Miron
Geoffrey Y. Yang Compensation Discussion and Analysis | Robert J. Miron, Chair | Robert R. Beck | Paul A. Gould | Kenneth W. Lowe |
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) analyzes and discusses our executive compensation programs and provides information about the compensation we paid to our CEO, Chief Financial Officer (“CFO”), and the three other most highly compensated executive officers duringwho were serving as executive officers at fiscal 2019year end (December 31, 2022) (collectively with the CEO and CFO, the “Named Executive Officers” or “NEOs”). The Compensation Committee (referred to in this CD&A as the “Committee”) of the Board oversees all aspects of NEO compensation. The 20192022 NEOs are: David M. Zaslav, President and CEO;
Bruce L. Campbell, Chief Development, Distribution & Legal Officer;
Jean-Briac Perrette, President and CEO, Discovery International; and
Peter Faricy, CEO, GlobalDirect-to-Consumer.
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| | Page | | | 2019 Highlights
David M. Zaslav, President and Chief Executive Officer | Gunnar Wiedenfels, Chief Financial Officer | Bruce L. Campbell, Chief Revenue and Strategy Officer | 28Jean-Briac Perrette, President and CEO, Global Streaming and Games | Gerhard Zeiler, President, International |
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2019 HIGHLIGHTS
Discovery is a leading global media and entertainment company. We delivered solid financial performance in 2019, reporting increases in revenue, adjusted operating income before depreciation and amortization (“Adjusted OIBDA”), adjusted earnings per share and free cash flow.
In 2019, we achieved exceptional operating results, including:
Launched HGTV and Food Network in more than 30 new countries and territories combined as we continued to execute on our strategy to grow the global reach of the networks and brands we acquired as part of Scripps Networks;
Increased total share of viewing for our top 10 international markets;
Established a strong foothold across existing and newdirect-to-consumer platforms, including Food Network Kitchen, DPlay in Europe and the suite of Discovery Go apps; and
Provided a portfolio of U.S. networks that was the most-watched pay TV portfolio in the U.S. among women25-54 and 18 and older for both primetime and total day viewing.
In 2019, we also took significant steps to advance Discovery as a differentiated global content company and continued to integrate the Scripps Networks acquisition, streamline our enterprise and achieve significant cost savings, all of which are key components of our efforts to transform our business (referred to herein as “transformation”). Our talented executive team, including the NEOs, played a key role in driving these results.
Our financial performance in 2019 exceeded thepre-established performance goals set by the Committee for cash bonuses and Incentive Compensation Plan (“ICP”) awards, and our performance over the performance periods which ended in 2019 exceeded thepre-established quantitative performance goals set by the Committee for the Performance-Based Restricted Stock Units (“PRSUs”) granted by the Committee in prior years. As a result, the Committee approved 2019 cash bonuses for the CEO and CFO at 99% and 100% of target, respectively, funded the corporate ICP at 106.5% of target, and certified the vesting at 100% for PRSUs with performance periods that ended in 2019.
COMPENSATION PRACTICES
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Compensation Philosophy & Practices Compensation Philosophy Our compensation philosophy is to pay for performance, to encourage excellence, retain our high-performing executive talent across the blended organization and to reward executives who deliver. Our programs are designed to provide above-median total direct compensation when our executives deliver above-median performance, as evaluated against both internally set objectives and the peer group companies. We value fixed-term employment agreements when appropriate, and, in 2019, each of our NEOs was subject to a fixed-term employment agreement, as further described under “NEO Employment Agreements” beginning on page 34. The terms of these agreements generally incorporate initial compensation elements, including a base salary, annual cash bonus target, and “sign on” or contract renewal equity awards. The Committee approves the terms of employment agreements consistent with our overall compensation philosophy, taking into account appropriate compensation elements to secure the services of our senior executives for multi-year terms.Our executive compensation programs are designed to implement ourpay-for-performance compensation philosophy, as follows:
ensure a strong alignment of the interests of our stockholders and employees;
| | | | | | | | | Our executive compensation programs are designed to implement our pay-for-performance compensation philosophy, as follows: ■ensure a strong alignment of the interests of our stockholders and employees; ■pay for performance, both short-term and long-term; ■pay competitively, across salary grades and geographies; and ■apply compensation policies in an internally consistent manner. |
pay for performance, both short-term and long-term;
pay competitively, across salary grades and geographies; and
apply compensation policies in an internally consistent manner.
As part of this design, the Committee is regularly provided with information regarding theour program design, bonus targets and equity grant guidelines for our employees across our company.targets. The Committee reviews the results of the annual bonus and equity grant processes to assess whether we are effectively implementing ourpay-for-performance philosophy. The Committee determines the group of executives over which it will retain oversight, andwhich includes executive officers and other seniorall of our executives in additionwhom the Board has determined to be "officers" as defined by Exchange Act Rule 16a-1(f) (such executives are referred to collectively as "Section 16 Officers"). All of our NEOs in those reviews. are Section 16 Officers. We believe that our executive compensation program plays a key role in our operating and financial success. We place great importance on our ability to attract, retain, motivate and reward talented executives who can continue to grow our business and engage audiences around the world. We seek to design compensation packages for individual executives based on the scope of the executive’s responsibilities, the executive’s proven performance, and a determination of what is competitive compensation in the market for similar roles, if such data areis available. We continue to refine our compensation programs to strengthen the link between pay and performance and to effectively balance executive and stockholder interests. See "Looking Ahead: 2023 Executive Compensation Program" for details on changes we have made to our executive compensation program. The Committee seeks to deliver the majority of target total direct compensation for each NEO in performance-based pay, with the balance between the annual cash bonus and long-term incentiveLTI awards determined by the Committee as appropriate for each role. Approximately 93%92% of the CEO’s 20192022 target total direct compensation was performance-based and approximately 70% of the 2022 target total compensation for our other NEOs was performance-based. The Committee awardshas typically awarded a significant portion of each NEO’s performance-based compensation in the form of long-term incentiveLTI awards, including stock options and, for the CEO, PRSUs. The Committee believes the use of stock options and PRSUs aligns the interests of our NEOs with our stockholders and will motivate the NEOs to achieve the Company’sour business goals and strategies and increase stockholder value. The bulk of our CEO’s compensation is in the form of equity awards tied to Discovery’s stock performance. The current employment agreement with our CEO (described below under “NEO Employment Agreements—CEO Employment Agreement” beginning on page 34) provides for a large upfront award of stock options, which was made in July 2018 at the time the agreement was executed. The stock option award is divided into five separate grants with increasing grant prices and staggered vesting, meaning that the awards require sustained and substantial increases in stock price to deliver value.We believe the mix of compensation for our NEOs is competitive with the compensation practices specific to our industry and appropriately balanced to benefit the CompanyWBD in both the short- and long-term so as not to encourage our NEOs to take undue risks. When determining compensation payouts for 2022 performance, the Committee considered that 2022 was an extraordinarily complex year which included the closing of a transformational acquisition, extensive post-closing adjustments and integration activities, and a challenging macroeconomic environment with considerable pressure on the media and entertainment industry. In spite of these complexities, the Committee believed our CEO and NEOs delivered outstanding performance in 2022, as evidenced by WBD's delivery of our external guidance and performance against the financial and strategic metrics established by the Committee for 2022 cash bonus awards and LTI awards. The Committee believes the 2022 compensation to our CEO and NEOs is commensurate with WBD's performance, recognizes their exceptional leadership during a challenging year and is aligned with our pay-for-performance philosophy. Annual cash bonus awards are more fully described in “NEO Compensation in 2019—2022—Annual Cash Bonus Awards,” beginning on page 41,52, and our long-term incentiveLTI compensation program is more fully described in “NEO Compensation in 2019—2022—Long-Term Incentive Compensation,” beginning on page 51.57.
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Long-Term Employment Contracts We value fixed-term employment agreements when appropriate. We believe that entering into fixed-term employment contracts with our senior executives provides management stability and helps ensure that we can access their services to drive our strategic objectives.objectives over the mid- to long-term. In 2022 , each of our NEOs was subject to a fixed-term employment agreement. The terms of these agreements generally incorporate initial compensation elements, including a base salary, annual cash bonus target, and annual equity target. We also may make special “sign on” equity awards from time-to-time, typically to replace equity that an executive left behind when leaving another organization to join WBD. In the case of promotions, we may award additional equity to reflect the increase in the executive's responsibilities, or to bring the executive's total target direct compensation in line with executives in similar roles at peer companies. The Committee approves the terms of employment agreements consistent with our overall compensation philosophy, taking into account appropriate compensation elements to secure the services of our senior executives for multi-year terms. When permitted by local law, these agreements also include customary restrictive covenants that protect our business from unfair competition after an executive separates from employment. Each of our NEOs was subject to a fixed-term employment contract during 2019. Each of these agreements includes a number of provisions related to components of compensation during the term of the agreement, as further detailed below under “NEO Employment Agreements,” beginning on page 34.with us. COMPENSATION DECISION MAKING
Compensation Decision Making Role of the Compensation Committee The Committee operates pursuant to a written charter, a copy of which is posted onto the Investor Relations section of our corporate websitehttps://corporate.discovery.com at ir.wbd.com. The Committee is responsible for developing, implementing and regularly reviewing adherence to our compensation philosophy. In fulfilling these responsibilities, the Committee: ■regularly reviews best practices and market trends in executive compensation and modifies our programs, as the Committee deems appropriate, to support our business goals and strategies; ■conducts an annual risk assessmentsassessment of our compensation programs; ■aligns compensation decisions with our corporate objectives and strategies; ■reviews and approves the amounts and elements of compensation and the terms of new employment agreements or extensions to existing employment agreements for our CEO, other NEOs and other NEOs, other executive officersSection 16 Officers; and certain other key employees; and ■approves the annual quantitativefinancial and qualitativestrategic goals relevant to the compensation of our CEO and CFO, and the bonus design and metrics for our NEOs and other executive officers. Section 16 Officers.The Committee regularly consults with the Board regarding compensation decisions for the CEO, including the terms and structure of the CEO’s employment agreement.agreement, and reports out to the Board on its annual compensation decisions for the CEO. Role of the CEO in Compensation Decisions The CEO plays a significant role in the compensation decisions for the other NEOs other than himself.and Section 16 Officers. The CEO makes annual recommendations to the Committee regarding base salary, annual cash bonus, and long-term incentiveLTI awards for each of his direct reports,the Section 16 Officers, including the other NEOs. The CEO also recommends to the Committee proposed terms of new employment agreements and amendments to existing agreements for the other NEOs, working closely with Adria Alpert Romm, our Chief People and Culture Officer, (formerly our Chief Human Resources and Diversity Officer), to develop these recommendations. The CEO’s recommendations are based on: ■his assessment of qualitativevarious strategic and quantitativefinancial factors, generally including the executive’s annual and
long-term performance; performance as documented in detailed self-assessments prepared by the executive and performance reviews prepared by the CEO;■our enterprise-wide performance, as well as that of the departmentline of business or groupfunction that the executive leads; leads or provides services to;■the executive’s compensation relative to that of our other executives (internal equity); ■the executive’s compensation relative to that of executives in similar roles at the companies in our peer group (external competitiveness);
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■our overall approach to compensation for employees for the year; and achievement of applicable annual performance goals; and
■contractual obligations under the executive’s employment agreement. The CEO also provides the Committee with proposed strategic goals for himself. The Committee reviews and modifies these goals to ensure that they align with the approved strategies and priorities set by the Board and then discusses the revised goals with the CEO, including the weightings to reinforce which goals have the greatest priorities for the year. The degrees to which the CEO achieves the goals are used, in part, to determine the annual bonus and, in part, the vesting of the CEO.his annual PRSU awards. The CEO provides his own assessment of his performance and achievement of goals but does not otherwise participate in the Committee’s deliberations or decisions regarding his annual compensation. Relationship with and Role of the Independent Compensation Consultant The
During 2022, the Committee has retained antwo independent compensation consultant,consultants - Pay Governance LLC ("Pay Governance") and The Croner Company (“Croner”), - to advise it on compensation matters generally and specifically on compensation decisions for our executive officers.Section 16 Officers. Croner had served as independent compensation consultant to Discovery, Inc. for several years prior to the WarnerMedia Transaction. After the closing of the WarnerMedia Transaction in April 2022, the Committee interviewed several potential compensation consultants and determined that it would engage Pay Governance as the independent compensation consultant for WBD. The Committee continued to retain Croner throughout 2022 and up through the date of filing of this proxy statement for purposes of continuity and historical perspective. It is expected that Croner will cease to serve as an independent compensation consultant to the Committee following the filing of this proxy statement. Pay Governance and Croner are each retained directly by, and reportsreport to, the Committee. Croner attended all seven Committee meetings held in 2019.Pay Governance and Croner assisted the Committee by providing the following services, among others: ■assisting in peer group selection and competitive benchmarking for executive officers and other senior executives used in the annual salary review, bonus and long-term incentive decisions; ■advising the Committee on competitive and best practices, including executive compensation trends, performance measures, and annual cash bonus and long-term incentive plan designs; ■advising on employee equity grants, executive employment agreements and other executive compensation matters; ■assisting the Committee with the periodic review of its charter; ■providing an evaluation and assessment of risk in compensation program design, policies and procedures; ■reviewing this CD&A; and ■benchmarking director compensation for Board and committee service. Prior to initially being engaged by the Committee in 2010, Croner historically had provided management with compensation survey data and performed custom surveys on industry compensation practices. In 2011, the Committee adopted a Compensation Consultant Independence Policyguidelines to address the ongoing need for this survey work and to determine the process under which work by Croner for management would be permitted. The Committee authorized Croner to provide survey services to management of up to $60,000 per year. Non-survey work, or survey work that exceeds $60,000 in the aggregate in a single year, requires pre-approval by the Committee. In 2019,2022, the only services provided by Croner to management were the pre-authorized survey services. The total fees we paid to Croner in 20192022 (other than fees for Croner’s services to the Committee) were less than $15,000.$60,000. The Committee annually reviews its relationship with Croner as anany engaged independent compensation consultant to determine if Croner has any conflictconflicts of interest exist in itstheir provision of services to the Committee. The Committee also regularly conducts independence reviews for any current or newly engaged compensation consultant. In the 2019its 2022 review, after considering the factors set forth in the applicable securities regulations and stock exchange rules, the Committee concluded that neither Pay Governance nor Croner did not havehad a conflict of interest with respect to the services it providesthey provide to the Committee. The Committee’s conclusion was based on the following: ■Pay Governance and Croner reportsreport solely to the Committee. Our management is not involved in the negotiation of fees charged by Cronereither firm or in the determination of the scope of work performed by Croner.either firm. The Committee has the sole authority to hire and terminate theany independent compensation consultant;
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■there are no business or personal relationships between Pay Governance or Croner and any member of the Committee or any executive officer of the Company; ■the Committee has a Compensation Consultant Independence Policyguidelines to address limited survey work performed by Croner for the Company, and any othernon-survey services that are proposed to be performed by Croner for the Company; ■the survey work performed by Croner was very limited, and nonon-survey work was performed by either firm (other than Croner’s services for the Committee); according to data provided by Croner, ■revenue from DiscoveryWBD (other than fees for Croner’s services to the Committee) represented less than 1% of Croner’seach of Pay Governance's and Croner's total revenue for 2019,2022, and for each of the previous fiscal years in which Croner served as independent consultant to the Committee;
■Pay Governance and Croner disclosed itstheir respective conflicts of interest policypolicies to the Committee. The Committee believes that this policy providesthese policies provide reasonable assurance that conflicts of interest with Croner will not arise; and ■Pay Governance and Croner hashave each represented to the Committee that, per itstheir respective conflicts of interest policy,policies, neither Cronerfirm nor any Croner employeeof its respective employees is a DiscoveryWBD stockholder.
Compensation Decisions Framework The Committee generally makes decisions in the first 90 days of the calendar year regarding annual adjustments to base salary (“Annual Base Salary Review”), the payout amount for annual cash bonus awards with respect to the immediately preceding year (“Annual Bonus Review”), and annual long-term incentive (“LTI”)LTI awards (“Annual LTI Review”) for our executive officers. This annual process includes a review of the following factors, designed to align the Committee’s compensation actions with our compensation principles and objectives: ■executive compensation market data from the Company’sour peer group (discussed below); ■relevant employment contract requirements; ■self-evaluation of each NEO’s annual performance; ■the CEO’s evaluation of each NEO’s annual performance (other than Mr. Zaslav himself); ■achievement of annual quantitativefinancial goals forunder the ICP, the annual cash bonus program that applies to the NEOs other than the CEO and CFO; and■achievement of quantitativefinancial and qualitativestrategic goals that are set by the Committee each year for the annual cash bonus for the CEO and CFO;CFO and our performance relative the PRSU awards to peer companies across a number of comparative financial measures, as discussed below.
the CEO.These factors are considered as a whole, with no specific weight given to any particular factor or factors. Additional detail about the factors considered in the Committee’s compensation decisions is provided throughout this CD&A.
Peer Group Analysis Comparative Financial Review, Target Pay Positioning and Tally Sheets
The Committee annually reviews data from a group of publicly-traded peer companies to support compensation decisions for the NEOs. The peer companies are chosen by the Committee to best match our scope of business in terms of revenues, free cash flow, market capitalization and enterprise value, complexity of operations and global scope, as well as proximity to the sectors of the media and entertainment industry in which we operate. The peer group also represents meaningful competition for us in the executive labor market. The Committee reassesses this list annually and considers the inclusion of new, relevant peers, and the elimination of companies from the peer group that no longer provide a strong basis for comparison (including removing peers that have been acquired or otherwise materially have changed their corporate structure). The
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Due to the then-pending WarnerMedia Transaction, the Committee useddid not make any changes to the peer group set forth belowor international peer group for purposes of its February 2022 compensation review and decisions. In May 2022, following the closing of the WarnerMedia Transaction, the Committee reviewed the peer group to determine which companies should be used to help inform compensation decisions for the 2019 Annual Base Salary Review and 2019 Annual LTI Review and other compensation decisions made in December 2018 and February 2019 (the “2019 Peer Group”). The Committee concluded thatnew combined company. For this group provided a good mix of companies with a strong focus on content and international reach. As part of its December 2018 and February 2019 review, the Committee used the most recently-available proxy statement compensation data for the 2019 Peer Group,at that time, which was, in most cases, from proxy statements filed during the first half of 2018, prior2022, as well as additional survey data provided to it by its compensation consultants. As a result of this review, the mergerCommittee took the following actions: ■removed AMC Networks, Inc., Lions Gate Entertainment Corp. and Sirius XM Holdings Inc. from the peer group as the Committee no longer believed these companies were appropriate comparators for an enterprise with the size and scope of operations of WBD; ■added Comcast Corporation and Meta Platforms, Inc. due to their comparable business operations, global reach and status as competitors in the executive labor market; and ■retained Activision Blizzard, Inc., Charter Communications, Inc., Electronic Arts Inc., Fox Corporation, Liberty Global plc, Netflix, Inc., Paramount Global and The Walt Disney Company as the Committee continued to believe this group of companies were appropriate comparators for WBD due to their strong focus on content, similar lines of business and 21st Century Fox in March of 2019 andinternational reach. The Committee used the merger of CBS Corporation and Viacom Inc. in December 2019. 20192022-2023 Peer Group
21st Century Fox
Activision Blizzard, Inc.
AMC Networks Inc.
CBS Corporation
Charter Communications, Inc.
Lions Gate Entertainment Corp.
Netflix, Inc.
The Walt Disney Company
Viacom Inc.
In December 2019, ("WBD Peer Group") set forth below for the new employment contracts entered into with the NEOs in 2022, as well as the 2022 Annual Base Salary Review and 2022 Annual LTI Review and other compensation decisions made in the fall of 2022 and in February 2023. Where appropriate, the Committee reviewed the 2019 Peer Group and determined that it would add Fox Corporation and Liberty Global to the peer group for purposes ofalso used survey data provided by its 2020 compensation review and decisions.
The Committee also reviewsconsultants or publicly available data from internationalcertain other companies in an effort to identify relevant market data for Mr. Perrette’s role as leader of our international division. The Committee reviewed a group of media and content companies publicly traded in the United Kingdom (“U.K.”) and determined that a mix of traditional media, broadcasting, and publishing companies would be relevant comparators. For 2019, the Committee selected WPP Group, Sky PLC, RELX Group, Pearson, ProSiebenSat.1 MediaSE, Informa, and Vivendi SA (the “2019 International Peers”) to serve as a reference point in assessing Mr. Perrette’s compensation and reviewed compensation data for the CEOs of that group, applying a 30% discount to factor in Mr. Perrette’s role as a division president rather than CEO of a standalone entity. The Committee determined that 30% was a reasonable amount to discount the market data given the difference between leading a division and a company as a whole. In December 2019, the Committee reviewed the 2019 International Peers and determined that it would remove Sky PLC from the international peer group due toinform its acquisition by Comcast Corporation, and would add ITV PLC to the international peer group for purposes of its 2020 compensation review and decisions.
Comparative Financial Review
Each year, the Committee reviews our financial performance relative to the peer group. In conducting this assessment, the Committee reviews our revenue, Adjusted OIBDA, free cash flow, enterprise value, earnings per share and TSR performance (the “Comparative Financial Measures”) as compared to the peer group. The Committee uses publicly-available data for its analysis, which include the impact, positive or negative, of acquisitions and divestitures by all companies in the analysis, including Discovery. The Committee conducted this review in December 2019 in assessing whether to make a discretionary downward adjustment of the payout amount for the PRSU awards to Messrs. Campbell and Perrette granted in 2017 that were based on performance over the three-year period ended December 31, 2019 and scheduled to vest and pay out in February 2020.
Comparative Financial Measures Reviewed in December 2019
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Affiliate
Revenues | | | Advertising
Revenues | | | Total
Revenues | | | Adjusted
OIBDA | | | Free Cash
Flow | | | Enterprise
Value | | | Earnings
Per Share | | | TSR | | | | | CAGR(1) | | | CAGR(1) | | | CAGR(1) | | | CAGR(1) | | | CAGR(1) | | | CAGR(1) | | | CAGR(1) | | | 3 Year | | Median (excluding Discovery) | | | 6.8 | % | | | -1.1 | % | | | 3.4 | % | | | 2.2 | % | | | -6.1 | % | | | -10.4 | % | | | 29.2 | % | | | -16.4 | % | Discovery | | | 14.2 | % | | | 26.6 | % | | | 19.5 | % | | | 25.5 | % | | | 30.7 | % | | | 10.2 | % | | | 10.2 | % | | | 3.4 | % | Discovery Percentile Rank Among Peers | | | 100 | % | | | 100 | % | | | 86 | % | | | 71 | % | | | 100 | % | | | 71 | % | | | 20 | % | | | 71 | % |
(1) | CAGR = Compound Annual Growth Rate. Utilizes December 31, 2016 data for starting data point and TTM for the end data point. TTM = Trailing Twelve Months (October 1, 2018 – September 30, 2019). TTM was utilized because year end 2019 data was not yet available.
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Based on its review and our performance relative to peers, the Committee determined not to make a discretionary downward adjustment of the payout amount for the PRSU awards to Messrs. Campbell and Perrette granted in 2017 that were based on performance over the three-year period ended December 31, 2019 and scheduled to vest and pay out in February 2020.
Target Pay Positioning
The Committee generally targets executive compensation to be between the median and 75th percentile of the compensation paid by our peer group companies. The Committee uses the applicable peer group benchmark and survey data as a reference rather than as a strict guide for compensation decisions and retains flexibility in setting individual target total direct compensation. The Committee may set compensation at or below median for executives who are new to Discovery, to allow delivery of compensation over time that rewards sustained performance. This was the case with the compensation for Mr. Wiedenfels, who joined Discovery in 2017. Similarly, the Committee may set compensation above the 75th percentile to retain, motivate and reward the high-caliber executives we need to lead our business.
In December 2018 and again in February 2019, prior to making any decisions with respect to 2019 base salariesspecific roles, such as for Gerhard Zeiler, our President, International or long-term incentive awards, the Committee reviewed market data for each NEO, as compared toJB Perrette, our 2019President and CEO, Global Streaming and Games.
2022-2023 Peer Group. In this review, the Committee compared each executive’s compensation to that of the corresponding position in the peer group. The Committee undertook this review to aid it in making base salary and long-term incentive decisions for 2019. The comparison to our peer group, both at target prior to the Committee’s February 2019 actions and actual pay after the Committee’s February 2019 actions, was as follows:Group | | | | | | | | | NEO
Activision Blizzard, Inc. (ATVI) | Electronic Arts Inc. (EA) | Target Pay Against 2019 Peer Group
(Before Feb 2019
Compensation Actions) | | Actual Pay Against 2019 Peer Group
(After Feb 2019
Compensation Actions)Netflix, Inc. (NFLX) | Mr. ZaslavCharter Communications, Inc. (CHTR) | Fox Corporation (FOX) | Above 75th percentile | | Above 75th percentileParamount Global (PARA) | Mr. WiedenfelsComcast Corporation (CMCSA) | Liberty Global plc (LBTYA) | Below median | | Below medianThe Walt Disney Company (DIS) | Mr. Campbell | Meta Platforms, Inc. (META) | Between median and 75th | | Above 75th percentile | Mr. Perrette | | Above 75th percentile | | Above 75th percentile | Mr. Faricy | | Between median and 75th | | Between median and 75th |
The Committee regularly reviews tally sheets prepared for each of the NEOs to allow consideration of both current and historical compensation. The tally sheets allow the Committee to review an integrated snapshot of the individual and aggregated elements of each NEO’s compensation. NEO EMPLOYMENT AGREEMENTS
Provided below are summaries
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2022 Stockholder Engagement In the fall of 2022, we engaged with 10 of our top 15 stockholders, representing approximately 31% of our outstanding shares. Participating in this outreach were our independent Board Chair, Mr. Di Piazza, and our Compensation Committee Chair, Mr. Gould, with support from the Company's Investor Relations and Legal Departments. During these conversations, Messrs. Di Piazza and Gould sought feedback from our stockholders regarding our compensation program, philosophies and practices, as well as ESG and corporate governance matters. Much of the employment agreements thatfeedback we have entered intoreceived aligned with our NEOs. In each of these agreements, our NEOs are subject to customary restrictive covenants, including those relating tonon-solicitation,non-interference,non-competitionpay for performance philosophy and confidentiality, duringsupported the termCommittee's vision for the design of the agreement and, depending on the circumstances of termination, for a period thereafter.CEO Employment Agreement
We have had an employment agreement with David M. Zaslav, our President and Chief2023 executive compensation program, as summarized below.
| | | | | | | | | | What we Heard | | What we Did | | | | ■Hold annual "Say on Pay" vote | | ■Recommending future "Say on Pay" votes be held every year. See Proposal Four on page 80 | | | | ■Better align pay and performance | | ■Resumed use of Performance-Based Restricted Stock Units ("PRSUs") and stock options in 2023 LTI program for NEOs (other than the CEO) ■In response to our stock price performance in 2022 and the strong focus on free cash flow and leverage reduction, the Committee chose not to fund a performance pool to provide additional cash bonuses or award an above-target bonus to the CEO despite strong individual performance by the CEO and the other NEOs | | | | ■Better align executive compensation with stock price | | ■Added a TSR-modifier to 2023 PRSU awards for NEOs (other than PRSU awards to the CEO) | | | | ■Utilize longer performance periods for equity compensation | | ■Set three-year performance period for 2023 PRSU TSR-modifier | | | | ■Don't repeat metrics in different portions of the executive compensation program | | ■Differentiated metrics used for 2023 annual bonus program (revenue, EBITDA, DTC subscribers) and the 2023 LTI program (adjusted free cash flow and total stockholder return) | | | | ■Focus Company leadership on reducing leverage | | ■Utilizing adjusted free cash flow as a financial metric in the 2023 LTI program ■Awarded special PRSUs to the NEOs and certain other executives to further incent achievement of the Company's free cash flow objectives | | | | ■Provide a rationale for the Committee's compensation decisions | | ■Enhanced our CD&A disclosures to place greater focus on Committee's decision-making |
See "Looking Ahead: 2023 Executive Officer, since he joined the Company in 2007. We entered into the current employment agreement with Mr. Zaslav in 2018 (the “Zaslav 2018 Employment Agreement”) which commenced on July 1, 2018 and continues through December 31, 2023. Pursuant to the Zaslav 2018 Employment Agreement, Mr. Zaslav is subject to customary restrictive covenants, including those relating tonon-solicitation,non-interference andnon-competition, during the term of the agreement and for a period of two years thereafter and to continuing confidentiality obligations. Below is a summary of the key terms of the Zaslav 2018 Employment Agreement. Base Salary and Target Bonus
Throughout the term of the Zaslav 2018 Employment Agreement, Mr. Zaslav’s base salary will be maintained at $3,000,000 per year and his target annual bonus will be $22,000,000 per year. The target annual bonus is not guaranteed and the actual amount paid to Mr. Zaslav depends on the achievement of qualitative and quantitative performance objectives, which will be determined each year by the Committee in consultation with Mr. Zaslav.
Long-Term Incentive Awards and Signing Grants
The Zaslav 2018 Employment Agreement provided for the grant of nonqualified stock options (the “Signing Options”) to Mr. Zaslav, with staggered exercise prices and vesting schedules and progressively higher exercise prices and vesting over the term of the agreement. The Signing Options were granted to Mr. Zaslav on July 16, 2018 and will be earned and become eligible to vest and be exercised in five tranches (determining each tranche’s vesting/exercisability beginning as of January 2 of the years set forth in the following table), and each successive tranche has a higher exercise price, as follows:
| | | | | | | | | | | Tranche | | Series A Shares | | | Exercise Price ($) | | | Vesting/Exercise schedule* | 2019 | | | 2,435,655 | | | | 27.35 | | | 2020, 2021, 2022, 2023 (25%/yr) | 2020 | | | 2,211,344 | | | | 28.72 | | | 2021, 2022, 2023, 2024 (25%/yr) | 2021 | | | 2,155,404 | | | | 30.15 | | | 2022 (33%), 2023 (33%), 2024 (34%) | 2022 | | | 2,393,454 | | | | 31.66 | | | 2023 (50%), 2024 (50%) | 2023 | | | 1,571,489 | | | | 33.24 | | | 2024 (100%) |
* | Any vesting/exercise date designated as 2024 shall be December 31, 2023.
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Mr. Zaslav also received a grant of stock options for 989,299 shares of Series A common stock on January 2, 2019. That award, like the 2023 tranche of the Signing Options, has an exercise price of $33.24 per share and shall vest fully and become exercisable on December 31, 2023.
Mr. Zaslav is also entitled to annual awards of PRSUs from 2019 to 2023, conditioned on his employment on the grant date of each tranche of PRSUs. In 2019, Mr. Zaslav received 470,035 PRSUs. The number of PRSUs in each grant from 2020 through 2023 will be determined by dividing $12 million by the closing price of our Series A common stock on the date prior to grant. The PRSUs are earned based on the achievement of quantitative and qualitative performance metrics measured over aone-year performance period. The Committee sets the performance metrics for eachone-year performance period at the time of grant in consultation with Mr. Zaslav. Each annual award of PRSUs is paid in three installments as follows: 50% will be paid in the calendar year immediately following theone-year performance period, as soon as practicable following the Committee’s determination of performance for such performance period, 25% will be paid as soon as practicable after the beginning of the second calendar year following theone-year performance period, and the remaining 25% will be paid as soon as practicable after the beginning of the third calendar year following theone-year performance period. Mr. Zaslav may elect to defer receipt of the shares issuable pursuant to his PRSUs and is also permitted to have applicable withholding taxes satisfied through a reduction in the number of shares issued to him upon settlement of PRSUs, subject to limitations in certain areas.
All references to vesting of Mr. Zaslav’s long-term incentive awards assume continued employment through the applicable vesting date or acceleration as provided below under “Termination Provisions.”
Mr. Zaslav is required to retain the shares received upon exercise of all of the stock options granted under the Zaslav 2018 Employment Agreement (after netting for any shares used to pay exercise prices and tax withholding) through the end of the term of the Zaslav 2018 Employment Agreement. Mr. Zaslav also is required to hold a specified number of shares of our common stock (either Series A or Series C) during each year from 2019 to 2023: 1,800,000 shares in 2019, 2,220,000 in 2020, 2,550,000 in 2021, 2,750,000 in 2022, and 2,750,000 in 2023.
Health, Welfare and Other Personal Benefits
Mr. Zaslav is eligible to participate in all employee benefit plans and arrangements that we offer for the benefit of our senior executive group, including insurance and retirement plans. He is entitled to four weeks of vacation each year and also receives a car allowance of $1,400 per month. Mr. Zaslav is entitled to use our corporate aircraft or our NetJets arrangement for up to 200 hours of personal use per year. We will pay for the first 100 hours of personal use and Mr. Zaslav shall reimburse us for personal use in excess of 100 hours, under the Aircraft Time Sharing Agreement between Mr. Zaslav and Discovery Communications, LLC entered into in 2014 (the “Time Sharing Agreement”), which continues in effect under the Zaslav 2018 Employment Agreement. See “Retirement Plans and Other Benefits – Health, Welfare and Other Benefits”Compensation Program" on page 5563 for additional details on Mr. Zaslav’s personal aircraft use.
Termination Provisions
Termination by Reason of Death or Disability
The Zaslav 2018 Employment Agreement provideschanges the Committee is implementing for the payment of the following amounts upon termination of Mr. Zaslav’s employment by reason of his death or disability:
(1) all accrued and unpaid salary, accrued and unpaid annual bonus for any completed year and accrued and unused vacation, in each case in a lump sum, and other vested benefits under our welfare and benefit plans;
(2) a prorated portion of Mr. Zaslav’s then-current annual bonus, based on the portion of the calendar year during which Mr. Zaslav was employed by us, payable during the first quarter of the following year, in the ordinary course of our bonus payments;
(3) payment for his stock appreciation right (“SAR”) awards, in a lump sum, in accordance with the terms of the applicable plans (which provide for acceleration of vesting in such event);
(4) accelerated vesting of his PRSU awards, prorated based on the number of full or partial years completed for the applicable performance period and the amount earned based on achievement of performance metrics during such full or partial years; and
(5) the payment of (i) coverage under our group health benefits plan to the extent permitted by, and under the terms of, such plan and to the extent such benefits continue to be provided to former executives and/or the survivors of executives at Mr. Zaslav’s level in the Company generally, or (ii) Company-paid continuation health coverage (commonly referred to as COBRA), subject to a change to instead use comparable cash payments if required for legal compliance.
In addition, all of Mr. Zaslav’s unvested stock options fully vest and become immediately exercisable in accordance with the terms of the applicable award agreement. As a condition of receiving the severance benefits described above (other than in the event of his death), Mr. Zaslav would be required to sign a general release in our favor.
Termination By Discovery for Cause; By Mr. Zaslav Other than for Good Reason
If Mr. Zaslav’s employment is terminated by us for “Cause” or by Mr. Zaslav other than for “Good Reason” (“Cause” and “Good Reason” have the meanings set forth below under “Executive Compensation Tables—Potential Payments Upon Termination or Change in Control – Defined Terms” on page 75), the Zaslav 2018 Employment Agreement entitles him to receive all accrued and unpaid salary, accrued and unpaid annual bonus for any completed year and accrued and unused vacation, in each case in a lump sum, and other vested benefits under our welfare and benefit plans, but all unvested or unexercised equity awards are forfeited. If such termination was effected by us for “Cause,” or by Mr. Zaslav before December 31, 2023 other than for “Good
executive compensation program.Reason” (except within 30 days beginning on the 31st day following a Change of Control, as described below) Mr. Zaslav forfeits all rights under his stock option, SAR and PRSU awards (regardless of whether all or any portion of the award is then vested or unvested).
Termination by Discovery Other than for Death, Disability or Cause; By Mr. Zaslav for Good Reason
If Mr. Zaslav’s employment is terminated by us other than for death, disability or “Cause” or by Mr. Zaslav for “Good Reason,” The Zaslav 2018 Employment Agreement entitles him to receive payments for the following:
(1) all accrued and unpaid salary, accrued and unpaid annual bonus for any completed year and accrued and unused vacation, in each case in a lump sum, and other vested benefits under our welfare and benefit plans;
(2) a prorated portion of Mr. Zaslav’s annual bonus, based on the portion of the calendar year during which Mr. Zaslav was employed, payable during the first quarter of the following year, in the ordinary course of our bonus payments and subject to achievement of the applicable performance metric;
(3) an amount equal toone-twelfth the average of Mr. Zaslav’s annualized base salary that Mr. Zaslav was earning in the calendar year of the termination and the immediately preceding calendar year, multiplied by 24, plusone-twelfth of the average of the annual bonus paid to Mr. Zaslav for the immediately preceding two years, multiplied by 24, payable over the course of the 24 months following his termination or resignation consistent with our normal payroll practices (disregarding for this purpose any portion of the average annual bonus that exceeds $12 million);
(4) accelerated vesting and payment for all of his granted but unvested SARs;
(5) accelerated vesting for all of his outstanding PRSU awards, with the amount earned based on achievement of the performance metrics during the applicable performance period and the awards distributed as if Mr. Zaslav remained employed; and
(6) the payment of (i) coverage under our group health benefits plan to the extent permitted by, and under the terms of, such plan and to the extent such benefits continue to be provided to former executives at Mr. Zaslav’s level in the Company generally, or (ii) Company-paid COBRA, subject to a change to instead use comparable cash payments if required for legal compliance.
In addition, Mr. Zaslav’s granted but unvested stock options will continue to vest in accordance with their original vesting schedule following termination of service.
Termination by Mr. Zaslav upon Change in Control
If Mr. Zaslav remains employed by us (or our successor) for 30 days following a Change in Control (where “Change in Control” has the meaning set forth below under “Executive Compensation Tables—Potential Payments Upon Termination or Change in Control – Defined Terms” on page 75), then then all outstanding and unvested equity awards will become fully vested as of the thirtieth day following the Change in Control and any outstanding and unvested PRSUs will be earned regardless of actual performance. In the event Mr. Zaslav is terminated (i) other than for Cause or for Good Reason within 60 days following a Change in Control, or (ii) he resigns voluntarily within the 30 calendar days commencing on the 31st day following a Change in Control, then the outstanding PRUSs (for which the performance period has not expired) will become fully vested as of 30 days after the Change in Control, regardless of actual performance and the PRSUs will be distributed immediately to the extent permissible under Code Section 409A, and he will be treated as though terminated without Cause for purposes of his other severance benefits. For more information regarding these payments, please see “Executive Compensation Tables—Potential Payments Upon Termination or Change in Control” beginning on page 66.
Termination upon Expiration of the Zaslav 2018 Employment Agreement
In the event of the termination of Mr. Zaslav’s employment upon the expiration of the Zaslav 2018 Employment Agreement on December 31, 2023, Mr. Zaslav is entitled to receive:
(1) all accrued and unpaid salary, accrued and unpaid annual bonus for any completed year and accrued and unused vacation, in each case in a lump sum, and other vested benefits under our welfare and benefit plans;
(2) the payment of (i) coverage under our group health benefits plan to the extent permitted by, and under the terms of, such plan and to the extent such benefits continue to be provided to former executives at Mr. Zaslav’s level in the Company generally, or (ii) Company-paid COBRA, subject to a change to instead use comparable cash payments if required for legal compliance; and
(3) an amount equal to Mr. Zaslav’s annualized base salary in 2023, plus the average of the annual bonus paid to Mr. Zaslav for the immediately preceding two years, payable over the course of the 12 months following his separation from service after the expiration of the Zaslav 2018 Employment Agreement consistent with our normal payroll practices (disregarding for this purpose any portion of the average annual bonus that exceeds $12 million).
Other NEO Employment Agreements
The table below summarizes the key provisions of the other NEO employment agreements.
| | | | | | | | | | | | Gunnar Wiedenfels | | Bruce Campbell | | Jean-Briac Perrette | | Peter Faricy | Term | | Through April 2, 2021 | | Through February 14,
2022 | | Through June 30,
2022 | | Through September 16, 2021 | | | | | | | Base Salary(1) | | $1,100,000 | | $1,800,000 | | £1,525,000 | | $1,400,000 | | | | | | | Target Bonus | | 120% | | 150% | | 175% | | 120% | | | | Annual Equity | | Annual equity awards to be provided in accordance with our normal executive compensation practices. | | | | | | | Sign on/Renewal Grants, Relocation and Other Benefits | | • $1,250,000 sign on option grant • $1,250,000 sign on RSU grant • $250,000 cash sign on bonus • $1,000,000 SRP contribution (the “Wiedenfels SRP Contribution”) | | • $3,000,000 equity
grant in 2018• $3,750,000
contract renewal
RSU grant | | • $3,500,000
equity grant in
2019• $4,000,000
contract
renewal RSU
grant • Tax
preparation
assistance and
repatriation
benefits | | • $3,000,000 sign on RSU • $200,000 cash sign on bonus • $600,000 SRP contribution (the “Faricy SRP Contribution”) • Relocation to NY • Corporate housing in NY/London during 2019 | | | | Termination for “Cause”(2) | | Upon termination for cause, executive is only entitled to receive amounts earned or vested at the time of termination.(3) | | | | Termination without “Cause” or “Good Reason”(4) Resignation | | If executive is terminated without “Cause” or resigns for “Good Reason”, he will be entitled to severance, provided that he signs a release in our favor.(5) | | | | Resignation Provisions | | If executive resigns other than for “Good Reason” before the end of his term, he will be required to pay ussix-months’ gross salary; we remain eligible to obtain further damages and injunctive relief. | | | | Renewal Provisions | | We may make a “Qualifying Renewal Offer”(6) by providing advance notice (as specified in the applicable agreement). If we fail to make a “Qualifying Renewal Offer”, executive is entitled to severance as if he were terminated without cause. If we make a “Qualifying Renewal Offer” that executive rejects, he is not eligible for severance, but is eligible for anon-competition payment of 50% of base salary.(7) | | | | Covenants | | Customary restrictive covenants where permitted by law during the term and for 12 months thereafter, includingnon-interference,non-competition,non-solicitation (18 months for employeenon-solicit); continuing confidentiality obligations |
(1) | Base Salary is the base salary set forth in the applicable Employment Agreement. NEO base salaries are subject to review and adjustment by the Committee, at its discretion, as part of the Annual Base Salary Review.
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(2)50 | “Cause” has the meaning set forth below under “Executive Compensation Tables-Potential Payments Upon Termination or Change in Control – Defined Terms” on page��75. The Cause definition in the individual NEO Employment Agreements shall apply in lieu of that provided in any benefit plans in which the NEO participates.
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(3) | Mr. Wiedenfels’ agreement provides that we may only terminate him for “Cause” if we provide notice that he has materially neglected his duties to us or engaged in other conduct that constitutes a breach, and he fails to cure such breach within 30 days of delivery of such notice.
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(4)Proxy Statement Summary | “Good Reason” has the meaning set forth below under “Executive Compensation Tables -Potential Payments Upon Termination or Change in Control – Defined Terms” on page 75.
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(5) | Additional information about severance payments can be found under “Executive Compensation Tables -Potential Payments Upon Termination orChange-in-Control” on page 66.
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(6)Proposal 1 | “Qualifying Renewal Offer” is an offer to renew the employment agreement with a meaningful increase in base salary and a bonus target that is at least the same level as in effect at the end of the current term of employment, and with other material terms that are at least as favorable, in the aggregate, as the material terms of the current employment agreement.
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(7) | Mr. Perrette’s agreement provides that if he rejects a “Qualifying Renewal Offer”, in addition to the benefits provided in the table below, hisnon-competition payment would increase to 100% of base salary if he seeks to engage in competitive activity and permission is denied by us.
Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
NEO COMPENSATION IN 2019 Compensation in 2022 Elements of 20192022 Compensation Total direct compensation for the NEOs in 20192022 consisted of three basic components: | | | | | | | | | | | | | Element of Compensation | | Key Features | | Purpose | | Base Salary | | Fixed annual cash amount, generally reviewed annually.annually in the first 90 days of the calendar year. | | Provide base salaries that are competitive to attract and retain high-performing executive talent. A competitive base salary is an important component of compensation providing a degree of financial stability for executives. Base salaries also form the basis for calculating other compensation opportunities, including, for example, and other than in the case of the CEO, the target amount of each NEO’s annual cash bonus as a percentage of their base salary. | | Annual Cash Bonus | | Each NEO has a target cash bonus opportunity, set as a percentage of their base salary (or in Mr. Zaslav’s case, as a specified dollar value). The actual amount paid/awarded for each year varies based on Company and individual performance. | | Deliver a substantial portion of total direct compensation in annual cash bonus awards that are aligned with Company and individualand/or line of business performance to focus our executives on our financial and operational goals. Ensuregoals and ensure that our cash compensation mix remains competitive with our industry. We generally set bonus targets as a percentage of base salary so that this performance-based element remains a similar proportion to the fixed base salary and the value of the bonus target automatically adjusts as salary adjustments are made. | | | | Long-Term Incentive
Awards | | Annual equity and equity-typeequity- type awards, in the form ofnon-qualified stock options, performance-based restricted stock units and restricted stock units and stock appreciation rights.units. Each type of award instrument generally vests in tranches over multiple years. | | Deliver a substantial portion of an executive’s annual total direct compensation in equity or equity-type awards to align our executives’ interests with those of our stockholders. We also use long-term incentiveLTI awards as a tool to encourage an executive to enter into a new employment agreement or extendwhen an existing agreement.executive is promoted. These awards serve as retention tools and align an executive’s interests to those of our stockholders. |
2019
NEO AccomplishmentsEmployment Agreements The table below summarizes the compensatory terms for 2022 under the employment agreements that we have entered into with each of our NEOs. In each of these agreements, our NEOs are subject to customary restrictive covenants, including those relating to non-solicitation, non-interference, non-competition and CompensationOur performance and individual achievements play a strong role in manyconfidentiality, during the term of the compensation decisionsagreement and, depending on the circumstances of termination, for our NEOs, as further described below.a period thereafter. The Committee considered our operational accomplishments and solid financial performancesummaries of the NEO employment agreements provided below are qualified in 2019, as well astheir entirety by reference to the full text of the applicable NEO employment agreement, each of the individual NEOs’ 2019 accomplishments in making compensation decisions. We have summarized each NEO’s overall performance and accomplishments below.
Mr. Zaslav: Mr. Zaslav serveswhich is filed as CEO and reports directlyan exhibit to the Board. In 2019, Mr. Zaslav led extraordinary operating accomplishments,2022 Form 10-K.
| | | | | | | | | | | | | | | | | | | David Zaslav | Gunnar Wiedenfels | Bruce L. Campbell | Jean-Briac Perrette | Gerhard Zeiler | | Term | Through December 31, 2027 | Through July 10, 2026 | Through July 8, 2025 | Through August 1, 2025 | Through April 7, 2025 | Base Salary(1) | $3,000,000 | $2,000,000 | $2,500,000 | $2,500,000 | $1,800,000 | | Target Cash Bonus | $22,000,000 | 175% of Base Salary | 200% of Base Salary | 200% of Base Salary | 178% of Base Salary | | Equity Target in Contract | $12,000,000 | $8,000,000 | $8,500,000 | $8,500,000 | $6,000,000 | | Annual Equity Vehicle | PRSUs | Annual equity awards to be provided in the same form and type as other similarly situated executives | | Sign on/Promotion Grants Awarded in 2022 | None | $2,000,000 promotion RSU grant in 2022 | $2,000,000 promotion RSU grant in 2022 | $2,000,000 promotion RSU grant in 2022 | None |
(1)Base Salary is the base salary set forth in the applicable employment agreement. NEO base salaries are subject to review and adjustment by the Committee, at its discretion, as we reported increases in revenue, Adjusted OIBDA, adjusted earnings per share and free cash flow. He presided over the continued global expansionpart of the brands we acquired with the Scripps Networks acquisition and a number of other successful acquisitions and partnerships both in the U.S. and internationally. Mr. Zaslav continued to revolutionize the Company as we advanced ourdirect-to-consumer strategy and better positioned the enterprise for future success.Mr. Wiedenfels: Mr. Wiedenfels is our CFO and reports to our CEO. Mr. Wiedenfels made strong contributions in 2019, driving exceptional financial performance that exceeded our internal metrics. He provided outstanding leadership over the continued integration of the Scripps Networks acquisition and achievement of
Annual Base Salary Review. acquisition synergies. Mr. Wiedenfels also led the rigorous execution of the ongoing transformation efforts, which resulted in significant over-delivery of Adjusted Free Cash Flow and the reduction of our net debt to Adjusted OIBDA ratio.
Mr. Campbell: Mr. Campbell is our Chief Development, Distribution & Legal Officer and reports to our CEO. Mr. Campbell successfully led a number of significant acquisitions and other transactions and partnerships in 2019, including the dissolution of the UKTV joint venture and related acquisition of the BBC natural history content and the negotiation of the Magnolia joint venture. He was also a key member of the team that spearheaded the Amazon/Food Network Kitchen partnership. Mr. Campbell also led our Domestic Distribution division in 2019, negotiating key extensions and laying the groundwork for key affiliate renewals in 2020. Mr. Campbell provided outstanding legal support and leadership of business affairs, production management, and our internal studios.
Mr. Perrette: Mr. Perrette serves as CEO and President of Discovery International and reports to our CEO. Mr. Perrette drove strong performance in our international division in 2019, returning the business to high single digit growth. Mr. Perrette drove robust operational management of his division, including increasing audience shares, driving new international distribution forHGTV andFood Network and advancing the internationaldirect-to-consumer strategy. He also supported the launch of Food Network Kitchen, helping to align numerous cross-functional teams to successfully launch the app.
Mr. Faricy: Mr. Faricy serves as CEO, GlobalDirect-to-Consumer, reporting to our CEO. Mr. Faricy took significant steps in 2019 to bolster the talent, improve the customer experience and grow ourDirect-to-Consumer business. He also launched the Food Network Kitchen app and completed the Amazon/Food Network Kitchen partnership. In addition, Mr. Faricy also opened a new technology hub in Bellevue, Washington and successfully launched a Discovery-owned technology platform in multiple markets and successfully migrated Eurosport Player onto this platform.
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2022 NEO Compensation Actions The following chart summarizes the compensation decisions for 20192022 with respect to each NEO’s base salary, annual cash bonus and long-term incentive awards. Detailed discussion of the decisions made with respect to each element is contained in the discussion immediately below the chart. | | | | | | Element of
Compensation | | 20192022 Compensation Decisions
Actions | | Base Salary | | ■Maintained base salary for Mr. Zaslav per the terms of the 2018 Zaslav Employment Agreement.Increased base salaryhis employment agreement.
■Base salaries were adjusted for each of Messrs. Wiedenfels, Campbell, Perrette and Campbell in February 2019 as part of the 2019 Annual Base Salary Review.Increased Mr. Perrette’s base salaryZeiler in connection with the extensionrenewal of hiseach of their employment agreementagreements to reflect their increased roles and responsibilities in February 2019.
Maintained Mr. Faricy’sthe newly combined larger company; new base per the terms of his July 2018 employment agreement.
salaries were retroactively effective to April 8, 2022. | | | | Annual Cash Bonus | | ■Paid annual cash bonuses in March 20202023 to each of the NEOs following the 20192022 Annual Bonus Review which took place in February 2020.2023; bonuses were paid based on the Committee's assessment of Company performance in 2022 versus pre-established financial metrics and, in the case of the CEO and CFO, each executive's individual performance versus pre-established strategic goals for each executive. | | | Long-Term
Incentive Awards | | ■Awarded PRSUs and stock options to Mr. Zaslav in March 2022 as specified in the Zaslav 2018 Employment Agreement.his employment agreement. ■Awarded stock options and RSUs to Messrs. Wiedenfels, Campbell and Perrette and Faricy in February 2019March 2022 following the 20192022 Annual LTI Review. ■Converted Mr. Zeiler's prior AT&T RSUs into WBD RSUs as of the closing of the WarnerMedia Transaction, pursuant to the terms of the transaction documents ■Awarded RSUs to Messrs. Wiedenfels, Campbell and Perrette in July and/or August 2022 in connection with the renewal of each executive's employment agreement that included increased responsibilities in connection with their new roles in the newly combined larger company. |
Mr. Zaslav: Zaslav: Under the terms of the Zaslav 2018 Employment Agreement,his employment agreement, Mr. Zaslav’s base salary was set at $3 million throughout theits term of the agreement (through 2023)December 31, 2027). The Committee determined that it was appropriate to retain Mr. Zaslav’s base salary at the same level and to focus the compensation elements of the agreement on performance-based pay. This agreement is further described in “NEO Employment Agreements” above.Mr. Wiedenfels:Wiedenfels:
The Committee increased Mr. Wiedenfels’ base salary by 3% to $1,166,990$2,000,000 in July 2022, in connection with the execution of his new employment agreement and increased responsibilities in the 2019 Annual Base Salary Review.newly combined larger company. Mr. Wiedenfels' new base salary was applied retroactively to April 8, 2022, the date the WarnerMedia Transaction closed. The Committee based this decision onbenchmarked Mr. Wiedenfels' new salary against similar positions within the CEO’s recommendationWBD Peer Group, and believed the new base salary was appropriate in light of peer compensation and Mr. Wiedenfels’ strong performance,Wiedenfels' broader responsibilities as CFO of an organization with reference to the 2019 Peer Group market data.size and complexity of WBD. Mr. Campbell: Campbell: The Committee increased Mr. Campbell’sCampbell's base salary by 3% to $1,854,000$2,500,000 in July 2022, in connection with the execution of his new employment agreement and increased responsibilities in the 2019 Annual Base Salary Review.newly combined larger company. Mr. Campbell's new base salary was applied retroactively to April 8, 2022, the date the WarnerMedia Transaction closed. The Committee based this decision onbenchmarked Mr. Campbell's new salary against similar positions within the CEO’s recommendationWBD Peer Group and broader media and entertainment industry, and believed the new base salary was appropriate in light of peer compensation and Mr. Campbell’s strong performance,Campbell's new role as Chief Revenue and Strategy Officer and the broader responsibilities he was assuming within an organization with reference to the 2019 Peer Group market data.size and complexity of WBD. Mr. Perrette: Perrette: The Committee increased Mr. Perrette’sPerrette's base salary by 22.3%, to £1,525,000 as specified by$2,500,000 in August 2022, in connection with the February 2019 extension of his employment agreement. The Committee considered Mr. Perrette’s strong performance, market data from the 2019 International Peer Group, internal equity, and the long-term nature of the agreement in determining the appropriate base salary adjustment. This increase was in lieu of any further increase as part of the 2019 Annual Base Salary review. Mr. Perrette’s employment agreement is further described in “NEO Employment Agreements” above.Mr. Faricy: The Committee set Mr. Faricy’s 2019 base salary at $1,400,000 during the negotiationexecution of his new hire employment agreement and increased responsibilities in July of 2018. When setting histhe newly combined larger company. Mr. Perrette's new base salary was applied retroactively to April 8, 2022, the date the WarnerMedia Transaction closed. The Committee considered market data frombenchmarked Mr. Perrette's new salary against similar positions within the WBD Peer Group and broader media and entertainment industry, and believed the need to incentnew base salary was appropriate in light of peer compensation and Mr. Faricy to leave employmentPerrette's new role as President and CEO, Global Streaming and Games and the broader responsibilities he was assuming within an organization with another company to work for us.the size and complexity of WBD.
Mr. Zeiler The Committee also considered internal equityincreased Mr. Zeiler's base salary to $1,800,000 in April 2022, in connection with the execution of his new employment agreement and increased responsibilities in the newly combined larger company. Mr. Zeiler's new base salary was effective as of April 8, 2022, the date the WarnerMedia Transaction closed. The Committee benchmarked Mr. Zeiler's new salary against similar positions within the WBD Peer Group and broader media and entertainment industry, and believed the new base salary was appropriate in light of peer compensation and Mr. Zeiler's new role as President, International and the base salarybroader responsibilities he was assuming within an organization with the size and complexity of Mr. Faricy’s peers within Discovery. Mr. Faricy’s employment agreement is further described in “NEO Employment Agreements” above.WBD.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
We made annual cash bonus awards to each of theour NEOs with respect to their 20192022 performance as part of the 20192022 Annual Bonus Review which took place in February 2020.2023. The annual bonus target amount for each NEO other than Mr. Zaslav is set as a percentage of base salary. This percentage generally is set in the negotiation of each executive’s employment agreement and is determined by the Committee based on external market data, internal equity, and, if the executive is leaving other employment to join us, an assessment of what level of compensation is needed to encourage the individual to accept our offer of employment. If an executive works only part of the year, the bonus amount generally is subject to proration based the period of employment. The annual bonus target may be changed in the course of an executive’s employment or in the negotiation of a new or extended employment agreement when the scope of the new role and responsibilities would warrant such a change. For all employees who have a bonus target that is expressed as a percentage of base salary, including the NEOs, our policy is to apply the bonus target that is in effect on December 31 of the calendar year to calculate the bonus payment for that year. Therefore, in the case of the NEOs that entered into new employment agreements during 2022, their new bonus targets were applied for full-year 2022. Each of theour NEOs, other than Messrs. Zaslav and Wiedenfels, participated in the ICP in 2019,2022, our annual bonus plan that applies broadly to employees around the world. As discussed below, the determination of the actual cash bonus under the ICP is based on achievement of annual financial targets as applied to the target value. In 2019, we once again utilized a “modifier” 2022 Financial Metrics and Adjustments The Committee sets annual financial metrics to determine the cash bonuses awarded to NEOs, either under our ICP or under the separate bonus program for the CEO and CFO. The ICP payout is calculated based solely on digital results, which modifiesperformance against these financial measures, and the calculationannual cash bonuses for the CEO and CFO are based 50% on performance against these financial measures, and 50% on additional strategic goals established by the Committee for each of the performance against the ICPCEO and CFO. The 2022 financial targets by up to 10% (up or down) based on achievement of enterprise-wide or division-specific revenue targets attributable to our digital media business.The annual cash bonus design also rewards exceptional individual performance through allocation of a “performance pool.” Three percent of the ICP target is used to fund the performance poolmetrics, weighting and additional funding is based on overachievement of the Adjusted Free Cash Flow metric. The performance pool is then allocated to high performing employees, which may include the NEOs other than Mr. Zaslav. Each eligible NEO received a performance pool award for 2019.
The annual bonus target may be changed in the course of an executive’s employment or in the negotiation of a new or extended employment agreement. The following chart summarizes the 2019 bonus target amount and
corresponding definitions are set out below: actual payout for each NEO. Please refer to the “Estimated Future Payouts UnderNon-Equity Incentive Plan Awards” column of the 2019 Grants of Plan Based Awards Table on page 62 for more information regarding the range of 2019 payouts available to these NEOs and the“Non-Equity Incentive Plan Compensation” column of the 2019 Summary Compensation Table on page 59 for the actual amounts paid to them with respect to their 2019 awards.
| | | | | | | | | NEO
Financial Metric | Weighting | 2019 Target Amount
| | 2019 Metrics
| | Total 2019 Cash Bonus Award
Definition | David M. Zaslav,
CEO
Net Revenue | 25% | $22 millionRevenue from ordinary business operations. | | Adjusted EBITDA | 25% | 50% qualitative goals
50% quantitative goals
Adjusted EBITDA is defined as operating income excluding (i) employee share-based compensation; (ii) depreciation and amortization; (iii) restructuring and facility consolidation; (iv) certain impairment charges; (v) gains and losses on business and asset dispositions; (vi) certain inter-segment eliminations; (vii) third-party transaction and integration costs; (viii) amortization of purchase accounting fair value step-up for content; (ix) amortization of capitalized interest for content; and (x) other items impacting comparability. | Adjusted Free
Cash Flow | 25% | $21,763,500, basedCash provided by operations less acquisitions of property and equipment, adjusted for long-term incentive payments. | | Year-End Paid DTC Subscribers | 25% | DTC Subscription is defined as: (i) a retail subscription to discovery+, HBO or HBO Max for which we have recognized subscription revenue, whether directly or through a third party, from a direct-to-consumer platform;(ii) a wholesale subscription to discovery+, HBO, or HBO Max for which we have recognized subscription revenue from a fixed fee arrangement with a third party and where the individual user has activated their subscription; (iii) a wholesale subscription to discovery+, HBO or HBO Max for which we have recognized subscription revenue on achievement of 100%a per subscriber basis; and (iv) users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the quantitative goals and 97.9% ofcalendar month immediately following the qualitative goals.month in which their free trial expires. The aggregate payout amount was slightly below target.number of DTC Subscriptions are “Paid DTC Subscribers." |
At the beginning of 2022 when the Committee met to consider the financial metrics it would use to measure 2022 performance, it was cognizant that the WarnerMedia Transaction was likely to close in the first half of the year. Therefore, in February 2022, the Committee established fiscal 2022 financial metrics for the ICP and cash bonuses to the CEO and CFO, as well as the CEO's PRSU awards granted on March 1, 2022, that were based on standalone Discovery, Inc. performance; however, the Committee reserved the right to adjust those metrics following the closing of the WarnerMedia Transaction, if appropriate. The WarnerMedia Transaction closed on April 8, 2022. Following the closing of the WarnerMedia Transaction, the Committee determined it was appropriate to do the following: ■Use the standalone Discovery metrics it adopted in February 2022 to assess the first-half of 2022 (January 1, 2022 through June 30, 2022) performance of those portions of the WBD business and those executives and employees that were historically a part of Discovery, Inc. | | | | | | Gunnar Wiedenfels,
CFO
2023 PROXY STATEMENT | | $1,400,388
120% of base salary
| | 50% qualitative goals
50% quantitative goals
Individual performance factored into allocation of performance pool
| | $2,630,388, based on achievement of 100% of the quantitative goals and 100% of the qualitative goals and allocation of the performance pool. The aggregate payout amount was above target, reflecting Mr. Wiedenfels’ outstanding individual performance in 2019 and his contributions to our transformation efforts. | | | | | Bruce L. Campbell,
Chief Development, Distribution & Legal Officer
| | $2,781,000
150% of base salary
| | 100% ICP calculation
100% of ICP assigned to achievement of Company-wide financial metrics
Modifier based on Company-wide digital revenue applied to financial results to increase or decrease payout by up to 10%
Individual performance factored into ICP calculation and allocation of performance pool
| | $4,061,765, based on calculation of the ICP payout. ICP calculation based on Company performance and allocation of the performance pool. The aggregate payout amount was above target, reflecting Mr. Campbell’s strong individual performance and contributions in 2019 and his contributions to our transformation efforts.53 |
| | | | | | | NEO
| | 2019 Target Amount
| | 2019 Metrics
| | Total 2019 Cash Bonus Award
| Jean-Briac Perrette,
President and Chief Executive Officer, Discovery International
| | £2,668,750
175% of base salary
| | 100% ICP calculation
80% of ICP assigned to achievement of International division financial metrics
20% of ICP assigned to Company-wide financial metrics
Modifier based on International division digital revenue applied to financial results to increase or decrease payout by up to 10%
Individual performance factored into ICP calculation and allocation of performance pool
| | £3,703,414, based on calculation of the ICP payout. ICP calculation based on Company and International division performance and allocation of the performance pool. The aggregate payout amount was above target, reflecting Mr. Perrette’s strong performance in 2019 and his contributions to our transformation efforts. | | | | | | | | | | | | | | | | | | | | | | | | | | Peter Faricy,
CEO, GlobalDirect-to-Consumer
Proxy Statement Summary | | $1,680,000
120% of base salary
Proposal 1 | | 100% ICP calculation
80% of ICP assigned to achievement of globaldirect-to-consumer financial metrics
20% of ICP assigned to Company-wide financial metrics
Modifier based on Company-wide digital revenue applied to financial results to increase or decrease payout by up to 10%
Individual performance factored into ICP calculation and allocation of performance pool
Corporate Governance | | $2,279,712, based on calculation of the ICP payout. ICP calculation based on Company anddirect-to-consumer business performance and allocation of the performance pool. The aggregate payout amount was above target, reflecting Mr. Faricy’s performance in 2019 and his contributions to our transformation efforts.Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Determination
■Use the metrics established prior to closing by WarnerMedia for its 2022 bonus program that were based on standalone WarnerMedia performance to assess the first-half of Annual Cash Bonus Awards2022 (January 1, 2022 through June 30, 2022) performance of the portions of the WBD business and those executives and employees that were historically a part of WarnerMedia. ■Adopt metrics in June 2022 for Messrs. Zaslava combined WBD for the second-half of 2022 (July 1, 2022 through December 31, 2022) and WiedenfelsThe bonus structuremeasure second-half performance for Messrs. Zaslav and Wiedenfels was designed by the Committee to meet specific objectives. As discussed below, the annual bonuscombined company against these WBD metrics.
■Calculate a combined or "blended" score for each of theICP, CEO and CFO is based 50% on achievement of financial targets and 50% on qualitative goals. Unlike the calculation of the ICP pool, which is calculated based solely on performance against financial measures, the annual cash bonus for these two NEOs is based 50% on performance against financial measures and 50% on qualitative goals determined without reference to our performance against financial targets. Given the role of each of the CEObonuses and the CFO in setting the annual financial targets used for the ICP, the Committee concluded that it would be appropriate to have a substantial part of their bonus opportunitiesCEO's 2022 PRSU awards based on separate qualitative measures. Mr. Wiedenfels is also eligible for allocationthe first-half performance of the performance pool consistent with the process for other senior executives, including Messrs. Campbell, Perrette and Faricy.
This combination of financial targets and qualitative goals allows the Committee to incentivize and reward appropriate setting of financial targets by the CEODiscovery or WarnerMedia, as applicable, and the CFO; the Committee adopted this design as a resultsecond-half performance of its ongoing risk assessment of our executive compensation programs.
The 2019 quantitative goals were based on:
WBD.Adjusted Free Cash Flow (as defined below); and
Further Adjusted OIBDA (as defined below).
The Committee determined that including all three measures was appropriate for the CEO and CFO given the scope of their responsibilities and direct impact on resource allocation decisions.
The Committee annually reviews potential adjustments to performance against thesethe financial measures. The principle applied in deriving the adjustments is to ensure that the calculation reflects the impact of operational decisions taken by management, excludes the impact of events over which management has little or no influence, and excludes the impact of items that were not considered at the time the targets were set. Adjustments for currency fluctuations are made to ensure that the results are currency neutral. The In 2022, the Committee groupsgrouped adjustments into three categories:unplanned acquisitions and divestitures (and related expenses and revenues);
unplanned programming or new business investments; and
corporate transactions and legal expenses (including corporate debt transactions, accounting or legal changes that resultedthe four categories set forth in unforeseen changes, and significant legal and consulting fees for unbudgeted matters).
Thethe table below, providesand made the definitionadjustments indicated in the table below. The 2022 adjustments made by the Committee had the effect of eachincreasing our overall financial performance for purposes of the three financial metricscalculating cash bonuses and describes the 2019 adjustments at a high level:
ICP awards, as compared to our reported results. | | | | | | | | | Financial Metric
Category | | Definition
| | 20192022 Adjustments
to Performance | Net Revenue1 | | Revenue from ordinary business operations. | | Adjustments in the following areas:
• unplanned acquisitions of Golf Digest and Global Cycling Networkdivestitures (and related expenses and the unplanned UKTV transaction;
• unplanned programmingrevenues);
| ■Pre-closing legal and other investments associated with the establishment of a corporate digital function and negotiation of a new distribution arrangement for Bundesliga; and• currency adjustments, impact of certain annual bonus payments made to employees who were not NEOs as part of a broad-based program implemented to recognize employees who contributed to transformation, tax consulting fees stemming from changes in US and UK tax laws, revenue accounting changes offset by music rights release, certain joint venture arrangements
expenses | | 2 | unplanned significant investments or major strategy shifts in new or existing lines of business; | ■Significant shifts in theatrical and games releases ■Change in made-for-streaming movie strategy ■August 2022 renewal of our agreement with AT&T Wireless | Adjusted Free Cash Flow3 | major geopolitical business impacts; and | Cash provided by operations less acquisitions■Exit of property and equipment, adjusted for long-term incentive payments. | | Adjustments on the same bases described above for Net Revenue.business in Russia, Ukraine, Belarus■Currency development vs. planned rates | | 4 | corporate transactions and legal expenses (including accounting standard/policy changes, fees for unforeseen legal matters, corporate debt transactions). | | Further Adjusted OIBDA | | Revenues less costs of revenues■Financing fees for merger-related debt issuance ■Accounting policy changes relating to content amortization, deferred compensation recognition and selling, general and administrative expenses excluding:(i) mark-to-market share-based compensation, (ii) depreciation and amortization, (iii) amortization of deferred launch incentives, (iv) exit and restructuring charges, (v) impairment charges and (vi) gains (losses) on business and asset dispositions. | | Adjustments on the same bases described above for Net Revenue.securitization accounting |
The quantitative goals were weighted to reflect equal emphasis on the three measures. The Committee approved the targets in early 2019. For 2019, the quantitative targets, weighting and results were as follows (actual achievement is after the aforementioned adjustments):
| | | | | | | | | | | | | | | | | | | | Weighting | | | Threshold | | | Target | | | Actual
Achievement | | Net Revenue ($ in millions) | | | 33.3 | % | | $ | 9,976 | | | $ | 11,085 | | | $ | 11,185 | | Adjusted Free Cash Flow ($ in millions) | | | 33.3 | % | | $ | 2,016 | | | $ | 2,570 | | | $ | 3,132 | | Further Adjusted OIBDA ($ in millions) | | | 33.3 | % | | $ | 3,714 | | | $ | 4,643 | | | $ | 4,732 | |
The Committee set the individual qualitative goals for Mr. Zaslav related our strategic priorities, and for Mr. Wiedenfels based on the priorities in his role as CFO. The Committee sets updated goals each year based on
changing priorities, and there is variation from year to year in both the substanceDetermination of the annual goals and how they are weighted.
For 2019, Mr. Zaslav’s qualitative goals, with weighting, were to:
drive cost synergy, revenue, and free cash flow for Discovery Inc. (30%);
continue the integration of Scripps Networks through transformation and achieving long-term objectives and goals (20%);
growover-the-top business by building and improving products (GolfTV, Eurosport Player, DPlay and Motor Trend); evaluate new products and offerings in natural history, food, and home; growdirect-to-consumer business by continuing to build the GO platform in the US (35%); and
continue to drive revenue growth globally through strong affiliate and advertising sales on cable andfree-to-air platforms to drive strong annual performance and overall company value; develop additional revenue streams for content on skinny bundles and other content distribution (15%).
For 2019, Mr. Wiedenfels’ qualitative goals, with weighting, were to:
drive the transformation of the global finance function and lead successful transition of global accounting under new chief accounting officer (30)%;
lead rigorous management of overall transformation initiatives (30%);
drive strategic management of free cash flow optimization (20%);
support work of the Finance and Audit Committees, including providing effective and timely reporting and analysis in priority areas (10%); and
deliver strong finance core activities to provide effectiveday-to-day support to the business (10%).
The weighting was based on the Committee’s determination of the relative priority of each of these goals and reflects the significant emphasis on continued enterprise transformation. The Committee historically has set annual qualitative goals with a significant degree of “stretch” and has evaluated achievement against the goals by requiring a significant degree of over-performance to meet the goal.
In February 2020, the Committee reviewed the achievement of these quantitative and qualitative goals, considering the CEO’s and CFO’s self-assessments and, with respect to Mr. Wiedenfels, the input of the CEO and with respect to Mr. Zaslav, the input of the Board. The Committee determined that the Company achieved 100.9% of the Net Revenue metric, 121.9% of the Adjusted Free Cash Flow metric, and 101.9% of the Further Adjusted OIBDA metric. The metrics were designed to provide a maximum payout of 100% only upon at least 100% performance for each of the three quantitative goals. The threshold for a payout was achievement of more than 80% of the metric (performance at 80% or less would result in no payout based on the scale), and for prorated payout for performance between 80% and 100% of the metrics. Based on the performance against the three metrics, the overall calculation of the payout amount was 100% of the target amount.
With respect to the qualitative goals, the Committee, in consultation with the Board, determined that Mr. Zaslav had achieved his qualitative goals at the 97.9% level and that Mr. Wiedenfels had achieved his qualitative goals at the 100% level.
Based on these assessments, the Committee approved a total bonus payment of $21,763,500 to Mr. Zaslav. With respect to Mr. Wiedenfels, the Committee approved a total bonus payment of $2,630,388, based on achievement of the quantitative and qualitative goals, and the inclusion of a performance pool allocation as recommended by the CEO based on Mr. Wiedenfels’ strong performance in 2019 and leadership in the areas of transformation and cash flow management.
Determination of2022 Annual Cash Bonus Awards to Messrs. Campbell, Perrette and Faricy
2022 Incentive Compensation Program The 20192022 annual cash bonusbonuses for Messrs. Campbell, Perrette and Faricy wasZeiler were based on the terms of the ICP. The ICP specifies various financial metrics depending on an employee’s role and business alignment. The aggregate amount payable to an individual under the ICP is calculated by: ■first, determining the target bonus of each employee (thepre-established percentage of the employee’s base salary); ■second, establishing the amount payable as a result of our performance versus the ICP financial metrics and any applicable line of business performance measures, as applied to the target bonus amount including application of a “Digital Modifier” based on the contribution to revenue from various digital businesses within Discovery or within the applicable line of business (such amount, the “ICP Payout Percentage”); and ■third, adding to the total payout amount a specific dollar amount that is an allocation of the “performance pool.”pool” if applicable. The performance pool is a total amount of money that is available to allocate to high performers, with the amount available to allocate varying based on our overall financial performance. The 2019 annual cash bonus awards to Messrs. Campbell, Perretteperformance and Faricy were calculated as follows:
the Committee's discretion. There was no "performance pool" established for 2022.
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The 2022 annual cash bonus awards to Messrs. Campbell, Perrette and Zeiler were calculated as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | X | | X | | | NEO’s Individual Target
Bonus Percentage | X | | X | | | ICP Payout
Percentage | + | + | | Performance Pool Allocation (if
(if applicable) | = | = | | Cash Bonus Award
paid to NEO |
2019
For the 2022 ICP, and Performance PoolIn the first quarter of 2019, the Committee established threshold (20% payout), target (100% payout) and maximumabove target (110% payout) amounts for each of the ICP financial metrics a ceiling beyond which higher payments would only be made relating to such metric at the Committee’s discretion and a scale that determinedwould determine the amount payable for achievement of results between the minimumthreshold and the over-achievementabove target amounts. For 2019, we again usedThe metrics were designed to provide a “modifier”payout of 110% only upon at least 110% performance for each of the ICP financial metrics. The threshold for a payout was achievement of at least 90% of the metric (performance at less than 90% would result in no payout based on achievementthe scale) and for prorated payout for performance between 90% and 110% of digital revenue targets, which could,the metrics. Payments beyond the “above target” amount may be made at the Committee’s discretion, modify the amountdiscretion.
The Committee determined that for 2022, in light of the ICP payment up or down. The Committee also establishedsignificant changes to the financial metric that would determine the fundingCompany's business, operating divisions and reporting segments as a result of the WarnerMedia Transaction, it was appropriate to use total Company performance pool, based on overachievement offor all ICP awards, including the Adjusted Free Cash Flow metric under the ICP.Forawards to NEOs who work in or are fully dedicated to support a line of business within Discovery (e.g., Discovery International, GlobalDirect-to-Consumer)WBD. The Committee expects to resume its historical practice of tying a portion of their ICP award will be based onawards for NEOs who lead a line of business to the performance of their line of business. For these NEOs, 20% of their ICP will be based on achievement of the Discovery corporate ICP metrics set forth above, and 80% will be based on achievement of the ICP metrics for their line of business. A Digital Modifier may also be applied to the line of business results. In 2019, Messrs. Perrette and Faricy had a portion of their ICP awards determined by the performance of their respective lines of business.
Corporate ICP.in 2023.
The 20192022 ICP performance targets for the Company as a wholeand weightings are set forth in the following table. The metrics were again based on a weighting of 50%tables. As noted above, for 2022, the Committee used Net Revenue, and 50%EBITDA, Adjusted Free Cash Flow. The Net RevenueFlow, and Year-End Paid DTC Subscribers as the ICP metrics, and the Committee utilized legacy Discovery and WarnerMedia performance to measure first-half performance and WBD performance to measure second-half performance. Prior to the closing of the WarnerMedia Transaction, the Committee weighted each of the performance metrics for Discovery, Inc. equally (25% each). When the Committee established the second-half metrics for combined WBD, it chose to weight EBITDA and Adjusted Free Cash Flow measures forat 30% each and the Company-wideremaining two metrics areat 20% each, because the same measures used with respectCommittee wanted to focus the annualentire organization on driving earnings and free cash flow. WarnerMedia did not use revenue as a metric in its bonus for Messrs. Zaslavprogram prior to closing, and Wiedenfels, and were subject toit placed the same adjustments discussed above. highest weight on DTC subscribers (50%). The numbers in the table abovetables below under “Actual Achievement” reflect the adjustments discussed above. | | | | | | | | | | | | | | | | | | | | | Discovery | | Weighting | | | Threshold | | | Target | | | Maximum | | | Actual
Achievement | | Net Revenue ($ in millions) | | | 50 | % | | $ | 9,976 | | | $ | 11,085 | | | $ | 12,193 | | | $ | 11,185 | | Adjusted Free Cash Flow ($ in millions) | | | 50 | % | | $ | 2,016 | | | $ | 2,570 | | | $ | 3,124 | | | $ | 3,132 | |
With respect | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery, Inc. (H1 - Jan. 1, 2022 - June 30, 2022) | Weighting | Threshold | Target | Above Target | Actual Achievement | | Net Revenue ($ in millions) | 25 | % | | $ | 5,660 | | | $ | 6,289 | | | $ | 6,918 | | | $ | 6,097 | | | Adjusted EBITDA ($ in millions) | 25 | % | | $ | 1,686 | | | $ | 2,000 | | | $ | 2,315 | | | $ | 2,128 | | | Adjusted Free Cash Flow ($ in millions) | 25 | % | | $ | 504 | | | $ | 818 | | | $ | 1,133 | | | $ | 796 | | | Year-End Paid DTC Subscribers (# in millions) | 25 | % | | 11 | | | 22 | | | 33 | | | 24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | WarnerMedia (H1 - Jan. 1, 2022 - June 30, 2022) | Weighting | Threshold | Target | Above Target | Actual Achievement | | WM Adjusted EBITDA ($ in millions) | 30 | % | | $ | 1,955 | | | $ | 2,384 | | | $ | 2,527 | | | $ | 2,396 | | | WM Adjusted Free Cash Flow ($ in millions) | 20 | % | | $ | (2,257) | | | $ | (1,913) | | | $ | (1,798) | | | $ | (3,086) | | | WM DTC Subscribers (# in millions) | 50 | % | | 71 | | | 76 | | | 81 | | | 77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | WBD (H2 - July 1, 2022 - December 31, 2022) | Weighting | Threshold | Target | Above Target | Actual Achievement | | Net Revenue ($ in millions) | 20 | % | | $ | 20,879 | | | $ | 23,199 | | | $ | 25,519 | | | $ | 21,837 | | | Adjusted EBITDA ($ in millions) | 30 | % | | $ | 4,520 | | | $ | 5,680 | | | $ | 6,840 | | | $ | 5,748 | | | Adjusted Free Cash Flow ($ in millions) | 30 | % | | $ | 1,321 | | | $ | 2,481 | | | $ | 3,641 | | | $ | 2,383 | | | Year-End Paid DTC Subscribers (# in millions) | 20 | % | | 48 | | | 95 | | | 143 | | | 96 | |
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2022 Cash Bonuses to CEO and CFO The bonus structure for Messrs. Zaslav and Wiedenfels was designed by the Committee to meet specific objectives. Unlike the calculation of the ICP pool, which is calculated based solely on performance against financial measures, the annual cash bonus for these two NEOs is based 50% on performance against financial measures, and 50% on additional strategic goals established by the Committee. Given the role of each of the CEO and the CFO in setting the annual financial targets used for the ICP, the Committee concluded that it would be appropriate to have a substantial part of their bonus opportunities based on separate strategic measures. The Committee determined that including all four financial measures described above for the ICP were appropriate for the CEO and CFO given the scope of their responsibilities and direct impact on resource allocation decisions. As the CEO and CFO were legacy Discovery, Inc. executives, their 2022 cash bonuses were based on first-half Discovery, Inc. performance and second-half WBD performance. For 2022, the financial targets, weighting and results for the cash bonuses to the Digital Modifier,CEO and CFO were as follows ("Actual Achievement" is after the aforementioned adjustments): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery, Inc. (H1 - Jan. 1, 2022 - June 30, 2022) | Weighting | Threshold | Target | Above Target | Actual Achievement | | Net Revenue ($ in millions) | 25 | % | | $ | 4,402 | | | $ | 6,289 | | | $ | 6,918 | | | $ | 6,097 | | | Adjusted EBITDA ($ in millions) | 25 | % | | $ | 1,400 | | | $ | 2,000 | | | $ | 2,200 | | | $ | 2,128 | | | Adjusted Free Cash Flow ($ in millions) | 25 | % | | $ | 573 | | | $ | 818 | | | $ | 900 | | | $ | 796 | | | Year-End Paid DTC Subscribers (# in millions) | 25 | % | | 16 | | | 22 | | | 24 | | | 24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | WBD (H2 - July 1, 2022 - December 31, 2022) | Weighting | Threshold | Target | Above Target | Actual Achievement | | Net Revenue ($ in millions) | 20 | % | | $ | 16,239 | | | $ | 23,199 | | | $ | 25,519 | | | $ | 21,837 | | | Adjusted EBITDA ($ in millions) | 30 | % | | $ | 3,976 | | | $ | 5,680 | | | $ | 6,248 | | | $ | 5,748 | | | Adjusted Free Cash Flow ($ in millions) | 30 | % | | $ | 1,737 | | | $ | 2,481 | | | $ | 2,729 | | | $ | 2,383 | | | Year-End Paid DTC Subscribers (# in millions) | 20 | % | | 67 | | | 95 | | | 105 | | | 96 | |
The Committee sets annual individual strategic goals for Mr. Zaslav related to our enterprise-wide priorities, and for Mr. Wiedenfels based on the priorities in his role as CFO. The Committee sets updated goals each year based on changing priorities, and there is variation from year to year in both the substance of the annual goals and how they are weighted. The weighting was based on the Committee's determination of the relative priority of each of these goals. For 2022, the Committee set substantially all of the strategic goals for the CEO and CFO following the closing of the WarnerMedia Transaction. These strategic goals were intended to incent the CEO and CFO to take actions that would create long-term value for stockholders and provide a competitive advantage for WBD, and were also designed to complement the financial goals and the separate strategic goals for the CEO's 2022 PRSU awards by focusing on key financial, operational and infrastructure priorities following the closing of the WarnerMedia Transaction. For 2022, Mr. Zaslav’s strategic goals, with weighting based on the Committee’s determination of the relative priority of each, were to: ■lead the post-closing transition, following the WarnerMedia Transaction, including management of separation, integration and other operational matters (20%); ■oversee the pathway to delivering at least $3 billion in synergies beginning in 2023 (30%); ■create practices of financial accountability, transparency, operational discipline and creative coordination, integrating the business and striving toward a "One Company" culture (10%) ■oversee creation of a unified ad sales team (20%); and ■oversee meeting WBD's financial goals (20%). For 2022, Mr. Wiedenfels’ strategic goals, with weighting based on the Committee’s determination of the relative priority of each, were to: ■build a successful finance leadership team, begin implementation of WBD finance operating model, begin finance ERP system transformation (30%); ■drive integration and transformation programs to support delivery of $3 billion in synergies by 2023, and support, sustain and enhance free cash flow generation (30%); and
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■oversee appropriate control environment, ensure continued integrity of financial reporting for company, and prepare the combined company for Sarbanes-Oxley ("SOX") compliance in 2023 (25%). In addition, in February 2022 prior to the closing of the WarnerMedia Transaction, the Committee established a target of an $849 million contribution2022 strategic goal for Mr. Wiedenfels to revenue fromclose the various digital businesses within Discovery. The actual contribution to revenue from these digital businesses was $866 million, which exceeded the target. Based on this over-performance, the Committee approved a 1.0% upward modification of the Corporate 2019 ICP score.Discovery International. The 2019 ICP performance targets for Discovery International (the metric used for 80% of Mr. Perrette’s 2019 bonus) are set forthWarnerMedia Transaction in the following table. The Committee adjusted the performance against the metrics for Discovery International, based on the same categories and adjustments appliedor prior to the Company-wide metrics. In addition to the adjustments discussed above, the Committee also adjusted the Discovery International financial performance for certain intra-company fund transfers.
| | | | | | | | | | | | | | | | | | | | | Discovery International | | Weighting | | | Threshold | | | Target | | | Maximum | | | Actual
Achievement | | Net Revenue ($ in millions) | | | 50 | % | | $ | 3,608 | | | $ | 4,009 | | | $ | 4,409 | | | $ | 4,069 | | Further Adjusted OIBDA ($ in millions) | | | 50 | % | | $ | 732 | | | $ | 1,012 | | | $ | 1,293 | | | $ | 1,084 | |
With respect to the Digital Modifier for Discovery International, the Committee establishedsecond-quarter of 2022, with a targetweighting of a $245 million contribution to revenue from the various digital businesses within Discovery International. The actual contribution to revenue from these digital businesses in Discovery International was $253 million, which exceeded the target. Based on this over-performance, the Committee approved a 1.7% upward modification of the Discovery International 2019 ICP score.
GlobalDirect-to-Consumer15%. The 2019 ICP performance targets for the GlobalDirect-to-Consumer business (the metric used for 80% of Mr. Faricy’s 2019 bonus) are set forth in the following table. The Committee adjusted the performance against the metrics for GlobalDirect-to-Consumer based on the same categories and adjustments applied to the Company-wide metrics. The Committee used the corporate Digital Modifier for the GlobalDirect-to-Consumer business, resulting in a 1.0% upward modification of the GlobalDirect-to-Consumer 2019 ICP score.
| | | | | | | | | | | | | | | | | | | | | Global DTC | | Weighting | | | Threshold | | | Target | | | Maximum | | | Actual
Achievement | | Net Revenue ($ in millions) | | | 75 | % | | $ | 617 | | | $ | 686 | | | $ | 755 | | | $ | 706 | | Further Adjusted OIBDA ($ in millions) | | | 25 | % | | $ | (103 | ) | | $ | (42 | ) | | $ | 20 | | | $ | 3 | |
Assessment of Performance.Performance The determination as to whether the 20192022 ICP financial performance measures were met was made in the 20192022 Annual Bonus Review during the first quarter of 2020,2023, following review of the full-year 20192022 financial statements.results. Based on our financial performance in 20192022 versus the ICP performance targets, and the impact of the Digital Modifier, the Committee funded the Corporate ICP pool for legacy Discovery at 106.5%95.6% of target Discovery Internationaland for legacy WarnerMedia at 104.5% and GlobalDirect-to-Consumer at 105.3%.90.2% of target. The Committee also funded the 2019 performance pool based on our significant over-delivery of our Adjusted Free Cash Flow target as disclosed on page 47. As part of the February 2020 Annual Bonus Review, the Committee determined whetherawarded 2022 cash bonuses to allocate performance pool amounts to each NEO other than the CEO. The performance pool is funded as a total amount; all bonus-eligible employees (other than the CEO) are eligible for an award under the performance pool. For NEOs other than the CEO, the CEO recommends individual awards that are paid as part of the overall annual bonus payout. For 2019, the CEO’s recommendations were based on individual performance, with particular emphasis on actions taken to transform our enterprise to completely realize the cost synergies of the Scripps Networks acquisition, reduce our overall leverage and improve free cash flow performance. Mr. Zaslav provided his assessment of each of Messrs. Campbell, Perrette and FaricyZeiler based on their individual targets and a recommendedthe applicable legacy company ICP awardscore.
In February 2022, the Committee also reviewed the CEO's and CFO's achievement of their respective strategic goals, considering the CEO’s and CFO’s self-assessments and, with respect to Mr. Wiedenfels, the input of the CEO and with respect to Mr. Zaslav, the input of the Board. Based on the performance pool allocationagainst the four financial metrics noted above and the payout scale applicable to the CEO and CFO, the payout for the portion of the CEO's and CFO's 2022 cash bonus that is based on financial metrics is 98.4% of target. With respect to the strategic goals, the Committee determined that each of Mr. Zaslav and Mr. Wiedenfels had exceeded expectations and over-delivered with respect to their respective strategic goals. The Committee specifically noted the following accomplishments for each NEO. The Committee reviewed this recommendation, each NEOs’ self-assessment of individual performance for 2019,Mr. Zaslav and Mr. Zaslav’s reviewWiedenfels: Mr. Zaslav •leadership of the Company's integration and synergy capture goals; •actions to focus the entire enterprise on cost-cutting measures, resulting in the realization of over $1 billion in synergies through the end of 2022; •reimagining of the U.S. ad sales team; and •effective implementation and activation of Company-wide marketing plans around tent pole content to fully leverage WBD's scope and the power of its diverse brands. Mr. Wiedenfels •leadership of all financial aspects of the WarnerMedia Transaction, including the debt issuance, investor communications and regulatory filings; •efforts to establish a Finance leadership team, ensure the continued integrity of the combined Company's financial reporting processes, and begin the process of financial system integration; and •leadership with respect to free cash flow generation and leverage reduction. Actual cash bonus payouts for 2022 performance to each executive’s 2019NEO are as follows: performance. Based on this review, | | | | | | | | | | | | | | | | NEO | Cash Bonus Target
Amount | Payout
Percentage | Cash Bonus Award | | David Zaslav | $ | 22,000,000 | | 99.2 | % | | $ | 21,831,456 | | | Gunnar Wiedenfels | $ | 3,500,000 | | 99.2 | % | | $ | 3,472,000 | | | Bruce L. Campbell | $ | 5,000,000 | | 95.6 | % | | $ | 4,780,000 | | | Jean-Briac Perrette | $ | 5,000,000 | | 95.6 | % | | $ | 4,780,000 | | | Gerhard Zeiler | $ | 3,031,518 | | 90.2 | % | | $ | 2,734,429 | |
In prior years, the Committee, approvedbased on our financial performance, has elected to fund a "performance pool" that would be used to make additional cash bonuses underbonus payments to employees, including the ICPCFO and other NEOs but not the CEO, based on exceptional individual performance. Our CEO's employment agreement provides an opportunity for him to earn up to 125% of his target cash bonus for over-delivery of his financial and strategic objectives. Even though our financial performance in 2022 was sufficient to provide for the funding of a "performance pool" and the Committee believed many of our employees, including each of our NEOs, delivered exceptional performance pool allocationin 2022, the Committee determined that in light of our 2022 stock price performance and focus on free cash flow generation and leverage reduction, it was not appropriate to fund a "performance pool" in 2022. For the same reason, despite exceptional performance from our CEO and his over-delivery of the strategic objectives established for Messrs. Campbell, Perrette and Faricy as set forth inhim by the table below: | | | | | | | | | | | | | NEO | | ICP Target
Amount | | | ICP Payout
Percentage | | | Cash Bonus Award
(ICP+Performance
Pool) | | Bruce Campbell | | $ | 2,781,000 | | | | 106.5 | % | | $ | 4,061,765 | | Jean-Briac Perrette | | £ | 2,668,750 | | | | 104.5 | % | | £ | 3,703,414 | | Peter Faricy | | $ | 1,680,000 | | | | 105.3 | % | | $ | 2,279,712 | |
Committee, the Committee elected to not award any additional or above-target bonus to our CEO for 2022.
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Long-Term Incentive Compensation We make equity awards as part of our long-term incentiveLTI compensation program under our 2013Warner Bros. Discovery, Inc. Stock Incentive Plan.Plan (the "WBD Stock Incentive Plan"). We believe that delivering a substantial portion of an executive’s total direct compensation in equity or equity-type awards helps to align our executives’ interests with those of our stockholders. In 2019,2022, we made long-term equity or equity-type awards to each of the NEOs, which we believe serves to focus their attention on increasing the Company’s value over time.
Annual LTI Review and New Hire/Contract Renewal Awards The Committee generally considers LTI awards to the NEOs in two categories: annual awards, in the same process used for executive-level employees early each year in the Annual LTI Review, and special awards for newly-hired executives or in conjunction with the renewal of an existing fixed-term contract.promotion to a role with larger scope. The Committee made awards to Messrs. Wiedenfels, Campbell Perrette and FaricyPerrette as part of the 20192022 Annual LTI Review which took place in February 2019.2022. Mr. Zaslav’s LTI awards for each year are specified in his employment agreement, although the Committee determines performance metrics for each performance-based award to Mr. Zaslav at the time the award is made. Mr. Zeiler received WBD RSUs on April 8, 2022 upon the closing of the WarnerMedia Transaction in connection with the conversion of his AT&T RSUs. The Committee also made awards to Messrs. Wiedenfels, Campbell and Perrette in 2022 in connection with the entry into new employment agreements with each executive for roles with larger scope. In the Annual LTI Review, as an initial matter, the Committee reviews market data for similar roles in the peer group and determines a target amount for the LTI awards that is expressed as a dollar value. With respect to each NEO other than the CEO, the CEO then reviews the target value approved by the Committee and recommends a dollar value for the award based on each NEO’s individual performance. The Committee approves the overall award value, which is then converted into a number of units, as further described below. For new hire and contract renewal awards to recognize promotion, the Committee follows a similar process, referring to market data, as well as internal equity and the overall compensation terms of the agreement. The Committee determines a target amount expressed as a dollar value, which is then converted into a number of units, as further described below.
Timing of Awards.Awards. The Committee’s intent is to approve equity awards annually in February each year, with new hire promotion, and contractpromotion grants made throughout the year in the Committee’s regular meetings. The Committee uses a consistent effective date for annual grants approved in February of the later of March 1 withor two business days following the approvalfiling of the grants occurring in late February but with a March 1 effective date.Company's Annual Report on Form 10-K. This allows a consistent grant date and vesting schedule for annual awards made to employees and provides for consistent annual grant timing. For new hire promotion, and contractpromotion grants made at other times throughout the year to employees other than the Section 16 Officers, the Committee continued the practice ofhas delegated authority for making such grants to the CEO and Chief People and Culture Officer within certain dollar and share limits. These awards are typically made on the 15th of each month and all awards made pursuant to such delegation are reported to the Committee at regularly-scheduled Committee meetings every two to three months.its next regular meeting. On occasion for administrative convenience, the Committee may make a grant with a future effective date, with the grant price set on the future effective date. For the awards to the NEOs and other Section 16 Officers who entered into new employment agreements in 2022, the Committee granted the awards in connection with execution of the applicable agreement, however all awards were unitized using our closing stock price on July 14, 2022 to ensure no executive was benefited or harmed by fluctuations in stock price. Our practice of setting regular equity award grant dates based on scheduled Committee meetings, and adopting a consistent date for the annual and off-cycle grants is designed to avoid the possibility that the Companywe could grant stock awards prior to the release of material,non-public information which is likely to result in an increase in its our stock price, or to delay the grant of stock awards until after the release of material,non-public information that is likely to result in a decrease in the Company’s stock price. 2019 Long-Term Incentive Awards
The following chart summarizes the equity awards made in 2019 to each NEO. Because the stock option awards for Mr. Zaslav were specified in the Zaslav 2018 Employment Agreement as a number of units rather than an overall target value, we have included the grant date fair value for those awards in the column that specifies the 2019 target amount for the other NEOs.
| | | | | NEO
| | 2019 Target
Amount or FMV | | 2019 LTI Awards | David M. Zaslav,
CEO
| | $10,251,456
$3,199,771
$6,954,772
Total value:
$20,405,999
| | 352,526 Series A PRSUs
117,509 Series A PRSUs
989,229 Stock Options
| | | | Gunnar Wiedenfels,
CFO
| | $1,750,000
$1,750,000
Total value:
$3,500,000
| | 185,184 stock options
60,554 RSUs (annual)
| | | | Bruce L. Campbell,
Chief Development, Distribution & Legal Officer
| | $1,600,000
$1,600,000
Total value:
$3,200,000
| | 169,311 stock options
55,364 RSUs (annual)
| | | | Jean-Briac Perrette,
President and CEO,
Discovery International
| | $1,750,000
$1,750,000
$4,000,000
Total value:
$7,500,000
| | 185,184 stock options
60,554 RSUs (annual)
140,057 RSUs (contract
renewal)
| | | | Peter Faricy,
CEO, GlobalDirect-to-Consumer
| | $1,600,000
$1,600,000
Total value:
$3,200,000
| | 169,311 stock options
55,364 RSUs (annual)
|
2019
2022 Long-Term Incentive Awards to CEO Under the Zaslav 2018 Employment Agreement, Mr. Zaslav received the following awards in 2019:
an award of 989,299 options in Series A common stock on January 2, 2019, with a grant price of $33.24 (121.55% of the closing price on July 16, 2018, the date the Zaslav 2018 Employment Agreement was approved) and which vest 100% on the last day of the term of the employment agreement, December 31, 2023;
an award of 352,526 Series A PRSUs on March 1, 2019 which vested on March 1, 2020 based on our revenue, Adjusted OIBDA and Adjusted Free Cash Flow performance during 2019; and
an award of 117,509 Series A PRSUs on March 18, 2019 which vested on March 18, 2020 based on our revenue, Adjusted OIBDA and Adjusted Free Cash Flow performance during 2019.
The design of Mr. Zaslav’s compensation in his employment agreement emphasizes stockholder alignment through tying the vast majority of his compensation to DiscoveryWBD equity and requiring substantial stock holdings,holdings. Mr. Zaslav received an award of 427,808 PRSUs on March 1, 2022 with a one-year performance period that ended on December 31, 2022. The 2022 PRSU awards to Mr. Zaslav consisted of: ■an award of 106,952 PRSUs, which vested at 93.7% on February 27, 2023 based on the Committee’s certification of the Company’s performance against the financial goals it established for these PRSUs - Revenue, Adjusted EBITDA, Adjusted Free Cash Flow and Year-End Paid DTC Subscribers; and
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■an award of 320,856 PRSUs, which vested at 100% on February 27, 2023 based on the Committee’s assessment of Mr. Zaslav’s performance versus the strategic goals it established for these PRSUs, which are more fully described below. Performance vs. Financial Goals for PRSUs awarded to CEO in 2022 The performance against the financial goals established for the CEO’s 2022 PRSUs are set forth in the following tables. As with respectthe ICP and cash bonuses to the stock option grant made in 2019 underCEO and CFO, the Zaslav 2018 Employment Agreement, requiring substantial and sustained increase in share priceCommittee used Discovery, Inc. performance for the first half of the year and combined WBD performance for the second half of the year. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Target | | Performance | Weighted
Payout | H1 PRSU Performance
($ in millions) | Target
Weighting | PRSU
Target | | 2022 | Performance
against
Target | | Revenue | 25% | | $ | 6,289 | | | | $ | 6,097 | | 96.9 | % | 22.5 | % | | Adjusted EBITDA | 25% | | $ | 2,000 | | | | $ | 2,128 | | 106.4 | % | 25.0 | % | | Adjusted Free Cash Flow | 25% | | $ | 818 | | | | $ | 796 | | 97.3 | % | 22.7 | % | | Year-End Paid Subscribers | 25% | | 22 | | | 24 | | 106.7 | % | 25.0 | % | | TOTAL | 100.0% | | | | | | | 95.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Target | | Performance | Weighted
Payout | H2 PRSU Performance
($ in millions) | Target
Weighting | PRSU
Target | | 2022 | Performance
against
Target | | Revenue | 20% | | $ | 23,199 | | | | $ | 21,837 | | 94.1 | % | 16.1 | % | | Adjusted EBITDA | 30% | | $ | 5,680 | | | | $ | 5,748 | | 101.2 | % | 30.0 | % | | Adjusted Free Cash Flow | 30% | | $ | 2,481 | | | | $ | 2,383 | | 96.0 | % | 26.0 | % | | Year-End Paid Subscribers | 20% | | 95 | | | 96 | | 101.1 | % | 20.0 | % | | TOTAL | 100.0% | | | | | | | 92.1 | % |
Performance vs. Strategic Goals for PRSUs awarded to CEO in 2022 In February 2022, the Committee established the following strategic goals for the 2022 PRSU awards granted to the CEO in 2022. These strategic goals were intended to incentivize the CEO to take actions that would create long-term value for stockholders and provide a competitive advantage for WBD, and were also designed to complement the separate strategic goals for the CEO's 2022 cash bonus by focusing on content development, reach and engagement and human capital priorities. The strategic goals for the CEO's 2022 PRSU awards were: ■finalize and close the WarnerMedia Transaction (15%); ■design an effective organization structure and establish a best in class leadership team, make effective use of human capital; ■maintain momentum on DTC subscriber growth, retention and engagement; and ■develop new, and continue to improve in existing event programming and big swing content across brands, networks, platforms and geographies. The Committee assessed Mr. Zaslav’s 2022 performance against these goals and determined that he met 100% of the strategic goals established for his 2022 PRSU awards. The Committee noted the CEO's tremendous leadership during an especially challenging year and specifically considered his actions to finalize and close the WarnerMedia Transaction in a mere 11 months, appoint a best-in-class leadership team across all corporate functions and creative roles, lay the foundation for the 2023 launch of the Company's combined streaming service, and continue to deliver value.compelling content across the Company's brands, networks, platforms and geographies. 2019Based on 2022 performance versus the metrics set forth above, the Committee certified the vesting of the 1-Year Target PRSUs granted to Mr. Zaslav at 98.4%. For the PRSUs that vested in February 2023, 70% of the shares were distributed at the time of vesting, and 30% will be distributed in 2024 subject to Mr. Zaslav’s continued employment and the other terms and conditions of the award.
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2022 Long-Term Incentive Awards to Other NEOs For 2019,2022, NEOs other than the CEO received grants of RSUs as part of the Annual LTI Review in February 2022 (Messrs. Wiedenfels, Campbell and Perrette), upon conversion of AT&T RSUs into WBD RSUs in connection with the closing of the WarnerMedia Transaction (Mr. Zeiler) and in connection with their entry into new employment agreements for roles with larger scopes of responsibility (Messrs. Wiedenfels, Campbell and Perrette). Stock options and PRSUs were not part of the awards to Messrs. Wiedenfels, Campbell, Perrette and Faricy weregranted during the Annual LTI Review in February 2022 because the formterms of the transaction documents for the WarnerMedia Transaction prohibited the granting of stock options and RSUs (50% ofor PRSUs to legacy Discovery employees, other than the target valueCEO, prior to closing. The RSU awards granted to NEOs in stock options with respect to the Company’s Series A common stock, 50% in RSUs with respect to the Company’s Series A common stock. The Committee adopted this long-term incentive design for NEOs after reviewing market trends and best practices and concluding that these awards would:provide appropriate incentives;
link the interests of our senior executives to those of our stockholders; and
serve as a retention tool.
Stock Options
The stock option awards2022 have a four-year vesting schedule, become exercisable (while the holder remains employed)vesting in four equal tranchesinstallments on each of 25% on the first four anniversaries of the date of grant, expire on the seventh anniversary of the date of grant, assuming continued employment, and are otherwise consistent with the terms of the applicable plan and award agreement. The approved value is converted into a number of stock options based onfollowing chart summarizes the Black-Scholes value ofequity awards made in 2022 to each NEO (other than the stock option using the closing price of our Series A common stock on the Nasdaq Global Select Market. In 2019, the Committee continued the practice of using the Black-Scholes valuation of the stock options as of the last trading day of the month prior to the date of grant and the closing price of the Series A common stock as of the trading day before the date of grant with respect to these calculations. This administrative practice allows more efficient processing of equity grants.
RSUs
The RSU awards have a four-year vesting schedule, vesting in three substantially equal tranches, the first 33% on March 1 after the second anniversary of the date of grant and the remaining 33% and 34% on March 1 following the third and fourth anniversaries, assuming continued employment, and are otherwise consistent with the terms of the applicable plan and award agreement. The approved value is converted into a number of RSUs based on the closing price of our Series A common stock on the Nasdaq Global Select Market on the last trading day prior to the date of grant.
Payouts under PRSU Awards with Performance Periods Ending in 2019
In February 2020, the Committee reviewed achievement of the performance thresholds for PRSU awards with performance periods that ended on December 31, 2019. Messrs. Zaslav, Campbell and Perrette held these awards as noted in the table below:
CEO). | | | | | | | | | | | | | | | Award Type
NEO | | Performance Period2022 Target
Amount or FMV | | Executive(s) with Award2022 LTI Awards | 3-Year Target PRSUs awarded in 2017
Gunnar Wiedenfels, CFO | | 2017-2019 | $ | Zaslav, Campbell, Perrette6,000,000 | | 213,904 RSUs 146,736 RSUs | 2-Year Target PRSUs awarded in 2018
| | 2018-2019$ | 2,000,000 | Zaslav | 1-Year Target PRSUs awarded in 2019
Total value: | | 2019$ | 8,000,000 | Zaslav | Bruce L. Campbell,
Chief Revenue and Strategy Officer | | | $ | 4,500,000 | | 160,428 RSUs 146,736 RSUs | | | $ | 2,000,000 | | | Total value: | | $ | 6,500,000 | | Jean-Briac Perrette,
President and CEO,
Global Steaming and Games | | | $ | 4,400,000 | | 156,863 RSUs 146,736 RSUs | | | $ | 2,000,000 | | | Total value: | | $ | 6,400,000 | | Gerhard Zeiler,
President, International | | | $ | 3,178,270 | | 130,097 RSUs
| | Total value: | | $ | 3,178,270 | |
As discussed above under “Comparative Financial Measures,” with respect to the awards granted to Messrs. Campbell and Perrette in 2017, the Committee reviewed the Company’s performance relative to the applicable peer group during the three-year performance and determined that the Company’s performance was strong relative to its peers. Accordingly, the Committee decided not to exercise its discretion to reduce the number of shares payable upon settlement of these awards.
The Committee then reviewed the Company’s performance against the three financial metrics and concluded that the Company had met or exceeded the Net Revenue, Adjusted OIBDA, and Adjusted Free Cash Flow metrics during the relevant performance periods when measured on a currency-neutral basis. The multi-year performance metrics are set based on foreign exchange rates prevailing at the time the metrics are established. In 2017, the Committee determined to measure the results using the same constant foreign exchange
rates, so that the comparison would not be influenced by fluctuations in the foreign exchange environment. The Committee concluded that it was appropriate to measure performance without the effect of currency fluctuation as management has little or no control over the impact of foreign exchange rates. This adjustment increased the performance against the metrics by less than 1%.
The metrics for all of the PRSUs were based on the Company’s long-range plans as constructed in the year of grant, with moderation as deemed appropriate by the Committee to address the length of the period being measured. These long-range plans were developed on a constant currency basis, and target amounts may vary accordingly.
The performance against the performance metrics for each award is set forth in the tables that follow:
3-Year Target PRSUs awarded in 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3-Year PRSU Performance
($ in millions) | | Target | | | Performance | | | | | | | | Target
Weighting | | | Cumulative
PRSU
Target
($) | | | 2017
($) | | | 2018
($) | | | 2019
($) | | | Cumulative
($) | | | Performance
against
Target | | Revenue | | | 20 | % | | | 19,130 | | | | 6,867 | | | | 9,019 | | | | 10,972 | | | | 26,858 | | | | 140 | % | Adjusted OIBDA | | | 40 | % | | | 6,659 | | | | 2,540 | | | | 3,410 | | | | 4,641 | | | | 10,591 | | | | 159 | % | Adjusted Free Cash Flow | | | 40 | % | | | 3,606 | | | | 1,502 | | | | 1,816 | | | | 3,224 | | | | 6,541 | | | | 181 | % |
2-Year Target PRSUs awarded in 2018
| | | | | | | | | | | | | | | | | | | | | | | | | 2-Year PRSU Performance
($ in millions) | | Target | | | Performance | | | | | | | | Target
Weighting | | | Cumulative
PRSU
Target
($) | | | 2018
($) | | | 2019
($) | | | Cumulative
($) | | | Performance
against
Target | | Revenue | | | 20 | % | | | 14,102 | | | | 9,236 | | | | 11,287 | | | | 20,523 | | | | 146 | % | Adjusted OIBDA | | | 40 | % | | | 4,781 | | | | 3,449 | | | | 4,704 | | | | 8,152 | | | | 171 | % | Adjusted Free Cash Flow | | | 40 | % | | | 2,682 | | | | 1,848 | | | | 3,272 | | | | 5,120 | | | | 191 | % |
1-Year Target PRSUs awarded in 2019
| | | | | | | | | | | | | | | | | 1-Year PRSU Performance
($ in millions) | | Target | | | Performance | | | | | | | | Target
Weighting | | | PRSU
Target
($) | | | 2019
($) | | | Performance
against
Target | | Revenue | | | 20 | % | | | 11,085 | | | | 11,243 | | | | 101 | % | Adjusted OIBDA | | | 40 | % | | | 4,643 | | | | 4,705 | | | | 101 | % | Adjusted Free Cash Flow | | | 40 | % | | | 2,570 | | | | 3,247 | | | | 126 | % |
Based on our cumulative performance for each of these periods, the Committee certified the vesting of the3-Year Target PRSUs granted to Messrs. Zaslav, Campbell and Perrette at 100% and certified the vesting of the2-Year Target PRSUs and1-Year Target PRSUs granted to Mr. Zaslav at 100%. For the awards to Messrs. Campbell and Perrette, 100% of the shares vested in 2020, with 50% distributed at the time of vesting and the remaining 50% to be distributed in February 2021 based on the executive’s continued employment and the other terms and conditions of the award. For the awards to Mr. Zaslav, 100% of the shares vested in 2020, with 50% distributed at the time of vesting, and 25% to be distributed in each of 2021 and 2022 based on his continued employment and the other terms and conditions of the award.
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Retirement Plans and Other Benefits Retirement Benefits
The U.S.-based NEOs generally participate in the same benefit plans and on the same terms as are offered to other U.S.-based full-time employees. We offer a 401(k) defined contribution plan as well as anon-qualified Supplemental Deferred Compensation Plan (the “SRP”) that is available to U.S.-based senior employees, including all of the NEOs other than Mr. Perrette. The eligible NEOs participate in these plans on the same terms and conditions as other eligible employees.
To encourage participation in the 401(k) plan, the Company makes a matching contribution of (i) 100% of the employee’s first 3% of salary contributions to the defined contribution plans and (ii) 50% of the employee’s next 3% of salary contributions, up to a maximum amount of 4.5% of eligible base salary in the form of Company matching contributions, subject to certain limits under applicable tax regulations. The Company does not make matching contributions into the SRP. In addition to base salary deferrals, participants in the SRP are also permitted to defer portions of their annual bonus awards into their SRP accounts. The 401(k) and SRP accounts offer the same investment options, with the amounts actually invested for the 401(k) plan and with earnings measured hypothetically for the SRP.
We believe the SRP is necessary to allow employees who would otherwise be limited by IRS restrictions on the amount of compensation that may be considered in participation in the Company’s 401(k) plan to save a proportionate amount for retirement and support the goals of providing competitive compensation packages to our employees.
Mr. Perrette is employed in the U.K. and participates in the Company’s benefit plans and programs as offered to other U.K.-based Company employees. These benefits include a defined contribution pension plan.
For more information about the SRP, please refer to the 2019Non-Qualified Deferred Compensation Table on page 59 under “Executive Compensation Tables” below.
| | | | | | | | | | | | | Retirement Benefits | | | | | | | | | | | Our U.S.-based NEOs generally participate in the same benefit plans on the same terms as are offered to other U.S.-based full-time employees. We offer a 401(k) defined contribution plan as well as a non-qualified Supplemental Retirement Plan (the “SRP”) that is available to U.S.-based senior employees, including all of the NEOs other than Mr. Zeiler. The eligible NEOs participate in these plans on the same terms and conditions as other eligible employees. To encourage participation in the 401(k) plan, we make a matching contribution of (i) 100% of the employee’s first 3% of salary contributions to the defined contribution plans and (ii) 50% of the employee’s next 3% of salary contributions, up to a maximum amount of 4.5% of eligible base salary in the form of matching contributions, subject to certain limits under applicable tax regulations. We do not make matching contributions into the SRP. In addition to base salary deferrals, participants in the SRP are also permitted to defer portions of their annual bonus awards into their SRP accounts. The 401(k) and SRP accounts offer the same investment options, with the amounts actually invested for the 401(k) plan and with earnings measured hypothetically for the SRP. We believe the SRP is necessary to allow employees who would otherwise be limited by IRS restrictions on the amount of compensation that may be considered in participation in our 401(k) plan to save a proportionate amount for retirement and support the goals of providing competitive compensation packages to our employees. Mr. Zeiler is employed in Austria and participates in the Company’s benefit plans and programs as offered to other Austria-based Company employees. Mr. Perrette was also employed in the U.K. for a portion of 2022 and participated in the Company's U.K. benefit plans and programs during his time in the U.K. Mr. Perrette relocated back to the U.S. during 2022 and has since transitioned to participating in our plans for U.S.-based employees. For more information about the SRP, please refer to the 2022 Nonqualified Deferred Compensation Table under “Executive Compensation Tables” below. | | | Health, Welfare and Other Personal Benefits | | | | | | | | | The U.S.-based NEOs are eligible to participate in the health, welfare and fringe benefits we generally make available to our U.S.-based regular full-time employees, such as basic and supplemental life insurance, short and long-term disability, commuter reimbursement, fitness reimbursement and access to legal resources. Mr. Zeiler is based in Austria and is eligible to participate in the health, welfare and fringe benefits we generally make available to our Austria-based regular full-time employees. Mr. Perrette was based in the U.K. for a portion of 2022 and participated in our U.K. benefits program during his time in the U.K. Mr. Perrette relocated back to the U.S. during 2022 and has since transitioned to participating in our plans for U.S.-based employees. In addition, we provide the following perquisites and other personal benefits to our NEOs: | | | | | | | | | | | Relocation Expenses and International Assignment Benefits | We provide relocation and international assignment benefits consistent with our international long-term assignment policies, including reimbursing relocation costs, offering education and other allowances, providing tax equalization benefits, which are intended to maintain the executive’s out of pocket tax liabilities at the same level they would have been had the executive not been assigned to a foreign jurisdiction and, for some benefits, paying the executive an amount equal to the tax resulting from the reimbursement or allowance (a “gross-up”). Mr. Perrette was assigned to the U.K. for a portion of 2022 and received tax preparation assistance and repatriation benefits. During 2022, Mr. Perrette was relocated back to the U.S. and received relocation benefits under our standard relocation policies. | | |
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| | | | | | | | | | | | | Aircraft Usage | To facilitate executive travel for our global media and entertainment business, we own and operate two corporate aircraft, lease a third dedicated corporate aircraft and also have an agreement with NetJets Inc. where we lease the right to a specified amount of travel each calendar year on NetJets’ aircraft (collectively, "WBD Aircraft"). In 2022, as a result of the WarnerMedia Transaction and the subsequent expansion of our business operations, our executives and, in particular, our CEO, were required to frequently travel between the East and West coasts of the United States, as well as to other domestic and international locations. Per the terms of his employment agreement, Mr. Zaslav is permitted to utilize the WBD Aircraft for up to 250 hours of personal flight time each year. The first 125 hours are provided to him at the Company's expense, and, with respect to the second 125 hours, Mr. Zaslav is required to reimburse the Company at a rate of two times the cost of fuel, as provided in the aircraft time-sharing agreement between the Company and Mr. Zaslav. Family members may accompany Mr. Zaslav on authorized business flights on WBD Aircraft at no aggregate incremental cost to the Company. We typically provide a gross-up to Mr. Zaslav to cover taxes for imputed income arising when a family member accompanies him on business travel at the request of the Company (e.g., when Mr. Zaslav’s spouse accompanies him to a business event in which attendance by a spouse is customary and serves our business interests). | | | | | | | | Home Office Expenses, Security Expenses & Car Allowance | We provide Mr. Zaslav with home office audio-visual and computing equipment and reimburse Mr. Zaslav for limited home office expenses, including Internet access. We also provide Mr. Zaslav with a monthly car allowance as provided in his employment agreement, and we provide personal security services to ensure Mr. Zaslav's safety. For more information regarding the perquisites provided in 2022 to each NEO, please refer to the “All Other Compensation” column of the 2022 Summary Compensation Table. | | |
Other Personal BenefitsThe U.S.-based NEOs are eligible to participate in the health, welfare and fringe benefits we generally make available to our U.S.-based regular full-time employees, such as basic and supplemental life insurance, short and long-term disability, commuter reimbursement, fitness reimbursement and access to legal resources. Mr. Perrette is based in the U.K. and is eligible to participate in the health, welfare and fringe benefits we generally make available to our U.K.-based regular full-time employees, such as life insurance benefits, short- and long-term disability, and an employer pension scheme.
In addition, we provide the following perquisites and other personal benefits to our NEOs:
Relocation Expenses and International Assignment Benefits; RelatedGross-Up
Consistent with our objective to attract and retain a high-performing executive management team for senior roles in our global business, we place high performing executives on international assignments to fill key roles in the places where we do business. We provide relocation and international assignment benefits consistent with our international long-term assignment policies, including reimbursing relocation costs, offering education and other allowances, providing tax equalization benefits, which are intended to maintain the executive’s out of pocket tax liabilities at the same level they would have been had the executive not been assigned to a foreign jurisdiction and, for some benefits, paying the executive an amount equal to the tax resulting from the reimbursement or allowance (a“gross-up”). Mr. Perrette had served initially in his role as an expatriate but was transferred to local pay and benefits in connection with his new employment agreement in 2016. After his localization in June 2016, Mr. Perrette no longer retains any international assignment-related benefits, other than his continuing eligibility for ongoing tax preparation assistance, and repatriation benefits in the event Mr. Perrette’s employment is
Compensation-Related Mattersterminated without Cause (as defined in his employment agreement) or due to the Company’s decision not to renew the employment agreement at the end of the term. For a description of Mr. Perrette’s employment agreement, see “Executive Compensation—Executive Compensation Arrangements,” below.
Mr. Faricy was provided with corporate housing for the first 10 months of his employment under the terms of his employment agreement. This cost of the housing is considered taxable income to him and is eligible forgross-up.
Aircraft Usage; RelatedGross-Up
We lease a dedicated corporate aircraft and also have an agreement with NetJets Inc. pursuant to which we lease the right to a specified amount of travel each calendar year on NetJets’ aircraft. We allow Mr. Zaslav to use a portion of our allotted travel time on our corporate aircraft, or NetJets aircraft, for personal use.
Under the Zaslav 2018 Employment Agreement, Mr. Zaslav is permitted to use up to 200 hours of flight time each year for personal use. The first 100 hours are provided to him by the Company. With respect to the second 100 hours, Mr. Zaslav is required to reimburse the Company at a rate of two times fuel cost, under a time-sharing agreement entered between the Company and Mr. Zaslav. For details regarding Mr. Zaslav’s employment agreement, please see “NEO Employment Agreements.”
Family members may accompany Mr. Zaslav on authorized business flights on corporate aircraft or NetJets flights at no aggregate incremental cost to the Company. For 2019, we provided agross-up to Mr. Zaslav to cover taxes for imputed income arising when a family member accompanied him on business travel at the request of the Company (e.g., when Mr. Zaslav’s spouse accompanied him to a business event in which attendance by a spouse is customary and serves our business interests).
Home Office Expenses & Car Allowance
We reimburse Mr. Zaslav for limited home office expenses, including Internet access. We also provide Mr. Zaslav with a monthly car allowance as provided in his employment agreement
For more information regarding the perquisites provided in 2019 to each NEO, please refer to the “All Other Compensation” column of the 2019 Summary Compensation Table.
OTHER COMPENSATION-RELATED MATTERS
Risk Considerations in our Compensation Programs In view of the current economic and financial environment, the Committee has reviewed the design and operation of our incentive compensation arrangements. The Committee has determined that these arrangements do not provide our employees with incentive to engage in business activities or other actions that would threaten our value or the investment of our stockholders, or that would otherwise be reasonably likely to have a material adverse effect on us. The outside consultantconsultants to the Committee, Pay Governance and Croner, assisted the Committee in its risk assessment of our executive compensation programs in meetings throughout 20192022 and advised the Committee in reaching this conclusion as to those plans; however, Croner did not participate in the assessment of risk with respect tonon-executive compensation arrangements.plans. Executive Stock Ownership Policy In 2012, the Committee adopted an
We have a robust executive stock ownership policy that applies to each of the NEOs. The policy requires each NEO to hold a specified amount of our stock, calculated as a multiple of the executive’s base salary, as described in the table below. In 2015, the Committee increased the stock ownership requirement for Mr. Zaslav from five times base salary to six times base salary. | | | | | | | | | Position | | Requirement
(multiple of base salary) | | | Timeframe to reach
(from later of effective
date or
becoming
covered by policy) | | CEO
CEO* | 6X | | 6X | | | | 5 years | | Other NEOs | 2X | | 2X | | | | 5 years | |
* Mr. Zaslav is also required to hold an additional 1,500,000 shares of common stock pursuant to his employment agreement.
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The Committee determined that any shares of our stock beneficially owned by the covered executive, as well as unvested awards of PRSUs and RSUs, but not shares underlying unvested or unexercised stock options, would be counted for purposes of meeting the stock holding target. Once an executive meets the target, the executive is expected to maintain holdings at the target for as long as he or she remains in a role that is identified as a covered executive under the policy.Thepolicy.The Committee may consider failure to meet the requirements of the policy in making compensation decisions for a covered executive and may take any other action appropriate to support the intent of the policy, including requiring an executive to retain a percentage of shares pursuant to stock option exercises or vesting events in future years.
In December of 2019,2022, the Committee reviewed the NEOs’ progress toward meeting the requirements of the executive stock ownership policy. Each of the NEOs hasat the time of the review had met theor was on track to meet their respective stock holding requirement.Mr. Zaslav is also subject to certain stock holding requirements pursuant to the Zaslav 2018 Employment Agreement as described in “NEO Employment Agreements,”requirements. Please see "Stock Ownership—Security Ownership of Management" on beginning on page 34. For 2019, Mr. Zaslav was required to hold 1,800,000 shares89 for additional information on the stock ownership of our stock,CEO and for 2020, Mr. Zaslav will be required to hold 2,220,000 sharesother NEOs.
Clawback Policy All of our stock. Mr. Zaslav met his 2019 requirement and, as of the date of this proxy statement, has also met his 2020 requirement. Mr. Zaslav also is required to retain all shares realized upon exercise of the stock options granted as contemplated by the Zaslav 2018 Employment Agreement, net of shares used to pay the exercise price and taxes on exercise, until he separates from employment.Tax Implications
Section 162(m) of the Internal Revenue Code of 1986 (“Section 162(m)”) was the U.S. federal tax provision that generally limited the tax deductibility of compensation paid to “covered employees” to $1 million. Performance-based compensation paid through calendar year 2017 was not subject to the limits on deductibility of Section 162(m), provided such compensation met specified requirements, including stockholder approval of material terms of compensation. Deductibility of performance-based compensation under Section 162(m) was eliminated by the Tax Cuts and Jobs Act of 2017 effective January 1, 2018, subject to transition rules. In addition, the definition of “covered employees” under Section 162(m) was amended to expand the definition of “covered employees.” As such, effective January 1, 2018 “covered employees” include any person who was the chief executive officer or chief financial officer at any time during the tax year, as well as the next three most highly paid NEOs as of the last day of the taxable year. In addition, any person who was a covered employee as of January 1, 2017 or becomes a covered employee thereafter will remain a covered employee in perpetuity.
As a result, for taxable years beginning after December 31, 2017, all compensation in excess of $1 million paid to each of the executives described above (other than certain grandfathered compensation) will not be deductible by us. The Committee considers tax deductibility in making compensation decisions, to the extent
deductibility is reasonably practicable and consistent with our other compensation objectives. The change in law was a factor in the Committee’s determining to make awards of RSUs rather than PRSUs to NEOs other than the CEO in the February 2019 Annual LTI Review.
Clawback Policy
All employees are subject to aour compensation “clawback” policy, adopted by the Committee in 2010.policy. Under this policy, in addition to any other remedies available to us (but subject to applicable law), if the Board, or the Committee, determines that any employee has engaged in fraud or misconduct that resulted in a financial restatement, we may recover, in whole or in part, any bonus or other incentive-based or equity-based compensation, received by the employee from us in the 12 months after the filing of the financial statement that was found to benon-compliant. The Committee determined that it was appropriate to adopt theadopted this policy to provideas a further deterrent to fraudulent activity.
The Company will update its clawback policy to comply with the relevant Nasdaq listing standards, once finalized. Hedging and Derivative Trading Transactions Hedging of our stock by
Our insider trading policy prohibits employees, including the NEOs, is permitted with the prior approval ofand our General Counsel. In 2019, none of our NEOs engageddirectors from engaging in any hedging transactions. This policy applies to all of our employees.Our Company prohibits certain derivative transactions in our stock by the NEOs, as well as certain other officers, directors and their families.transactions. Specifically, they may not, at any time:
■trade in any public puts, calls, covered calls or other derivative products involving Company securities; or ■engage in short sales of Company securities.
Hedging of our stock by the NEOs is only permitted with the prior approval of our General Counsel. In 2022, none of our NEOs engaged in any hedging transactions. Impact of the Most Recent Say on Pay Vote At our annual meeting of stockholders held on MayJune 18, 20172020 (the “2017“2020 Annual Meeting”), we held an advisory vote on executive compensation, or “Say on Pay” vote, and a majority of stockholders voted in favor of our executive compensation program at that meeting. We also held an advisory vote at our 2017 Annual Meeting for stockholders to indicate how frequently we should conduct future advisory votes on executive compensation, or “Say on Pay” votes. Stockholders at the 2017 Annual Meetingpreviously voted in concurrence with the Board’s recommendation to hold future “Say on Pay” votes every three (3) years, meaning the most recentnext “Say on Pay” vote was the vote takenwill take place at the 2017 Annual Meeting. We are holding a “Say on Pay” vote at the 20202023 Annual Meeting as described in Proposal 3, appearingof Stockholders. See "Proposal Three—Advisory Vote to Approve Named Executive Officer Compensation ("Say on Pay") on page 79.79 for additional information on the 2023 "Say on Pay" vote. Our executive compensation program is designed to pay for performance and effectively balance executive and stockholder interests. The Committee considered the outcome of the “Say on Pay” vote from the 20172020 Annual Meeting, and continues to believe that our executive compensation structure, which includes long-term agreements with each of our NEOs and delivers a significant majority of NEO compensation in performance-based vehicles, is effective in meeting our compensation objectives. While the Committee has maintained its overall compensation philosophy since the 2020 Annual Meeting, it recognized the opportunity to set a go-forward executive compensation program for a larger, more multifaceted organization. Based on detailed consideration and the feedback it received from stockholders during its 2022 engagement efforts, the Committee is implementing several elements that stockholders recommended in its 2023 executive compensation program, as described on page 63 "Looking Ahead: 2023 Executive Compensation Changes". In addition, the Committee recommended to the WBD Board, and the WBD Board is recommending to stockholders that future "Say on Pay" advisory votes take place every year. See "Proposal Four—Advisory Vote on the Frequency of Future "Say on Pay" Votes" on page 80.
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Looking Ahead: 2023 Executive Compensation Program During the fall of 2022, our Board Chair and the Chair of the Committee met with several of our largest stockholders, as further described on page 49 above. The Committee has made materialalso met several times with its independent compensation consultants to ascertain how it might adjust the Company's executive compensation program for 2023 in order to better align with stockholder expectations and compensation best practices. The Committee ultimately decided to implement the following changes for the 2023 Executive Compensation Program: ■Reintroduced stock options for NEOs (other than the CEO who received an option grant upon execution of his employment agreement) to provide an element of executive compensation that is directly tied to stock price appreciation; ■Reintroduced PRSUs for NEOs (other than the CEO, who already receives PRSUs annually pursuant to his employment agreement) that will be earned based on Company performance against a designated financial metric over a one-year performance period (2023) and the Company's relative TSR, as compared to its peers in the S&P 500 Media and Entertainment Index, over a three-year period (2023-2025). This element will incent short-term financial performance while also rewarding stock price appreciation relative to peers; and ■Differentiated the financial metrics being used in the 2023 annual cash bonus programs for the NEOs and the CEO and CFO and the metrics being used in the 2023 LTI program, to incent our leadership team to deliver across several key financial objectives. The Committee is also very cognizant of the importance for the Company's long-term financial health to reduce its leverage. In furtherance of these objectives, on March 6, 2023, the Committee announced its decision to implement an incremental incentive compensation program designed to promote and reward achievement of the Company’s initiatives with regard to increasing free cash flow and reducing leverage. As part of this program, in addition to our normal annual awards of equity-based incentive compensation awards, in 2023 the Committee determined it would do the following: ■make approximately $11.75 million of one-time, non-recurring grants of PRSUs to certain of our executive officers, including each of our NEOs (other than our CEO), as well as to select other executives with functional responsibility for cash flow management, debt reduction and synergy achievement; ■establish a separate pool of approximately $15 million of RSUs to recognize other employees throughout the organization, whose retention and efforts are also important to the overall success of the Company and these initiatives; and ■amend our CEO's employment agreement to, among other things: ■create upside potential (up to 200% of target) on his annual PRSU awards in 2023, 2024 and 2025 for over-delivery of a specific financial metric to be determined by the Committee each year. For 2023, the selected metric will be adjusted free cash flow; ■provide an additional grant of $11.5 million of PRSUs in 2023, 2024 and 2025 which will be based on a financial metric and could be earned at 200% of target for over-performance. For 2023 this metric will be adjusted free cash flow; ■shift the CEO's annual cash bonus mix, beginning in 2023, from 50% financial/50% strategic to 70% financial/30% strategic; ■provide flexibility for the Committee to set a one- or two-year performance period for his PRSU grants in 2023, 2024 and 2025; and ■shift the distribution schedule for the CEO's annual PRSUs and additional PRSUs to provide that 70% of any earned awards will be distributed at vesting, with the remaining 30% not distributed until the earlier to occur of three years after vesting or six months following his termination. For additional information on these changes, please see the Company's Current Report on Form 8-K filed with the SEC on March 6, 2023. The March 2023 changes to our executive compensation program design or philosophy sinceare designed to further incentivize the 2017 Annual Meeting.Company’s employees, including members of our leadership team and others whose efforts are critical to achieving the key near-term financial objectives of increased free cash flow and reduced leverage. The Committee also believes that holding a “Say on Pay” vote every three years is a reasonable frequency because it allows for an appropriate interval between each vote, giving the Committee and the Board an opportunitybelieve that these additional incentives offer a more competitive package against the backdrop of ongoing industry-wide transformation and economic headwinds, and better position the Company to evaluate the resultsadvance core drivers of the prior vote, as well as enabling our stockholders to assess the impact of our executive compensation policies and decisions. Consistent with our view that our executive compensation program should serve as an incentive and retention tool, we take a long-term view of executive compensation and encourage our stockholders to do the same. A triennial vote will also give our Board sufficient time to engage with stockholders to better understand their views about executive compensation and respond effectively to their concerns. stockholder value. EXECUTIVE COMPENSATION TABLES
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Executive Compensation Tables The following tables set forth compensation information for our NEOs. 2019
2022 Summary Compensation Table | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary
($)(1) | | | Stock
Awards
($)(2) | | | Option
Awards
($)(3) | | | Non-Equity
Incentive
Plan
Compensation
($)(4) | | | All Other
Compensation
($)(5) | | | Bonus
($) | | | Total
($) | | David M. Zaslav | | | 2019 | | | | 3,000,000 | | | | 13,451,226 | | | | 6,954,772 | | | | 21,763,500 | | | | 674,414 | (6) | | | | | | | 45,843,912 | | President and Chief Executive Officer | | | 2018 | | | | 3,000,000 | | | | 14,839,655 | | | | 102,107,461 | | | | 9,000,000 | | | | 551,889 | | | | | | | | 129,499,005 | | | | | 2017 | | | | 3,000,000 | | | | 14,994,939 | | | | 15,606,127 | | | | 8,141,565 | | | | 505,353 | | | | | | | | 42,247,984 | | | | | | | | | | | Gunnar Wiedenfels | | | 2019 | | | | 1,160,453 | | | | 1,760,910 | | | | 1,787,026 | | | | 2,630,388 | | | | 46,928 | (7) | | | | | | | 7,385,705 | | Chief Financial Officer | | | 2018 | | | | 1,127,923 | | | | 1,483,973 | | | | 1,552,659 | | | | 2,422,507 | | | | 59,374 | | | | | | | | 6,646,436 | | | | | 2017 | * | | | 803,846 | | | | 1,266,441 | | | | 1,155,207 | | | | 1,570,378 | | | | 1,202,432 | | | | | | | | 5,998,304 | | | | | | | | | | | Bruce L. Campbell | | | 2019 | | | | 1,843,615 | | | | 1,609,985 | | | | 1,633,851 | | | | 4,061,765 | | | | 18,329 | | | | | | | | 9,167,546 | | Chief Development, Distribution and Legal Officer | | | 2018 | | | | 1,769,088 | | | | 5,193,904 | | | | 1,552,659 | | | | 3,811,762 | | | | 17,582 | | | | | | | | 12,344,995 | | | | | 2017 | | | | 1,591,910 | | | | 1,374,553 | | | | 1,432,360 | | | | 3,307,846 | | | | 49,953 | | | | | | | | 7,756,622 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jean-Briac Perrette | | | 2019 | | | | 1,948,645 | (8) | | | 5,723,123 | | | | 1,787,026 | | | | 4,732,222 | (9) | | | 275,622 | (10) | | | | | | | 14,467,453 | | President and Chief Executive Officer, Discovery International | | | 2018 | | | | 1,441,811 | | | | 1,607,641 | | | | 1,682,051 | | | | 3,667,739 | | | | 91,665 | | | | | | | | 8,490,907 | | | | | 2017 | | | | 1,549,356 | | | | 1,624,477 | | | | 1,692,783 | | | | 2,879,328 | | | | 486,127 | | | | | | | | 8,232,071 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Peter Faricy | | | 2019 | | | | 1,400,000 | | | | 1,609,985 | | | | 1,633,851 | | | | 2,279,712 | | | | 416,010 | (11) | | | | | | | 7,339,558 | | Chief Executive Officer, Global Direct to Consumer | | | 2018 | * | | | 376,923 | | | | 3,007,310 | | | | — | | | | 557,406 | | | | 686,324 | | | | 200,000 | | | | 4,827,963 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following Summary Compensation Table provides information concerning the 2022 compensation of our Chief Executive Officer, Chief Financial Officer, and the three other most highly compensated executive officers who were serving as executive officers at fiscal year end (December 31, 2022) (“named executive officers” or “NEOs”). Information is only included for Mr. Zeiler for those years within the last three fiscal years in which he was an NEO. For a complete understanding of the table, please read the footnotes and narrative disclosures that follow the table. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal
Position | Year | Salary
($)(1) | Bonus
($) | Stock
Awards
($)(2) | Option
Awards
($)(3) | Non-Equity
Incentive
Plan
Compensation
($)(4) | All Other
Compensation
($)(5) | Total
($) | David M. Zaslav
President and Chief
Executive Officer | 2022 | 3,057,692 | | | | 12,025,683 | | 1,448,138 | | 21,831,456 | | 925,489 | | (6) | 39,288,458 | | | 2021 | 3,000,000 | | 4,400,000 | | | 13,165,436 | | 202,889,764 | | 22,000,000 | | 1,118,281 | |
| 246,573,481 | | | 2020 | 3,000,000 | | | | 12,501,020 | | — | | 21,799,921 | | 409,521 | | | 37,710,462 | | Gunnar Wiedenfels
Chief Financial
Officer | 2022 | 1,952,996 | | | | 8,061,276 | | — | | 3,472,000 | | 18,342 | | | 13,504,614 | | | 2021 | 1,682,761 | | | | 2,194,259 | | 2,791,808 | | 4,632,970 | | 17,667 | | | 11,319,466 | | | 2020 | 1,195,267 | | | | 1,823,081 | | 1,518,050 | | 2,359,282 | | 17,442 | | | 6,913,122 | | Bruce L. Campbell Chief Revenue and Strategy Officer | 2022 | 2,386,815 | | | | 6,558,066 | | — | | 4,780,000 | | 19,164 | | | 13,744,045 | | | 2021 | 1,927,247 | | | | 2,194,259 | | 2,791,808 | | 5,690,558 | | 18,723 | | | 12,622,595 | | | 2020 | 1,898,924 | | | | 1,666,825 | | 1,387,929 | | 4,152,113 | | 18,640 | | | 9,124,431 | | Jean-Briac Perrette(7)
CEO and President,
Global Streaming and Games | 2022 | 2,337,916 | | | | 6,861,378 | | — | | 4,780,000 | | 95,904 | | (8) | 14,075,198 | | | 2021 | 2,184,711 | | | | 2,194,259 | | 2,791,808 | | 5,900,498 | | 3,580 | | | 13,429,240 | | | 2020 | 2,012,056 | | | | 1,823,081 | | 1,518,050 | | 4,695,645 | | 367,922 | | | 10,416,754 | | Gerhard Zeiler*(9)
President,
International | 2022 | 1,330,813 | | 2,946,504 | | (10) | 3,178,270 | | — | | 2,734,429 | | 77,573 | |
| 10,267,589 | |
* Partial year. Mr. Zeiler joined the Company on April 8, 2022 upon completion of the WarnerMedia Transaction. (1)The dollar amounts in this column represent the actual salary amount that each NEO received in 2022. Amounts may vary from salary amounts stated in their respective employment agreements due to increases from Annual Base Salary Review (as discussed in the CD&A) as well as timing of payments made under our normal payroll practices. (2)The amounts in this column represent the grant date fair value, computed in accordance with FASB ASC Topic 718, of PRSUs and RSUs for each of the applicable fiscal years. For each of the PRSU and RSU awards, the grant date fair value is calculated using the closing price of our common stock on the grant date as if these awards were fully vested and issued on the grant date. See Note 15 to our 2022 Form 10-K for information regarding the value determination of the PRSU awards. There can be no assurance that these grant date fair values will ever be realized by any NEO. See the 2022 Grants of Plan-Based Awards table for additional information on PRSU and RSU awards made in 2022. (3)The amounts in this column reflect the grant date fair value computed in accordance with FASB ASC Topic 718 with respect to option awards granted to our NEOs for each of the applicable fiscal years. We calculate the grant date fair value using the Black-Scholes model, using the assumptions described in Note 15 to our 2022 Form 10-K. These amounts do not reflect actual payments made to our NEOs. There can be no assurance that the full grant date fair value will ever be realized by any NEO. (4)These amounts reflect the cash performance awards earned by the applicable NEO for 2022. These amounts were calculated as described in the CD&A beginning on page 43. * | Partial year. Mr. Wiedenfels joined the Company on April 1, 2017 and Mr. Faricy joined the Company on September 17, 2018.
| | | | |
(1)2023 PROXY STATEMENT | The dollar amounts in this column represent the actual salary amount that each NEO received in 2019. Amounts may vary from salary amounts stated in their respective employment agreements due to timing of payments made under our normal payroll practices.
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(2) | The amounts in this column represent the grant date fair value, computed in accordance with FASB ASC Topic 718, of PRSUs and RSUs for each of the applicable fiscal years. For each of the PRSU and RSU awards, the grant date fair value is calculated using the closing price of our Series A or Series C common stock, as applicable, on the grant date as if these awards were fully vested and issued on the grant date. See Note 15 to our Annual Report on Form10-K for the year ended December 31, 2019 (the “Annual Report on Form10-K”) for information regarding the value determination of the PRSU awards. There can be no assurance that these grant date fair values will ever be realized by any NEO. See the 2019 Grants of Plan-Based Awards table on page 62 for additional information on PRSU and RSU awards made in 2019.
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(3) | The amounts in this column reflect the grant date fair value computed in accordance with FASB ASC Topic 718 with respect to the cash- and stock-settled stock appreciation rights and option awards granted to our NEOs for each of the applicable fiscal years. For stock options, we calculate the grant date fair value using the Black-Scholes model, using the assumptions described in Note 15 to our Annual Report on Form10-K. For the cash- and stock-settled stock appreciation rights, we calculate the grant date fair value using the Black-Scholes model, using the assumptions described in Note 15 to our Annual Report on Form10-K. These amounts do not reflect actual payments made to our NEOs. There can be no assurance that the full grant date fair value will ever be realized by any NEO.
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(4) | These amounts reflect the cash performance awards earned by the applicable NEO for 2019. These amounts were calculated as described in the CD&A beginning on page 27.
65 |
(5) | The table below outlines payments made on behalf of the NEOs under our U.S. benefit plans in 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
| | | | | | | | | | | | | | | | | | | | Basic Life ($) | | | Disability/Long
Term Care ($) | | | Matching Contributions | | | | | 401(k) ($) | | | SRP ($) | | Mr. Zaslav | | | 636 | | | | 6,474 | | | | 12,600 | | | | 0 | | Mr. Wiedenfels | | | 636 | | | | 3,981 | | | | 12,600 | | | | 0 | | Mr. Campbell | | | 636 | | | | 5,002 | | | | 12,691 | | | | 0 | | Mr. Perrette | | | 0 | | | | 321 | | | | 0 | | | | 0 | | Mr. Faricy | | | 636 | | | | 554 | | | | 17,269 | | | | 0 | |
(5)The table below outlines payments made on behalf of the NEOs under our U.S. benefit plans in 2022. For more information regarding these benefits, please see “NEO Compensation in 2022—Retirement Plans and Other Benefits” beginning on page 60 in the CD&A. | | | | | | | | | | | | | | | | | | | | Disability/Long
Term Care
($) | | Matching Contributions | | Basic Life
($) | | 401(k)
($) | SRP
($) | | Mr. Zaslav | 636 | | 6,474 | | | 13,725 | | 0 | | | Mr. Wiedenfels | 636 | | 3,981 | | | 13,725 | | 0 | | | Mr. Campbell | 636 | | 5,043 | | | 13,485 | | 0 | | | Mr. Perrette | 220 | | 519 | | | 0 | | 0 | | | Mr. Zeiler | 2,457 | | 1,309 | | | 0 | | 0 | |
In addition to the U.S. benefits described above, we made payments (i) on behalf of Mr. Perrette as follows: £2,838$2,148 for U.K. life assurance, £2,156$1,973 for disability insurance and £6,345$2,049 for thea U.K. pension plan and (ii) on behalf of Mr. Zeiler as follows: $65,670 for an Austrian pension plan. For more information regarding these benefits, please see
(6)The amount reported includes $16,800 for a car allowance and $50,462 for personal security services. This amount also includes $825,675 for personal use of WBD Aircraft (including family travel for which Mr. Zaslav is not provided a tax gross-up) and $11,718 for tax gross-ups associated with business associate and spousal travel at the request of the Company that is considered business use. See “NEO Compensation in 2019—2022—Retirement Plans and Other Benefits” beginningBenefits—Aircraft Usage” on page 5561 in the CD&A.(6) | The amount reported includes $16,800 for a car allowance, $599 for home office expenses and $15,283 for personal security services. This amount also includes $567,601 for personal use of aircraft (including family travel for which Mr. Zaslav is not provided a taxgross-up) and $54,421 for taxgross-ups for business associate and spouse travel at the request of the Company that is considered business use. See “NEO Compensation in 2019 – Retirement Plans and Other Benefits - Aircraft Usage; RelatedGross-Up” on page 56 in the CD&A for more information regarding our policies for Mr. Zaslav’s use of our corporate aircraft.
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(7) | This amount includes $27,532 for tax services and $452 for immigration services. Additionally, this amount includes $1,727 in associated taxgross-ups, pursuant to the Company’s relocation policy.
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(8) | Under the terms of Mr. Perrette’s employment agreement, he is to be paid in British pounds. For 2019, Mr. Perrette’s salary was £1,525,000. This amount was converted to United States dollars using a conversion rate of 1.2778 United States dollars per British pound, which is the average of the monthly Bloomberg spot rate as of the second business day prior to each month end during 2019.
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(9) | This amount was calculated using Mr. Perrette’s salary, which is denominated in British pounds. After Mr. Perrette’s ICP and performance pool amounts were determined as further described on page 39 in the CD&A, those amounts were then converted into United States dollars using the same conversion rate described in Note (8) above.
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(10) | This amount includes $53,770 for tax services, pursuant to the Company’s relocation policy. Discovery also provided tax equalization payments for Mr. Perrette, which resulted in Company expenses of $207,042 for 2019. In converting the amounts from British pounds to United States dollars, we used the same conversion rate described in Note (8) above. This may not have been the exchange rate in effect at the time the payments in respect of the amounts described in this paragraph were made.
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(11) | This amount includes $218,178 in temporary lodging expenses incurred in connection with Mr. Faricy’s relocation as well as a short-term assignment to our London office, $11,377 in immigration services and $167,996 in associated taxgross-ups.
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Pay Ratio Disclosure
Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u)WBD Aircraft.
(7)Mr. Perrette was based in the U.K. for a portion of RegulationS-K,2022. To the extent Mr. Perrette was paid in British pounds, we are requiredconverted such amounts to provideUnited States dollars using a conversion rate of 1.23, which is the ratioaverage of the annual total compensation of our CEO to the annual total compensation of the median-paid employee of the Company (“Median Employee”). Our 2019 CEO to Median Employee pay ratio was calculated in accordance with Item 402(u) of RegulationS-K, and represents a reasonable estimate.For 2019, were-identified our Median Employee due to the impact of the integration of Scripps Networks, which we acquired in March 2018. To identify our median employee, we defined “employee” as any full-time, part-time or temporary individual employed and paid by the Company or any of our consolidated subsidiaries as of November 30, 2019. We did not include freelance workers, temporary employees employed and paid by a third party or independent contractors (other than certain employees outside the United States who also work in part as independent contractors in accordance with local compensation practices). We then calculated each employee’s annual cash compensation, our consistently applied compensation measure, using actual base salary, target bonus and target sales commission (if applicable) for the 2019 calendar year. For employees paid in local currencies, we converted their base salary into U.S. dollar amounts using an average exchange ratemonthly Bloomberg spot rates as of the second business day prior to each month end during 2019. We then sorted2022. This may not have been the employees (excludingconversion rate in effect at the time the payments were made to Mr. Perrette.
(8)During 2022, Mr. Perrette was relocated back to the U.S. and received relocation benefits under our CEO)standard relocation policies. This amount includes $37,485 for tax services, $110,715 for relocation services and $89,209 for associated tax gross-ups. The Company also provided tax equalization payments for Mr. Perrette, which resulted in a refund to the Company of $148,414. (9)Mr. Zeiler is based in Austria and his salary is denominated in Euros. To the extent Mr. Zeiler is paid in Euros, we converted such amounts to United States dollars using a conversion rate of 1.05, which is the average of the monthly Bloomberg spot rates as of the second business day prior to each month end during 2022. This may not have been the conversion rate in effect at the time the payments were made to Mr. Zeiler. (10)The amount reported in this column for Mr. Zeiler represents a retention bonus awarded to Mr. Zeiler by their annual cash compensationWarnerMedia prior to determine the medianclosing of the WarnerMedia Transaction that became payable to him by WBD 90 days after the closing of the WarnerMedia Transaction.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
2022 Grants of Plan-Based Awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | | All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) | All
Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | Exercise
or Base
Price of
Option
Awards
($/Sh) | Grant Date
Fair Value
of Stock
and Option
Awards
($) | | Name | Grant Date | Approval
Date | | Threshold
($) | Target(1)
($) | Maximum(2)
(#) | | Threshold
(#) | Target
(#) | Maximum
(#) | | D. Zaslav
WBD
Common
Stock | | | | 0 | | 22,000,000 | | | 27,500,000 | | | | | | | | | | | | | | | | | 1/3/2022 | 5/16/2021 | | | | | | | | | | | | | | | | 198,132 | | (3) | 37.43 | | 1,448,138 | | | 3/1/2022 | 2/28/2022 | | | | | | | | 256,685 | | (4) | 320,856 | | (4) | | | | | | | | 9,019,262 | | | 3/1/2022 | 2/28/2022 | | | | | | | | 53,476 | | (5) | 106,952 | | (5) | | | | | | | | 3,006,421 | | | G. Wiedenfels | | 0 | | 3,500,000 | | | 8,750,000 | | | | | | | | | | | | | | | | WBD
Common
Stock | 3/1/2022 | 2/28/2022 | | | | | | | | | | | | | | 213,904 | | (6) | | | | 6,012,841 | | | 7/15/2022 | 5/3/2022 | | | | | | | | | | | | | | 146,736 | | (7) | | | | 2,048,435 | | B. Campbell
WBD
Common
Stock | | | | 0 | | 5,000,000 | | | 12,500,000 | | | | | | | | | | | | | | | | | 3/1/2022 | 2/28/2022 | | | | | | | | | | | | | | 160,428 | | (6) | | | | 4,509,631 | | | 7/15/2022 | 5/3/2022 | | | | | | | | | | | | | | 146,736 | | (7) | | | | 2,048,435 | | J. Perrette
WBD
Common
Stock | | | | 0 | | 5,000,000 | | | 12,500,000 | | | | | | | | | | | | | | | | | 3/1/2022 | 2/28/2022 | | | | | | | | | | | | | | 156,863 | | (6) | | | | 4,409,419 | | | 8/3/2022 | 5/3/2022 | | | | | | | | | | | | | | 146,736 | | (7) | | | | 2,451,959 | | Gehard Zeiler
WBD Common Stock | | | | 0 | | 3,031,518 | | (8) | 7,578,795 | | (8) | | | | | | | | | | | | | | | 4/8/2022 | 4/8/2022 | | | | | | | | | | | | | | 130,097 | | (9) | | | | 3,178,270 | |
(1)These amounts reflect the possible payouts with respect to awards of annual cash compensationbonus for performance in 2022. Each of the foregoing bonuses are subject to all employees and, thereby, identified our Median Employee. We then calculated our Median Employee’sthe Compensation Committee’s authority to exercise “downward discretion.” The amounts of annual total compensation using the same methodology we usedcash bonus awards actually paid for our NEOs (including our CEO) as set forthperformance in the 2019 Summary Compensation Table, which resulted in our Median Employee having annual total compensation of $79,343. The 2019 annual total compensation for our CEO as2022 are disclosed in the 2019Non-Equity Incentive Plan Compensation column of the 2022 Summary Compensation TableTable. For more information regarding the terms of these annual cash bonus awards, please see “Compensation Discussion and Analysis—NEO Compensation in 2022—Annual Cash Bonus Awards,” beginning on page 52. (2)Amounts in excess of this maximum may be paid by the Committee on a discretionary basis. (3)These amounts represent stock options that will vest 25% per year for four years beginning on May 16, 2023, and which will expire on January 3, 2029. (4)These amounts represent PRSU awards. The PRSUs vest if Mr. Zaslav achieves certain one-year strategic performance goals, which the Compensation Committee certified were achieved at 100% in February 2023. Of the grant, 70% was $45,843,912.distributed on February 27, 2023 and 30% will be distributed on January 6, 2024, assuming Mr. Zaslav continues to be employed by us. For more information regarding these awards, please see “Compensation Discussion and Analysis— NEO Compensation in 2022—Long-Term Incentive Compensation.” (5)These amounts represent PRSU awards. The PRSUs vest if WBD achieves certain one-year financial performance targets. In February 2023, the Compensation Committee certified that, based on WBD’s performance, these PRSUs would vest at 93.7%. Of the amount that vested, 70% was distributed on February 27, 2023 and 30% will be distributed on January 6, 2024, assuming Mr. Zaslav continues to be employed by us. For more information regarding these awards, please see “Compensation Discussion and Analysis—NEO Compensation in 2022—Long-Term Incentive Compensation.” (6)These amounts represent RSUs that will vest in four equal installments on the first, second, third, and fourth anniversaries of the grant date. (7)These amounts represent RSUs that will vest in three substantially equal installments on the first, second, and third anniversaries of the grant date. (8)Mr. Zeiler's compensation is paid in Euros. Therefore, financial performance of Mr. Zeiler’s bonus payout was determined in Euros. Those amounts were then converted into United States dollars at the ratiorate of our CEO’s annual total compensation1.05 United States dollars per Euro, which is the average of the monthly Bloomberg spot rates as of the second business day prior to each month end during 2022. See “Compensation Discussion and Analysis—NEO Compensation in 2022—Annual Cash Bonus Awards” on page 52 for more information on the determination of Mr. Zeiler’s bonus payout. (9)These amounts represent RSUs that were converted as of the closing of the WarnerMedia Transaction, pursuant to the Median Employee’s annual total compensation was 578 to 1. 2019 Grantsterms of Plan-Based Awards
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Estimated Future Payouts
UnderNon-Equity Incentive
Plan Awards | | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | | | All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#) | | | All Other
Option
Awards:
Number
of Securi
ties
Underlying
Options
(#) | | | Exercise
or Base
Price of
Option
Awards
($/Sh) | | | Grant Date
Fair Value
of Stock
and Option
Awards ($) | | Name | | Grant
Date | | | Approval
Date | | | Threshold
($) | | | Target1
($) | | | Maximum
(#) | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | D. Zaslav | | | | | | | | | | | 0 | | | | 22,000,000 | | | | 22,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 01/02/2019 | | | | 07/16/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 989,299 | 2 | | | 33.24 | | | | 6,954,772 | | | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | 282,021 | 3 | | | 352,526 | 3 | | | | | | | | | | | | | | | | | | | 10,251,456 | | | | | 03/18/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | 58,755 | 4 | | | 117,509 | 4 | | | | | | | | | | | | | | | | | | | 3,199,770 | | G. Wiedenfels | | | | | | | | | | | 0 | | | | 1,400,388 | | | | 2,917,475 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 185,184 | 5 | | | 29.08 | | | | 1,787,026 | | | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 60,554 | 6 | | | | | | | | | | | 1,760,910 | | B. Campbell | | | | | | | | | | | 0 | | | | 2,781,000 | | | | 4,635,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 169,311 | 5 | | | 29.08 | | | | 1,633,851 | | | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 55,364 | 6 | | | | | | | | | | | 1,609,985 | | J. Perrette | | | | | | | | | | | 0 | | | | 3,410,129 | 7 | | | 4,871,613 | 7 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 02/04/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 140,057 | 8 | | | | | | | | | | | 3,962,213 | | | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 185,184 | 5 | | | 29.08 | | | | 1,787,026 | | | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 60,554 | 6 | | | | | | | | | | | 1,760,910 | | P. Faricy | | | | | | | | | | | 0 | | | | 1,680,000 | | | | 3,500,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 169,311 | 5 | | | 29.08 | | | | 1,633,851 | | | | | 03/01/2019 | | | | 02/27/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 55,364 | 6 | | | | | | | | | | | 1,609,985 | |
1 | These amounts reflect the possible payouts with respect to awards of annual cash bonus for performance in 2019. Each of the foregoing bonuses are subject to the Compensation Committee’s authority to exercise “downward discretion.” The amounts of annual cash bonus awards actually paid for performance in 2019 are disclosed in theNon-Equity Incentive Plan Compensation column of the 2019 Summary Compensation Table on page 59. For more information regarding the terms of these annual cash bonus awards and the factors used by the Committee in exercising its downward discretion, please see “Compensation Discussion and Analysis—NEO Compensation in 2019—Annual Cash Bonus Awards,” beginning on page 43.
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22023 PROXY STATEMENT | This award vests 100% in 2023.
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3 | These amounts represent PRSU awards. The PRSUs vest if we achieve certainone-year performance targets. Of the grant, 50% was distributed on March 1, 2020 and 25% will be distributed on each of January 6, 2021 and January 6, 2022, assuming achievement of theone-year performance targets. For more information regarding these awards, please see “Compensation Discussion and Analysis—NEO Compensation in 2019—Long-Term Incentive Compensation.”
|
4 | These amounts represent PRSU awards. The PRSUs vest if Mr. Zaslav achieves certainone-year performance goals. Of the grant, 50% was distributed on March 1, 2020 and 25% will be distributed on each of January 6, 2021 and January 6, 2022, assuming achievement of theone-year performance targets. For more information regarding these awards, please see “Compensation Discussion and Analysis— NEO Compensation in 2019—Long-Term Incentive Compensation.”
|
5 | These amounts represent stock options that will vest 25% per year for four years beginning on the first anniversary of the grant date and will expire on March 1, 2026.
|
6 | These amounts represent RSUs that will vest in four substantially equal installments on the first, second, third, and fourth anniversaries of the grant date.
|
7 | Mr. Perrette’s compensation is paid in British pounds. Therefore, financial performance of Mr. Perrette’s lines of business were established and Mr. Perrette’s bonus payout and performance pool amounts were determined in British pounds. Those amounts were then converted into United States dollars at the rate of 1.2778 United States dollars per British pound. See “Compensation Discussion and Analysis— NEO Compensation in 2019” on page 41 for more information on the determination of Mr. Perrette’s bonus payout.
|
8 | These amounts represent RSUs that will vest in three substantially equal installments on July 1, 2021, July 1, 2022 and July 1, 2023.
67 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Outstanding Equity Awards at 20192022 Fiscal Year-End | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Number of
securities
underlying
unexercised
options (#)
exercisable | | | Number of
securities
underlying
unexercised
options (#)
unexercisable | | | Option
exercise
price
($) | | | Option expiration
date | | Number of shares or
units of stock that have
not vested
(#)1 | | | Market value of
shares or units of
stock that have not
vested
($) | | D. Zaslav | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 0 | | | | 289,271 | 2 | | | 26.38 | | | 01/31/2020 | | | 301,448 | 10,11 | | | 9,869,408 | | | | | 0 | | | | 723,176 | 3 | | | 27.69 | | | 01/31/2021 | | | 508,303 | 10,12 | | | 16,641,840 | | | | | 0 | | | | 1,355,954 | 4 | | | 22.95 | | | 01/31/2022 | | | 616,777 | 10,13 | | | 20,193,279 | | | | | 0 | | | | 2,435,655 | 5 | | | 27.35 | | | 07/16/2025 | | | 352,526 | 10,14 | | | 11,541,701 | | | | | 0 | | | | 2,211,344 | 6 | | | 28.72 | | | 07/16/2025 | | | 117,509 | 10,15 | | | 3,847,245 | | | | | 0 | | | | 2,155,404 | 7 | | | 30.15 | | | 07/16/2025 | | | | | | | | | | | | 0 | | | | 2,393,454 | 8 | | | 31.66 | | | 07/16/2025 | | | | | | | | | | | | 0 | | | | 1,571,489 | 9 | | | 33.24 | | | 07/16/2025 | | | | | | | | | | | | 0 | | | | 989,299 | 9 | | | 33.24 | | | 07/16/2025 | | | | | | | | | | | | | | | | Series C Common Stock | | | 0 | | | | 289,271 | 2 | | | 25.17 | | | 01/31/2020 | | | | | | | | | | | | 0 | | | | 723,176 | 3 | | | 27.03 | | | 01/31/2021 | | | | | | | | | | | | 0 | | | | 1,355,954 | 4 | | | 21.71 | | | 01/31/2022 | | | | | | | | | G. Wiedenfels | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 80,000 | | | | 80,001 | 16 | | | 26.21 | | | 05/22/2024 | | | 32,374 | 19 | | | 1,059,925 | | | | | 50,740 | | | | 152,222 | 17 | | | 24.06 | | | 03/01/2025 | | | 61,678 | 20 | | | 2,019,338 | | | | | 0 | | | | 185,184 | 18 | | | 29.08 | | | 03/01/2026 | | | 60,554 | 21 | | | 1,982,538 | | B. Campbell | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 49,605 | | | | 0 | | | | 38.01 | | | 03/01/2020 | | | 24,116 | 24 | | | 789,558 | | | | | 52,858 | | | | 0 | | | | 42.29 | | | 02/28/2021 | | | 46,595 | 25 | | | 1,525,520 | | | | | 148,280 | | | | 0 | | | | 32.33 | | | 02/23/2022 | | | 61,678 | 20 | | | 2,019,338 | | | | | 120,320 | | | | 40,107 | 22 | | | 25.08 | | | 02/26/2023 | | | 154,195 | 20 | | | 5,048,344 | | | | | 87,339 | | | | 87,339 | 23 | | | 29.50 | | | 02/23/2024 | | | 55,364 | 21 | | | 1,812,617 | | | | | 50,740 | | | | 152,222 | 17 | | | 24.06 | | | 03/01/2025 | | | | | | | | | | | | 0 | | | | 169,311 | 18 | | | 29.08 | | | 03/01/2026 | | | | | | | | | | | | | | | | Series C Common Stock | | | 49,605 | | | | 0 | | | | 36.86 | | | 03/01/2020 | | | | | | | | | | | | 52,858 | | | | 0 | | | | 41.02 | | | 02/28/2021 | | | | | | | | | J. Perrette | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 9,706 | | | | 0 | | | | 38.01 | | | 03/01/2020 | | | 30,145 | 24 | | | 986,947 | | | | | 11,491 | | | | 0 | | | | 42.29 | | | 02/28/2021 | | | 25,000 | 26 | | | 818,500 | | | | | 174,068 | | | | 0 | | | | 32.33 | | | 02/23/2022 | | | 29,366 | 26 | | | 961,443 | | | | | 150,399 | | | | 50,134 | 22 | | | 25.08 | | | 02/26/2023 | | | 55,067 | 25 | | | 1,802,894 | | | | | 103,218 | | | | 103,219 | 23 | | | 29.50 | | | 02/23/2024 | | | 66,818 | 20 | | | 2,187,621 | | | | | 54,969 | | | | 164,907 | 17 | | | 24.06 | | | 03/01/2025 | | | 140,057 | 27 | | | 4,585,466 | | | | | 0 | | | | 185,184 | 18 | | | 29.08 | | | 03/01/2026 | | | 60,554 | 21 | | | 1,982,538 | | | | | | | | | Series C Common Stock | | | 9,706 | | | | 0 | | | | 36.86 | | | 03/01/2020 | | | | | | | | | | | | 11,491 | | | | 0 | | | | 41.02 | | | 02/28/2021 | | | | | | | | | P. Faricy | | | | | | | | | | | | | | | | | | | | | | | Series A Common Stock | | | 0 | | | | 169,311 | 18 | | | 29.08 | | | 03/01/2026 | | | 91,103 | 28 | | | 2,982,712 | | | | | | | | | | | | | | | | | | | 55,364 | 21 | | | 1,812,617 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | Number of
securities
underlying
unexercised
options (#)
exercisable | Number of
securities
underlying
unexercised
options (#)
unexercisable | Option
exercise
price
($) | Option
expiration
date | | Number of shares or units of stock
that have not
vested (#)(1) | Market value of shares or units of stock that have not vested ($)(1) | D. Zaslav
WBD Common Stock | | | | | | | | | | | 2,252,981 | 182,674 | (2) | $27.35 | 7/16/2025 | | 30,291 | (17)(18) | 287,159 | | 1,879,643 | 331,701 | (3) | $28.72 | 7/16/2025 | | 91,204 | (17)(19) | 864,614 | | 1,724,324 | 431,080 | (4) | $30.15 | 7/16/2025 | | 84,858 | (17)(20) | 804,454 | | 1,675,418 | 718,036 | (5) | $31.66 | 7/16/2025 | | 28,286 | (17)(21) | 268,151 | | 1,100,043 | 471,446 | (6) | $33.24 | 7/16/2025 | | 320,856 | (17)(22) | 3,041,715 | | 692,510 | 296,789 | (6) | $33.24 | 7/16/2025 | | 106,952 | (17)(23) | 1,013,905 | | 408,821 | 1,226,463 | (7) | $35.65 | 5/16/2028 | | | | | | 0 | 1,519,414 | (8) | $37.43 | 5/16/2028 | | | | | | 0 | 1,557,685 | (9) | $39.30 | 5/16/2028 | | | | | | 0 | 1,603,292 | (10) | $41.27 | 5/16/2028 | | | | | | 0 | 1,682,083 | (11) | $43.33 | 5/16/2028 | | | | | | 0 | 1,360,127 | (12) | $35.65 | 5/16/2028 | | | | | | 0 | 1,421,234 | (13) | $37.43 | 5/16/2028 | | | | | | 0 | 1,401,917 | (14) | $39.30 | 5/16/2028 | | | | | | 0 | 1,270,188 | (15) | $41.27 | 5/16/2028 | | | | | | 0 | 1,322,488 | (16) | $43.33 | 5/16/2028 | | | | | | 0 | 198,132 | (8) | $37.43 | 1/3/2029 | | | | | G. Wiedenfels
WBD Common Stock | 40,001 | 0 | | $26.21 | 5/22/2024 | | 20,589 | (27) | 195,184 | | 50,741 | 0 | | $24.06 | 3/1/2025 | | 47,528 | (28)) | 450,565 | | 46,296 | 46,296 | (24) | $29.08 | 3/1/2026 | | 28,287 | (29) | 268,161 | | 50,134 | 100,268 | (25) | $25.70 | 2/28/2027 | | 213,904 | (30) | 2,027,810 | | 32,636 | 97,910 | (26) | $58.18 | 3/1/2028 | | 146,736 | (31) | 1,391,057 | B. Campbell
WBD Common Stock | 202,962 | 0 | | $24.06 | 3/1/2025 | | 18,824 | (27) | 178,452 | | 84,656 | 42,328 | (24) | $29.08 | 3/1/2026 | | 43,455 | (28) | 411,953 | | 91,673 | 91,673 | (25) | $25.70 | 2/28/2027 | | 28,287 | (29) | 268,161 | | 32,636 | 97,910 | (26) | $58.18 | 3/1/2028 | | 153,078 | (36) | 1,451,179 | | | | | | | 140,014 | (32) | 1,327,333 | J. Perrette
WBD Common Stock | 54,969 | 0 | | $24.06 | 3/1/2025 | | 46,687 | (33) | 442,593 | | 46,296 | 46,296 | (24) | $29.08 | 3/1/2026 | | 20,589 | (27) | 195,184 | | 50,134 | 100,268 | (25) | $25.70 | 2/28/2027 | | 47,528 | (28) | 450,565 | | 32,636 | 97,910 | (26) | $58.18 | 3/1/2028 | | 28,287 | (29) | 268,161 | | | | | | | 156,863 | (30) | 1,487,061 | | | | | | | 146,736 | (34) | 1,391,057 |
1 | For RSUs and PRSUs, the value is calculated based on the grant amount, assuming target performance for PRSUs.
| | | | |
268 | These awards represent SARs granted in January 2016 pursuant to the terms of the then-current employment agreement with Mr. Zaslav. The SARs vested 25% on each anniversary of the grant date and were automatically payable in 75% cash and 25% stock in connection with the vesting. These SARs were fully vested and paid out as of January 2020.
|
3 | These awards represent SARs granted in January 2017 pursuant to the terms of the then-current employment agreement with Mr. Zaslav. The SARs vest 25% on each anniversary of the grant date and are automatically payable in 75% cash and 25% stock in connection with the vesting. Three-fourths of these SARs had vested and paid out as of January 2020, and the remainingone-fourth will vest and pay out in January 2021.
|
4 | These awards represent SARs granted in January 2018 pursuant to the terms of the then-current employment agreement with Mr. Zaslav. The SARs vest 25% on each anniversary of the grant date and are automatically payable in 75% cash and 25% stock in connection with the vesting.One-half of these SARs had vested and paid out as of January 2020, and the remainingone-half will vest and pay out in January 2021 and January 2022.
|
5 | This award vested 25% on January 2, 2020, and will vest 25% each year on January 2, 2021, 2022 and 2023.
|
6 | This award vests 25% each year on January 2, 2021, 2022, 2023 and 2024.
|
7 | This award vests 33% each year on January 2, 2022 and 2023 and 34% on January 2, 2024.
|
8 | This award vests 50% each year on January 2, 2023 and 2024.
|
9 | This award vests 100% on December 31, 2023.
|
10 | These amounts represent PRSUs granted pursuant to the terms of Mr. Zaslav’s employment agreement. The vesting of the PRSUs is subject to the achievement of certain performance metrics. For details regarding vesting and performance criteria for these PRSUs, please see “Compensation Discussion and Analysis—NEO Compensation in 2019—Long-Term Incentive Compensation.”
|
11 | These PRSU amounts relate to the undistributed portion of the February 26, 2016 PRSU grant, with a performance period that expired December 31, 2018. In February 2019, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 50% of the units distributed in February 2019, 25% distributed in February 2020 and the remaining 25% to be distributed in February 2021.
|
12 | These PRSU amounts relate to the undistributed portion of the February 23, 2017 PRSU grant, with a performance period that expired December 31, 2019. In February 2020, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 50% of the units distributed in February 2020, 25% to be distributed in February 2021 and the remaining 25% to be distributed in February 2022.
|
13 | These PRSU amounts relate to the undistributed portion of the March 1, 2018 PRSU grant, with a performance period that expired December 31, 2019. In February 2020, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 50% of the units distributed in February 2020, 25% to be distributed in February 2021 and the remaining 25% to be distributed in February 2022.
|
14 | These PRSU amounts relate to the undistributed portion of the March 1, 2019 PRSU grant, with a performance period that expired December 31, 2019. In February 2020, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 97.4%, with 50% of the units distributed in February 2020, 25% to be distributed in February 2021 and the remaining 25% to be distributed in February 2022.
|
15 | These PRSU amounts relate to the undistributed portion of the March 18, 2019 PRSU grant, with a performance period that expired December 31, 2019. In February 2020, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 50% of the units distributed in February 2020, 25% to be distributed in February 2021 and the remaining 25% to be distributed in February 2022.
|
16 | These stock options vest in four equal annual installments beginning May 22, 2018, the first anniversary of the grant date.
|
17 | These stock options vest in four equal annual installments beginning March 1, 2019, the first anniversary of the grant date.
|
18 | These stock options vest in four equal annual installments beginning March 1, 2020, the first anniversary of the grant date.
|
19 | These RSU amounts vested 33% on May 22, 2019 and will vest 33% on May 22, 2020 and 34% on May 22, 2021.
|
20 | These RSU amounts vested 33% on March 1, 2020 and will vest 33% on March 1, 2021 and 34% on March 1, 2022.
|
21 | These RSU amounts vest in four equal installments beginning March 1, 2020.
|
22 | These stock options vest in four equal annual installments beginning February 26, 2017.
|
23 | These stock options vest in four equal annual installments beginning February 23, 2018.
|
24 | These PRSU amounts relate to the unvested portion of the February 26, 2016 PRSU grant, with a performance period that expired December 31, 2018. In February 2019, the Compensation Committee certified that the performance metrics had been met. 50% of the units vested in February 2019 and the remaining 50% vested in February 2020.
|
25 | These PRSU amounts relate to the unvested portion of the February 23, 2017 PRSU grant, with a performance period that expired December 31, 2019. In February 2020, the Compensation Committee certified that the performance metrics had been met. 50% of the units vested in February 2020 and the remaining 50% will vest in February 2021.
|
26 | These PRSU amounts relate to the unvested portion of the June 16, 2016 PRSU grant, with a performance period that expired December 31, 2018. In February 2019, the Compensation Committee certified that the performance metrics had been met. 50% of the units vested in June 2019 and the remaining 50% will vest in June 2020.
|
27 | This RSU award vests in three substantially equal installments on July 1, 2021, July 1, 2022 and July 1, 2023.
|
28 | This RSU award vests 33% on the second and third anniversaries and 34% on the fourth anniversary of the October 8, 2018 grant date.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | Number of
securities
underlying
unexercised
options (#)
exercisable | Number of
securities
underlying
unexercised
options (#)
unexercisable | Option
exercise
price
($) | Option
expiration
date | | Number of
shares
or units of
stock
that have not
vested (#)(1) | Market value
of shares
or units of
stock that
have not
vested ($)(1) | G. Zeiler
WBD Common Stock | | | | | | | | | | | | | | | | 130,097 | | (35) | 1,233,320 | |
(1)For RSUs and PRSUs, the value is calculated based on the grant amount and assumes target performance for PRSUs. (2)This award vested 25% on January 2, 2020, 25% on January 2, 2021 and 25% on January 2, 2022. On April 8, 2022, upon the closing of the WarnerMedia Transaction, 70% of the then-remaining unvested portion of this award vested. The award became fully vested on January 2, 2023. (3)This award vested 25% on January 2, 2021 and 25% on January 2, 2022. On April 8, 2022, upon the closing of the WarnerMedia Transaction, 70% of the then-remaining unvested portion of this award vested, leaving 30% still unvested. Of that unvested 30% portion, 50% vested on January 2, 2023 and 50% will vest on December 31, 2023. (4)33% of this award vested on January 2, 2022. On April 8, 2022, upon the closing of the WarnerMedia Transaction, 70% of the then-remaining unvested portion of this award vested, leaving 30% still unvested. Of that unvested 30% portion, 50% vested on January 2, 2023 and 50% will vest on December 31, 2023. (5)On April 8, 2022, upon the closing of the WarnerMedia Transaction, 70% of this award vested, leaving 30% still unvested. Of that unvested 30% portion, 50% vested on January 2, 2023 and 50% will vest on December 31, 2023. (6)On April 8, 2022, upon the closing of the WarnerMedia Transaction, 70% of this award vested, leaving 30% still unvested. The remaining unvested 30% of this award will vest on December 31, 2023. (7)This award vested 25% on May 16, 2022 and will vest 25% on each of May 16, 2023, May 16, 2024 and May 16, 2025. (8)This award vests 25% annually over four years beginning on May 16, 2023. (9)This award vests 33% on May 16, 2024 and May 16, 2025 and 34% on May 16, 2026. (10)This award vests 50% on May 16, 2025 and May 16, 2026. (11)This award vests 100% on May 16, 2026. (12)This award vests 25% annually over four years beginning on January 1, 2024. (13)This award vests 25% on January 1, 2025, January 1, 2026, January 1, 2027, and December 31, 2027. (14)This award vests 33% on January 1, 2026 and January 1, 2027 and 34% on December 31, 2027. (15)This award vests 50% on January 1, 2027 and 50% on December 31, 2027. (16)This award vests 100% on December 31, 2027. (17)These amounts represent PRSUs granted pursuant to the terms of Mr. Zaslav’s employment agreement. The vesting of the PRSUs is subject to the achievement of certain performance metrics. For details regarding vesting and performance criteria for these PRSUs, please see “Compensation Discussion and Analysis—NEO Compensation in 2022—Long-Term Incentive Compensation.” (18)These amounts represent PRSUs granted to Mr. Zaslav on February 28, 2020, with a performance period that expired December 31, 2020. In February 2021, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 99.64%, with 50% of the units distributed in February 2021, 25% distributed in January 2022 and the remaining 25% distributed in January 2023. (19)These amounts represent PRSUs granted to Mr. Zaslav on February 28, 2020, with a performance period that expired December 31, 2020. In February 2021, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 50% of the units distributed in February 2021, 25% distributed in January 2022 and the remaining 25% distributed in January 2023. (20)These amounts represent PRSUs granted to Mr. Zaslav on March 1, 2021 with a performance period that expired December 31, 2021. In February 2022, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 50% of the units distributed in February 2022, 25% distributed in January 2023 and the remaining 25% to be distributed in January 2024. (21)These amounts represent PRSUs granted to Mr. Zaslav on March 1, 2021, with a performance period that expired December 31, 2021. In February 2022, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 50% of the units distributed in February 2022, 25% distributed in January 2023 and the remaining 25% to be distributed in January 2024. (22)These amounts represent PRSUs granted to Mr. Zaslav on March 1, 2022 with a performance period that expired December 31, 2022. In February 2023, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 100%, with 70% of the units distributed in February 2023, and the remaining 30% to be distributed in January 2024. (23)These amounts represent PRSUs granted to Mr. Zaslav on March 1, 2022, with a performance period that expired December 31, 2022. In February 2022, the Compensation Committee certified that the performance metrics had been met and the PRSUs vested at 93.67%, with 70% of the units distributed in February 2023, and the remaining 30% to be distributed in January 2024. (24)These stock options vest in four equal annual installments beginning March 1, 2020, the first anniversary of the grant date. (25)These stock options vest in four equal annual installments beginning February 28, 2021, the first anniversary of the grant date. (26)These stock options vest in four equal annual installments beginning March 1, 2022, the first anniversary of the grant date. (27)These RSU awards vested 33% on March 1, 2021, 33% on March 1, 2022 and 34% on March 1, 2023. (28)These RSU awards vested 33% on February 28, 2022, 33% on February 28, 2023 and will vest 34% on February 28, 2024. (29)These RSU awards vested 25% on March 1, 2022, 25% on March 1, 2023, and will vest 25% on each of March 1, 2024 and March 1, 2025. (30)These RSU awards vested 25% on March 1, 2023, and will vest 25% on each of March 1, 2024, March 1, 2025 and March 1, 2026. (31)This RSU award will vest in three substantially equal installments on July 11, 2023, July 11, 2024 and July 11, 2025. (32)On December 28, 2022, 6,722 RSUs from the overall award of 146,736 RSUs were withheld to pay for FICA taxes. The remaining 140,014 RSUs will vest in three substantially equal installments on July 9, 2023, July 9, 2024 and July 9, 2025. (33)This RSU award vested 33% on July 1, 2021, 33% on July 1, 2022 and will vest 34% on July 1, 2023. (34)This RSU award will vest in three substantially equal installments on August 2, 2023, August 2, 2024 and August 2, 2025. (35)This RSU award vested approximately 50% on February 15, 2023 and will vest 32% on February 15, 2024 and 18% on February 15, 2025. (36)On December 28, 2022, 7,350 RSUs from the overall award of 160,428 RSUs were withheld to pay for FICA taxes. Of the remaining 153,078 RSUs, 25% vested on March 1, 2023, and 25% will vest on each of March 1, 2024, March 1, 2025 and March 1, 2026.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Option Exercises and Stock Vested in 2022 | | | | | | | | | | | | | | | | | | | | | | | | | Option awards | | Stock awards | | Name | Number of shares
acquired on exercise
(#) | Value realized
on exercise
($)(1) | | Number of shares
acquired on vesting
(#) | Value realized
on vesting
($)(2) | | D. Zaslav | | | | | | | | | Discovery, Inc. Series A Common Stock | 451,985 | | (3) | 1,505,110 | | | | | | | Discovery, Inc. Series C Common Stock | 451,985 | | (3) | 1,708,503 | | | | | | WBD Common Stock(4) | | | | | 631,126 | | (5) | 16,496,186 | | | G. Wiedenfels | | | | | | | | WBD Common Stock(4) | | | | | 73,791 | | (6) | 2,072,860 | | | B. Campbell | | | | | | | | WBD Common Stock(4) | | | | | 136,570 | | (7) | 3,582,855 | | | J. Perrette | | | | | | | | WBD Common Stock(4) | | | | | 122,224 | | (8) | 2,787,258 | | | G. Zeiler | | | | | | | | WBD Common Stock(4) | | | | | 0 | | | 0 | |
(1)Represents the value of cash and stock actually received upon exercise of the applicable SARs and stock options listed in the corresponding column of the table. For SARs, the value was computed by determining the difference between: (i) the average closing price of the underlying Discovery Series A common stock or Series C common stock (as applicable) on the 10 days preceding and including the award grant date and the 10 days following the award grant date and (ii) the average closing price of the underlying Discovery Series A common stock or Series C common stock (as applicable) on the 10 days preceding and including the exercise date and the 10 days following the exercise date. In connection with the WarnerMedia Transaction, each issued and outstanding share of Discovery Series A common stock and Discovery Series C common stock was reclassified and automatically converted into one share of WBD common stock. (2)Represents the value realized upon RSU and PRSU vesting and distributions listed in the corresponding column of the table, using the closing market price of our common stock on the vesting or distribution date (as applicable). (3)Represents the vesting and automatic exercise of Mr. Zaslav’s January 2, 2018 SARs grant. (4)WBD Common Stock as used herein includes Discovery Series A common stock during the period from January 1, 2022 through April 8, 2022 and WBD Series A common stock during the period from April 12, 2022 through December 31, 2022 (5)Represents the distribution of Mr. Zaslav’s 127,075 shares of Discovery Series A common stock from his February 23, 2017 PRSU grant; 154,194 shares of Discovery Series A common stock from his March 1, 2018; 85,840 shares of Discovery Series A common stock from his March 1, 2019 | | | | | | | | | | | | | | | | | | | | Option awards | | | Stock awards | | Name | | Number of shares
acquired on exercise
(#) | | | Value realized
on exercise
($)1 | | | Number of shares
acquired on vesting
(#) | | | Value realized on
vesting
($)2 | | D. Zaslav | | | | | | | | | | | | | | | | | Series A Common Stock | | | 451,984 | 3 | | | 1,441,829 | | | | 573,915 | 4 | | | 15,862,016 | | Series C Common Stock | | | 451,984 | 3 | | | 1,175,158 | | | | 272,469 | 4 | | | 6,729,984 | | G. Wiedenfels | | | | | | | | | | | | | | | | | Series A Common Stock | | | 0 | | | | 0 | | | | 15,945 | 5 | | | 437,212 | | Series C Common Stock | | | 0 | | | | 0 | | | | 0 | | | | 0 | | B. Campbell | | | | | | | | | | | | | | | | | Series A Common Stock | | | 0 | | | | 0 | | | | 42,707 | 6 | | | 1,233,725 | | Series C Common Stock | | | 0 | | | | 0 | | | | 0 | | | | 0 | | J. Perrette | | | | | | | | | | | | | | | | | Series A Common Stock | | | 12,585 | 7 | | | 39,389 | | | | 106,335 | 8 | | | 3,057,874 | | Series C Common Stock | | | 12,585 | 7 | | | 29,325 | | | | 0 | | | | 0 | | P. Faricy | | | | | | | | | | | | | | | | | Series A Common Stock | | | 0 | | | | 0 | | | | 0 | | | | 0 | | Series C Common Stock | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
(6)Represents the vesting of RSUs granted to Mr. Wiedenfels on March 1, 2018, March 1, 2019, February 28, 2020, and March 1, 2021. (7)Represents the vesting of RSUs granted to Mr. Campbell on March 1, 2018, March 1, 2019, February 28, 2020, and March 1, 2021. Additionally, this represents the vesting of RSUs granted on March 1, 2022 and July 15, 2022 that were distributed for taxes due to retirement eligibility. (8)Represents vesting of RSUs granted to Mr. Perrette on March 1, 2018, February 4, 2019, March 1, 2019, February 28, 2020, and March 1, 2021. 1 | Represents the value of cash and stock actually received upon exercise of the applicable SARs and stock options listed in the corresponding column of the table. For SARs, the value was computed by determining the difference between: (i) the average closing price of the underlying Series A common stock or Series C common stock (as applicable) on the 10 days preceding and including the award grant date and the 10 days following the award grant date and (ii) the average closing price of the underlying Series A common stock or Series C common stock (as applicable) on the 10 days preceding and including the exercise date and the 10 days following the exercise date.
| | | | |
270 | Represents the value realized upon RSU and PRSU vesting and distributions listed in the corresponding column of the table, using the closing market price of the Series A common stock or Series C common stock (as applicable) on the vesting or distribution date.
|
3 | Represents the vesting and automatic exercise of 451,984 shares of Series A common stock and 451,984 shares of Series C common stock from Mr. Zaslav’s January 2, 2018 SARs grant.
|
4 | Represents the distribution of Mr. Zaslav’s 227,500 shares of Series A common stock and 227,500 shares of Series C common stock from his February 28, 2014 PRSU grant; 44,969 shares of Series A common stock and 44,969 shares of Series C common stock from his February 23, 2015 PRSU grant; and 301,446 shares of Series A common stock from his February 26, 2016 PRSU grant.
|
5 | Represents vesting of RSUs granted to Mr. Wiedenfels on May 22, 2017.
|
6 | Represents aggregate vesting of PRSUs granted to Mr. Campbell on February 23, 2015 and PRSUs granted on February 26, 2016.
|
7 | Represents the exercise of stock options granted to Mr. Perrette on March 15, 2012.
|
8 | Represents vesting of PRSUs granted to Mr. Perrette on February 23, 2015, February 26, 2016 and June 16, 2016.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
2022 Nonqualified Deferred Compensation1 | | | | | | | | | | | | | | | | | | | | | Name | | Executive
contributions
in last
FY
($) | | | Registrant
contributions
in last
FY
($) | | | Aggregate
earnings
in last
FY
($) | | | Aggregate
withdrawals/
distributions
($) | | | Aggregate
balance at last
FYE
($) | | D. Zaslav | | | — | | | | — | | | | 12,565,530 | | | | — | | | | 73,845,914 | 4 | G. Wiedenfels | | | 484,501 | 2 | | | — | | | | 310,987 | | | | — | | | | 1,855,502 | 5 | B. Campbell | | | 92,181 | 3 | | | — | | | | 1,046,357 | | | | — | | | | 6,258,244 | 6 | J. Perrette | | | — | | | | — | | | | 395,064 | | | | — | | | | 1,828,494 | 7 | P. Faricy | | | — | | | | — | | | | 11,127 | | | | — | | | | 614,299 | 8 |
1 | This table provides information with respect to the SRP for senior employees. For more information regarding the SRP, please see “Compensation Discussion and Analysis—2019 NEO Compensation – Retirement Benefits” above.
|
2 | This amount is also reported under“Non-Equity Incentive Plan Compensation” for 2019 in the 2019 Summary Compensation Table.
|
3 | This amount is also reported under “Salary” for 2019 in the 2019 Summary Compensation Table.
|
4 | $41,895,169 of this amount was reported as compensation to Mr. Zaslav in our Summary Compensation Tables for previous years.
|
5 | $1,024,023 of this amount was reported as compensation to Mr. Wiedenfels in our Summary Compensation Tables for previous years.
|
6 | $3,940,596 of this amount was reported as compensation to Mr. Campbell in our Summary Compensation Tables for previous years.
|
7 | $1,401,446 of this amount was reported as compensation to Mr. Perrette in our Summary Compensation Tables for previous years.
|
8 | $600,000 of this amount was reported as compensation to Mr. Faricy in our Summary Compensation Table for the 2018 fiscal year.
|
(1) | | | | | | | | | | | | | | | | | | | | | | | | | Name | Executive
contributions
in last FY
($) | Registrant
contributions
in last FY
($) | Aggregate
earnings
in last FY
($) | Aggregate
withdrawals/
distributions
($) | Aggregate
balance
at last FYE
($) | | D. Zaslav | — | | | — | | 965,365 | | — | | 73,712,751 | | (3) | | G. Wiedenfels | — | | | — | | (547,950) | | — | | 2,745,766 | | (4) | | B. Campbell | 242,427 | | (2) | — | | (1,330,768) | | — | | 7,180,588 | | (5) | | J. Perrette | — | | | — | | (420,499) | | — | | 2,098,964 | | (6) | | G. Zeiler | — | | | — | | — | | — | | — | | |
(1)This table provides information with respect to the SRP for senior employees. For more information regarding the SRP, please see “Compensation Discussion and Analysis—2022 NEO Compensation—Retirement Benefits” above. (2)This amount is also reported under “Salary” for 2022 in the 2022 Summary Compensation Table. (3)$41,895,169 of this amount was reported as compensation to Mr. Zaslav in our Summary Compensation Tables for previous years. (4)$2,034,602 of this amount was reported as compensation to Mr. Wiedenfels in our Summary Compensation Tables for previous years. (5)$4,220,340 of this amount was reported as compensation to Mr. Campbell in our Summary Compensation Tables for previous years. (6)$1,401,446 of this amount was reported as compensation to Mr. Perrette in our Summary Compensation Tables for previous years. Potential Payments Uponupon Termination or Change in Control The following summarizestable and accompanying narrative disclosures summarize the potential payments and other benefits required to be made available to the NEOs in connection with a termination of their employment or a change in control. Payments or other benefits under benefit plans and policies that apply equally to all salaried employees participating in such plans, including our life insurance plan, are not included below. AmountsSimilarly, amounts that could be recognized under equity awards that were vested as of December 31, 2019 also2022 are not included below, as the treatment of the vested awards for our NEOs is identical forto the treatment afforded all employees under the termination scenarios described in this section. In the event of a change of control, there is a double trigger on potential payments to the NEOs (other than the CEO), requiring both a change of control and an involuntary termination without cause or voluntary termination for good reason occurring within 12 months of the change of control. Under no circumstances would any of the NEOs be eligible for a post-termination payment if they were terminated for "cause." Defined terms such as “cause,” “good reason,” and “change of control” used in this section are described under “—Defined Terms”“Defined Terms Used in this Section” below. The quantitative examples provided in the table below assume: ■the applicable NEO ceasingceased to be employed by DiscoveryWBD as of the close of business on December 31, 2019; 2022;■the applicable NEO (other than the CEO) was eligible to receive their standard 2022 cash bonus (cash bonus target times Company performance, no performance pool allocation or other discretionary amounts) in all scenarios because the terms of our ICP and other cash bonus programs provide that cash bonus awards are deemed to be earned if the individual is employed on December 31, 2022; ■for stock option awards, the value shown in the table is calculated on agrant-by-grant basis by multiplying the number of unvested options granted by the difference between the exercise price for such option and $9.48 the closing price of our respective series of common stock on December 31, 2019,30, 2022, the last trading day of the year; The closing price of our Series A common stock on December 31, 2019 was $32.74;
The closing price of our Series C common stock on December 31, 2019 was $30.49;
for■For PRSU/RSU awards, the value shown in the table is calculated on agrant-by-grant basis by multiplying the number of unvested PRSUs/RSUs granted by $9.48, the closing price of our respective series of common stock on December 31, 2019,30, 2022, the last trading day of the year;
The closing price of our Series A common stock on December 31, 2019 was $32.74;
The closing price of our Series C common stock on December 31, 2019 was $30.49;
for SAR awards, the value shown in the table is calculated on agrant-by-grant basis by multiplying the number of unvested SAR units granted by the difference between the measurement price and the average price of the respective series of common stock on the ten days preceding and including December 31, 2019, and the ten trading days thereafter;
The average price of our Series A common stock on the ten trading days preceding and including December 31, 2019, and the ten trading days thereafter was $32.43;
The average price of our Series C common stock on the ten trading days preceding and including December 31, 2019, and the ten trading days thereafter was $30.29;
each■no NEO not meetingmet the definition of “retirement” in the applicable agreements and plans as of December 31, 2019;
2022;■all accrued salary at that assumed termination date havingwas previously been paid; and ■all accrued vacation for 2019 having been2022 was used. David M. Zaslav
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Quantification of Payments Upon Termination or Change in Control The table below summarizes the potential benefits that would have been paid to Mr. Zaslaveach of the NEOs had his employment been terminated under any of the circumstances noted as of December 31, 2019.2022. Please see “NEO Employment Agreements—CEO Employment Agreement” beginning on page 34 of"Defined Terms Used in this Section" for additional information. The summary provided below is qualified in its entirety by reference to the CD&A for a detailed discussion of the various termination scenarios reported in the table below. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Benefits and
Payments Upon Termination | | Voluntary
Termination
($) | | | Death
($) | | | Disability
($) | | | Involuntary
Termination
Without
Cause
($) | | | Voluntary for
Good
Reason
($) | | | Voluntary
Within 30
Days after
31st Day
Following
Change in
Control
($) | | | Involuntary
Termination
Without Cause
or Voluntary
Termination
for Good
Reason
Following a
Change in
Control
($) | | | Involuntary
Termination
for Cause
($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | | | 0 | | | | 0 | | | | 0 | | | | 6,000,000 | | | | 6,000,000 | | | | 6,000,000 | | | | 6,000,000 | | | | 0 | | Bonus | | | 21,769,000 | | | | 21,769,000 | | | | 21,769,000 | | | | 38,910,565 | | | | 38,910,565 | | | | 38,910,565 | | | | 38,910,565 | | | | 0 | | | | | | | | | | | Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SARs | | | 0 | | | | 33,526,410 | | | | 33,526,410 | | | | 33,526,410 | | | | 33,526,410 | | | | 33,526,410 | | | | 33,526,410 | | | | 0 | | Stock Options | | | 0 | | | | 30,185,210 | | | | 30,185,210 | | | | 30,185,210 | | | | 30,185,210 | | | | 30,185,210 | | | | 30,185,210 | | | | 0 | | PRSU | | | 0 | | | | 66,839,568 | | | | 66,839,568 | | | | 66,839,568 | | | | 66,839,568 | | | | 66,839,568 | | | | 66,839,568 | | | | 0 | | | | | | | | | | | Benefits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | COBRA premiums | | | 0 | | | | 38,245 | | | | 61,616 | | | | 38,245 | | | | 38,245 | | | | 38,245 | | | | 38,245 | | | | 0 | |
Gunnar Wiedenfels
The following table summarizes the potential benefits that would have been paid to Mr. Wiedenfels had his employment terminated under any of the circumstances noted as of December 31, 2019. Please see the narrative disclosure immediately below the table for a detailed discussion of the various termination scenarios reported in the table below.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Benefits and Payments Upon Termination | | Voluntary
Termination
($) | | | Death
($) | | | Disability
($) | | | Involuntary
Termination
Without Cause
($) | | | Voluntary
Termination
for Good
Reason
($) | | | Involuntary
Termination
Without Cause
or Voluntary
Termination
for Good
Reason
Following a
Change in
Control
($) | | | Involuntary
Termination
for Cause
($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | | | (583,495 | ) | | | 0 | | | | 0 | | | | 1,555,987 | | | | 1,555,987 | | | | 1,555,987 | | | | 0 | | Bonus | | | 2,630,388 | | | | 2,630,388 | | | | 2,630,388 | | | | 2,800,776 | | | | 2,800,776 | | | | 2,800,776 | | | | 0 | | | | | | | | | | Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | 0 | | | | 2,521,467 | | | | 2,521,467 | | | | 609,875 | | | | 0 | | | | 2,521,467 | | | | 0 | | RSU | | | 0 | | | | 5,061,800 | | | | 5,061,800 | | | | 666,357 | | | | 0 | | | | 5,061,800 | | | | 0 | | | | | | | | | | Benefits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | COBRA premiums | | | 0 | | | | 0 | | | | 61,616 | | | | 38,245 | | | | 38,245 | | | | 38,245 | | | | 0 | | Repatriation | | | 0 | | | | 176,000 | | | | 176,000 | | | | 176,000 | | | | 176,000 | | | | 176,000 | | | | 0 | |
By Discovery Other than for Death, Disability or Cause; By Mr. Wiedenfels for Good Reason. If Mr. Wiedenfels’ employment is terminated by us other than for death, disability or “Cause” as defined in the Wiedenfels Employment Agreement and set forth on page 69 below, including termination by reason of ournon-renewal of his employment agreement without offering him a Qualifying Renewal Offer, or by Mr. Wiedenfels for “Good Reason,” Mr. Wiedenfels’ employment agreement entitles him to receive payments for the following (subject to obligations to mitigate the severance and offset by compensation earned post-employment):
(1) all accrued and unpaid salary, accrued and unused vacation, and other vested benefits under our welfare and benefit plans;
(2) current salary for the longest of the balance of the term of the employment agreement, one year, or the length of time for which Mr. Wiedenfels would otherwise be eligible to receive severance payments under the Company’s severance plan then in effect;
(3) payment of Mr. Wiedenfels’ full unprorated bonus under the Company’s bonus or incentive plan for the year in which the termination occurs, payable the following year, in the ordinary course of our bonus payments and subject to achievementtext of the applicable performance metric, but capped for Company and division performance at 100%;
(4) reimbursement for up to 18 monthsNEO employment agreement, each of continued health coverage under COBRA should he be eligible for and elect COBRA benefits, subject to alternative treatment if required by applicable law, provided that if the severance periodwhich is longer than 18 months, Mr. Wiedenfels would be eligible to receive at the end of the18-month periodfiled as an amount equalexhibit to the then-current COBRA premium for the number2022 Form 10-K.
| | | | | | | | | | | | | | | | | | | | | | | | | Voluntary Termination ($) | Death ($) | Disability ($) | Involuntary Termination Without Cause ($) | Voluntary Termination for Good Reason ($) | Involuntary Termination Without Cause or Voluntary Termination for Good Reason Following a Change in Control ($) | Voluntary Termination Within 30 Days after 31st Day Following Change in Control ($) | | D. Zaslav | | | | | | | | Base Salary | 0 | | 0 | | 0 | | 6,000,000 | | 6,000,000 | | 6,000,000 | | 6,000,000 | | | Bonus | 21,824,000 | | 21,824,000 | | 21,824,000 | | 45,824,000 | | 45,824,000 | | 45,824,000 | | 45,824,000 | | | Stock Options | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | | PRSUs | 0 | | 6,279,998 | | 6,279,998 | | 6,279,998 | | 6,279,998 | | 6,279,998 | | 6,279,998 | | | Cobra Premiums | 0 | | 27,331 | | 44,033 | | 27,331 | | 27,331 | | 27,331 | | | | Total | 21,824,000 | | 28,131,329 | | 28,148,031 | | 58,131,329 | | 58,131,329 | | 58,131,329 | | 58,103,998 | | | G. Wiedenfels | | | | | | | | Base Salary | 0 | | 0 | | 0 | | 4,000,000 | | 4,000,000 | | 4,000,000 | | 0 | | | Bonus | 3,472,000 | | 3,472,000 | | 3,472,000 | | 7,000,000 | | 7,000,000 | | 7,000,000 | | 0 | | | Stock Options | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | | RSUs | 0 | | 4,332,777 | | 4,332,777 | | 1,945,913 | | 1,945,913 | | 4,332,777 | | 0 | | | Cobra Premiums | 0 | | 0 | | 63,893 | | 39,658 | | 39,658 | | 39,658 | | 0 | | | Repatriation | 0 | | 191,400 | | 191,400 | | 191,400 | | 191,400 | | 191,400 | | 0 | | | Total | 3,472,000 | | 7,996,177 | | 8,060,070 | | 13,176,971 | | 13,176,971 | | 15,563,835 | | 0 | | | B. Campbell | | | | | | | | Base Salary | — | | — | | — | | 5,000,000 | | 5,000,000 | | 5,000,000 | | — | | | Bonus | 4,780,000 | | 4,780,000 | | 4,780,000 | | 10,000,000 | | 10,000,000 | | 10,000,000 | | — | | | Stock Options | — | | — | | — | | — | | — | | — | | — | | | RSUs | 2,778,512 | | 3,637,078 | | 3,637,078 | | 3,637,078 | | 3,637,078 | | 3,637,078 | | — | | | Cobra Premiums | — | | — | | 63,893 | | 39,658 | | 39,658 | | 39,658 | | — | | | Total | 7,558,512 | | 8,417,078 | | 8,480,971 | | 18,676,736 | | 18,676,736 | | 18,676,736 | | — | | | J. Perrette | | | | | | | | Base Salary | 0 | | 0 | | 0 | | 5,000,000 | | 5,000,000 | | 5,000,000 | | 0 | | | Bonus | 4,780,000 | | 4,780,000 | | 4,780,000 | | 10,000,000 | | 10,000,000 | | 10,000,000 | | 0 | | | Stock Options | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | | RSUs | 0 | | 4,234,621 | | 4,234,621 | | 1,675,539 | | 1,675,539 | | 4,234,621 | | 0 | | | Cobra Premiums | 0 | | 0 | | 61,218 | | 37,998 | | 37,998 | | 37,998 | | 0 | | | Total | 4,780,000 | | 9,014,621 | | 9,075,839 | | 16,713,537 | | 16,713,537 | | 19,272,619 | | 0 | | | G. Zeiler | | | | | | | | Base Salary | 0 | | 0 | | 0 | | 3,406,200 | | 3,406,200 | | 3,406,200 | | 0 | | | Bonus | 2,734,429 | | 2,734,429 | | 2,734,429 | | 6,063,036 | | 6,063,036 | | 6,063,036 | | 0 | | | RSUs | 1,233,320 | | 1,233,320 | | 1,233,320 | | 1,233,320 | | 1,233,320 | | 1,233,320 | | 0 | | | Cobra Premiums | 0 | | 0 | | 45,198 | | 28,054 | | 28,054 | | 28,054 | | 0 | | | Total | 3,967,749 | | 3,967,749 | | 4,012,947 | | 10,730,610 | | 10,730,610 | | 10,730,610 | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Defined Terms Used in this Section The descriptions of months remaining in the severance period;(5) the fully vested Wiedenfels SRP Contribution conditioned on the execution and effectiveness of a release within the60-calendar day period following the date of Mr. Wiedenfels separation from service; and
(6) repatriation benefits to return Mr. Wiedenfels and his family to Germany, as those benefits would be if Mr. Wiedenfels were separating during an expatriate assignment from Germany to the United States.
The term of his employment agreement ends April 1, 2021 and may be renewed by the parties for an additional term. If the Company does not elect to negotiate to renew the agreement, Mr. Wiedenfels would be entitled to the severance benefits described above at the end of his original employment term. Further, if the Company offers to renew the agreement with a Qualifying Renewal Offer, but the parties are unable to agree on final terms, and Mr. Wiedenfels terminates his employment at the end of his employment term, Mr. Wiedenfels will be eligible for a noncompetition payment consisting of an amount equal to 50% of his annual base salary for one year following the conclusion of his employment.
Notwithstanding the foregoing, in the event Mr. Wiedenfels’ employment is terminated by us not for “cause” and we have a standard severance policy at the time of termination which would provide Mr. Wiedenfels with a sum greater than these arrangements, Mr. Wiedenfels will be entitled to such greater sum.
As a condition to receiving the severancepotential payments described above, Mr. Wiedenfels would be required to sign a general release and, if such termination occurs during the original employment term, comply with the restrictive covenants in his employment agreement.
By Discovery for Cause; By Mr. Wiedenfels Other than for Good Reason. If Mr. Wiedenfels’ employment is terminated by us for “Cause” or by Mr. Wiedenfels other than for “Good Reason”, his employment agreement entitles him to receive only those amounts or benefits that have been earned or vested at the time of the termination in accordance with our applicable plans and programs. This generally would include accrued and unpaid salary and accrued and unused vacation, in each case in a lump sum, and any other vested benefits under our welfare and benefit plans.
By Reason of Death or Disability. Mr. Wiedenfels’ employment agreement provides for the payment of the following amounts upon termination or change of his employment by reason of his death or disability:
(1) any amounts payable in accordance with the Company’s applicable benefits program, including accrued and unpaid salary, accrued and unused vacation, a prorated portion of Mr. Wiedenfels’ then-current annual bonus target for the calendar year in which the death or disability occurred, and other vested benefits under the Company’s welfare and benefit plans; and
(2) in the event of termination for disability, continued coverage under our medical or disability plans to the extent permitted by the plans and to the extent such benefits continue to be provided to the Company’s executives generally, until Mr. Wiedenfels is no longer disabled or reaches age 65, whichever occurs first, and payment, in a lump sum, of an amount equivalent to the monthly premium for COBRA coverage for the remaining balance of the employment term, should Mr. Wiedenfels be eligible for and elect COBRA benefits, subject to alternative treatment if required by applicable law.
Bruce L. Campbell
The following table summarizes the potential benefitscontrol set forth above utilize certain terms that would have been paid to Mr. Campbell had his employment terminated under any of the circumstances noted as of December 31, 2019. Please see the narrative disclosure immediately below the table for a detailed discussion of the various termination scenarios reported in the table below.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Benefits and Payments Upon Termination | | Voluntary
Termination
($) | | | Death
($) | | | Disability
($) | | | Involuntary
Termination
Without Cause
($) | | | Voluntary
Termination
for Good
Reason
($) | | | Involuntary
Termination
Without Cause
or Voluntary
Termination
for Good
Reason
Following a
Change in
Control
($) | | | Involuntary
Termination
for Cause
($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | | | (927,000 | ) | | | 0 | | | | 0 | | | | 4,017,000 | | | | 4,017,000 | | | | 4,017,000 | | | | 0 | | Bonus | | | 4,061,765 | | | | 4,061,765 | | | | 4,061,765 | | | | 6,842,765 | | | | 6,842,765 | | | | 6,842,765 | | | | 0 | | | | | | | | | | Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | 0 | | | | 2,531,163 | | | | 2,531,163 | | | | 1,044,056 | | | | 0 | | | | 2,531,163 | | | | 0 | | PRSU | | | 0 | | | | 2,315,078 | | | | 2,315,078 | | | | 2,315,078 | | | | 0 | | | | 2,315,078 | | | | 0 | | RSU | | | 0 | | | | 8,880,299 | | | | 8,880,299 | | | | 2,332,299 | | | | 0 | | | | 8,880,299 | | | | 0 | | | | | | | | | | Benefits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | COBRA premiums | | | 0 | | | | 0 | | | | 61,616 | | | | 38,245 | | | | 38,245 | | | | 38,245 | | | | 0 | |
By Discovery Other than for Death, Disability or Cause; By Mr. Campbell for Good Reason. If Mr. Campbell’s employment is terminated by us other than for death, disability or “Cause” asare defined in the Campbell Employment Agreement and set forth on page 70 below, including termination by reason of ournon-renewal of his employment agreement without offering him a Qualifying Renewal Offer, or by Mr. Campbell for “Good Reason,” Mr. Campbell’s employment agreement entitles him to receive payments for the following (subject to obligations to mitigate the severance and offset by compensation earned post-employment):
(1) all accrued and unpaid salary, accrued and unused vacation, and other vested benefits under our welfare and benefit plans;
(2) current salary for the longest of the balance of the term of the employment agreement, one year, or the length of time for which Mr. Campbell would otherwise be eligible to receive severance payments under the Company’s severance plan then in effect;
(3) payment of Mr. Campbell’s full, unprorated bonus under the Company’s bonus or incentive plan for the year in which the termination occurs, payable the following year, in the ordinary course of our bonus payments but capped for Company and division performance at 100%; and
(4) reimbursement for up to 18 months of continued health coverage under COBRA should he be eligible for and elect COBRA benefits, subject to alternative treatment if required by applicable law, provided that if the severance period is longer than 18 months, Mr. Campbell would be eligible to receive at the end of the18-month period an amount equal to the then-current COBRA premium for the number of months remaining in the severance period.
The term of his employment agreement ends February 14, 2022, and may be renewed by the parties for an additional term. If the Company does not elect to negotiate to renew the agreement with a Qualifying Renewal Offer, Mr. Campbell would be entitled to the severance benefits described above at the end of his original
employment term. Further, if the Company offers to renew the agreement, but the parties are unable to agree on final terms, and Mr. Campbell terminates his employment at the end of his employment term, Mr. Campbell will be eligible for a noncompetition payment consisting of an amount equal to 50% of his annual base salary for one year following the conclusion of his employment.
Notwithstanding the foregoing, in the event Mr. Campbell’s employment is terminated by us not for “Cause” or by Mr. Campbell for “Good Reason,” and we have a standard severance policy at the time of termination which would provide Mr. Campbell with a higher sum than these arrangements, Mr. Campbell will be entitled to such higher sum.
As a condition to receiving the severance payments described above, Mr. Campbell would be required to sign a general release and, if such termination occurs during the original employment term, comply with the restrictive covenants in his employment agreement.
By Discovery for Cause; By Mr. Campbell Other than for Good Reason. If Mr. Campbell’s employment is terminated by us for “Cause” or by Mr. Campbell other than for “Good Reason”, his employment agreement entitles him to receive only those amounts or benefits that have been earned or vested at the time of the termination in accordance with our applicable plans and programs. This generally would include accrued and unpaid salary and accrued and unused vacation, in each case in a lump sum, and any other vested benefits under our welfare and benefit plans.
By Reason of Death or Disability. Mr. Campbell’s employment agreement provides for the payment of the following amounts upon termination of his employment by reason of his death or disability:
(1) any amounts payable in accordance with the Company’s applicable benefits program, including accrued and unpaid salary, accrued and unused vacation, a prorated portion of Mr. Campbell’s then-current annual bonus target for the calendar year in which the death or disability occurred, and other vested benefits under the Company’s welfare and benefit plans; and
(2) in the event of termination for disability, continued coverage under our medical or disability plans to the extent permitted by the plans and to the extent such benefits continue to be provided to the Company’s executives generally, until Mr. Campbell is no longer disabled or reaches age 65, whichever occurs first, and payment, in a lump sum, of an amount equivalent to the monthly premium for COBRA coverage for the remaining balance of the employment term, should Mr. Campbell be eligible for and elect COBRA benefits, subject to alternative treatment if required by applicable law.
Jean-Briac Perrette
The following table summarizes the potential benefits that would have been paid to Mr. Perrette had his employment terminated under any of the circumstances noted as of December 31, 2019. Please see the narrative disclosure immediately below the table for a detailed discussion of the various termination scenarios reported in the table below.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Benefits and Payments Upon Termination | | Voluntary
Termination
($) | | | Death
($) | | | Disability
($) | | | Involuntary
Termination
Without Cause
($) | | | Voluntary
Termination
for Good
Reason
($) | | | Involuntary
Termination
Without Cause
or Voluntary
Termination
for Good
Reason
Following a
Change in
Control
($) | | | Involuntary
Termination
for Cause
($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | | | (974,323 | ) | | | 0 | | | | 0 | | | | 2,922,968 | | | | 2,922,968 | | | | 2,922,968 | | | | 0 | | Bonus | | | 4,732,222 | | | | 4,732,222 | | | | 4,732,222 | | | | 4,732,222 | | | | 4,732,222 | | | | 4,732,222 | | | | 0 | | | | | | | | | | Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | 0 | | | | 2,827,622 | | | | 2,827,622 | | | | 1,197,814 | | | | 0 | | | | 2,827,622 | | | | 0 | | PRSU | | | 0 | | | | 4,569,784 | | | | 4,569,784 | | | | 4,569,784 | | | | 0 | | | | 4,569,784 | | | | 0 | | RSU | | | 0 | | | | 8,755,625 | | | | 8,755,625 | | | | 721,884 | | | | 0 | | | | 8,755,625 | | | | 0 | | | | | | | | | | Benefits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | COBRA premiums | | | 0 | | | | 0 | | | | 44,160 | | | | 27,410 | | | | 27,410 | | | | 27,410 | | | | 0 | | Repatriation | | | 0 | | | | 129,200 | | | | 129,200 | | | | 129,200 | | | | 129,200 | | | | 129,200 | | | | 0 | |
By Discovery Other than for Death, Disability or Cause; By Mr. Perrette for Good Reason. If Mr. Perrette’s employment is terminated by us other than for death, disability or “Cause” as defined in his employment agreement, including termination by reason of ournon-renewal of his employment agreement without offering him a Qualifying Renewal Offer, or by Mr. Perrette for “Good Reason,” Mr. Perrette’s employment agreement entitles him to receive payments for the following (subject to obligations to mitigate the severance and to offsets by compensation earned post-employment):
(1) all accrued and unpaid salary, accrued and unused vacation, and other vested benefits under our welfare and benefit plans.
(2) current salary for the longest of the balance of the term of the employment agreement, one year, or the length of time for which Mr. Perrette would otherwise be eligible to receive severance payments under the Company’s U.K. severance redundancy plan then in effect;
(3) the prorated portion of Mr. Perrette’s bonus under the Company’s bonus or incentive plan for the year in which the termination occurs (subject to achievement of the applicable performance metrics but capped for Company and division performance at 100%); and
(4) reimbursement for up to 18 months of continued health coverage under COBRA should he be eligible for and elect COBRA benefits, subject to alternative treatment if required by applicable law, provided that if the severance period is longer than 18 months, Mr. Perrette would be eligible to receive at the end of the18-month period an amount equal to the then-current COBRA premium for the number of months remaining in the severance period.
Mr. Perrette’s employment term is scheduled to end on June 30, 2022 and may be renewed by the parties for an additional term. If the Company does not elect to negotiate to renew the agreement with a Qualifying Renewal Offer, Mr. Perrette would be entitled to the severance benefits described above at the end of the employment
term. Further, if the Company offers to renew the agreement, but the parties are unable to agree on final terms, and Mr. Perrette terminates his employment at the end of his employment term, Mr. Perrette will be eligible for a noncompetition payment consisting of an amount equal to 50% of his annual base salary for one year following the conclusion of his employment, which will be increased to 100% if he seeks to engage in a competitive activity and permission to do so is denied by us.
Notwithstanding the foregoing, in the event Mr.��Perrette’s employment is terminated by us not for “Cause” or by Mr. Perrette for “Good Reason,” and we have a standard severance policy at the time of termination which would provide Mr. Perrette with a higher sum than these arrangements, Mr. Perrette will be entitled to such higher sum.
As a condition to receiving the severance payments described above, Mr. Perrette would be required to sign a general release and, if such termination occurs during the employment term, comply with the restrictive covenants in his employment agreement.
By Discovery for Cause; By Mr. Perrette Other than for Good Reason. If Mr. Perrette’s employment is terminated by us for “Cause” or by Mr. Perrette other than for “Good Reason”, his employment agreement entitles him to receive only those amounts or benefits that have been earned or vested at the time of the termination in accordance with our applicable plans and programs. This generally would include accrued and unpaid salary and accrued and unused vacation, in each case in a lump sum, and any other vested benefits under our welfare and benefit plans.
By Reason of Death or Disability. Mr. Perrette’s employment agreement provides for the payment of the following amounts upon termination of his employment by reason of his death or disability:
(1) any amounts payable in accordance with the Company’s applicable benefits program, including accrued and unpaid salary, accrued and unused vacation, and other vested benefits under the Company’s welfare and benefit plans; and
(2) in the event of termination for disability, continued coverage under our medical or disability plans to the extent permitted by the plans and to the extent such benefits continue to be provided to the Company’s executives generally, until Mr. Perrette is no longer disabled or reaches age 65, whichever occurs first, subject to alternative treatment if required by applicable law.
Upon Discovery’s Election Not to Extend Term. If we exercise our option not to extend Mr. Perrette’s employment beyond the then-current term, Mr. Perrette’s employment agreement entitles him to receive the severance payments reflected above.
Peter Faricy
The following table summarizes the potential benefits that would have been paid to Mr. Faricy had his employment terminated under any of the circumstances noted as of December 31, 2019. Please see the narrative disclosure immediately below the table for a detailed discussion of the various termination scenarios reported in the table below.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Benefits and Payments Upon Termination | | Voluntary
Termination
($) | | | Death
($) | | | Disability
($) | | | Involuntary
Termination
Without Cause
($) | | | Voluntary
Termination
for Good
Reason
($) | | | Involuntary
Termination
Without Cause
or Voluntary
Termination
for Good
Reason
Following a
Change in
Control
($) | | | Involuntary
Termination
for Cause
($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | | | (700,000 | ) | | | 0 | | | | 0 | | | | 2,450,000 | | | | 2,450,000 | | | | 2,450,000 | | | | 0 | | Bonus | | | 2,279,712 | | | | 2,279,712 | | | | 2,279,712 | | | | 2,279,712 | | | | 2,279,712 | | | | 2,279,712 | | | | 0 | | | | | | | | | | Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | 0 | | | | 619,678 | | | | 619,678 | | | | 154,917 | | | | 0 | | | | 619,678 | | | | 0 | | RSU | | | 0 | | | | 4,795,330 | | | | 4,795,330 | | | | 0 | | | | 0 | | | | 4,795,330 | | | | 0 | | | | | | | | | | Benefits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SRP | | | 0 | | | | 0 | | | | 0 | | | | 411,580 | | | | 0 | | | | 411,580 | | | | 0 | | COBRA premiums | | | 0 | | | | 0 | | | | 61,616 | | | | 38,245 | | | | 38,245 | | | | 38,245 | | | | 0 | |
By Discovery Other than for Death, Disability or Cause; By Mr. Faricy for Good Reason. If Mr. Faricy’s employment is terminated by us other than for death, disability or “Cause” as defined in the Faricy Employment Agreement and set forth below on page 74, including termination by reason of ournon-renewal of his employment agreement without offering him a Qualifying Renewal Offer, or by Mr. Faricy for “Good Reason,” Mr. Faricy’s employment agreement entitles him to receive payments for the following (subject to obligations to mitigate the severance and to offset by compensation earned post-employment):
(1) all accrued and unpaid salary, accrued and unused vacation, and other vested benefits under our welfare and benefit plans;
(2) current salary for the longest of the balance of the term of the employment agreement, one year, or the length of time for which Mr. Faricy would otherwise be eligible to receive severance payments under the Company’s severance plan then in effect;
(3) payment of Mr. Faricy’s full, unprorated bonus under the Company’s bonus or incentive plan for the year in which the termination occurs, payable the following year, in the ordinary course of our bonus payments; and
(4) the fully vested Faricy SRP Contribution conditioned on the execution and effectiveness of a release within the 60 calendar day period following the date of Mr. Faricy’s separation from service.
The term of his employment agreement ends September 16, 2021, and may be renewed by the parties for an additional term. If the Company does not elect to negotiate to renew the agreement, Mr. Faricy would be entitled to the severance benefits described above at the end of his original employment term. Further, if the Company offers to renew the agreement, but the parties are unable to agree on final terms, and Mr. Faricy terminates his employment at the end of his employment term, Mr. Faricy will be eligible for a noncompetition payment consisting of an amount equal to 50% of his annual base salary for one year following the conclusion of his employment.
Notwithstanding the foregoing, in the event Mr. Faricy’s employment is terminated by us not for “Cause” or by Mr. Faricy for “Good Reason,” and we have a standard severance policy at the time of termination which would provide Mr. Faricy with a higher sum than these arrangements, Mr. Faricy will be entitled to such higher sum.
As a condition to receiving the severance payments described above, Mr. Faricy would be required to sign a general release and, if such termination occurs during the original employment term, comply with the restrictive covenants in his employment agreement.
By Discovery for Cause; By Mr. Faricy Other than for Good Reason. If Mr. Faricy’s employment is terminated by us for “Cause” or by Mr. Faricy other than for “Good Reason”, his employment agreement entitles him to receive only those amounts or benefits that have been earned or vested at the time of the termination in accordance with our applicable plans and programs. This generally would include accrued and unpaid salary and accrued and unused vacation, in each case in a lump sum, and any other vested benefits under our welfare and benefit plans.
By Reason of Death or Disability. Mr. Faricy’s employment agreement provides for the payment of the following amounts upon termination of his employment by reason of his death or disability: any amounts payable in accordance with the Company’s applicable benefits program, including accrued and unpaid salary, accrued and unused vacation, a prorated portion of Mr. Faricy’s then-current annual bonus target for the calendar year in which the death or disability occurred, and other vested benefits under the Company’s welfare and benefit plans.
Defined Terms
The 2013 Incentive Plan, our WBD Stock Incentive Plan, our Incentive Compensation Program, and in each of the individual employment agreements with our NEOs include definitions of various terms relevant to determining whether amounts will be paid.NEOs. Set forth below is a summary of the defined terms referred to in this section.
Defined Terms from 2013 Incentive Plan. and WBD Stock Incentive Plan Under each NEO’s respective award agreement for awards made after 2013 and our standard form of award agreement, a Change of Control“Change in Control” means an “Approved Transaction,” “Control Purchase,” or “Board Change,” each as defined in the 2013 Incentive Plan or WBD Stock Incentive Plan, as applicable, provided that the transaction actually closes and the qualifying separation from employment occurs within 12 months after the closing date. Under The meanings of those terms, under the 2013 Incentive Plan “Approvedand WBD Stock Incentive Plane are as follows:
■“Approved Transaction” means any transaction in which the Board (or, if approval of the Board is not required as a matter of law, the stockholders of the Company) shall approve (i) any consolidation or merger of the Company, or binding share exchange, pursuant to which shares of Common Stock of the Company would be changed or converted into or exchanged for cash, securities, or other property, other than any such transaction in which the common stockholders of the Company immediately prior to such transaction have the same proportionate ownership of the Common Stock of, and voting power with respect to, the surviving corporation immediately after such transaction, (ii) any merger, consolidation or binding share exchange to which the Company is a party as a result of which the Persons who are common stockholders of the Company immediately prior thereto have less than a majority of the combined voting power of the outstanding capital stock of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors immediately following such merger, consolidation or binding share exchange, (iii) the adoption of any plan or proposal for the liquidation or dissolution of the Company, or (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, provided that, with respect to clauses (i) through (iv), the Approved Transaction will not occur until the closing of the event described in such clause.Under the 2013 Incentive Plan, “Board
■“Board Change” means, during any period of two consecutive years, individuals who at the beginning of such period constituted the entire Board cease for any reason to constitute a majority thereof unless the election, or the nomination for election, of each new director was approved by a vote of at leasttwo-thirds of the directors then still in office who were directors at the beginning of the period. Under■“Control Purchase” under the 2013 Incentive Plan “Control Purchase” means any transaction (or series of related transactions) in which (i) any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company, any Subsidiary of the Company or any employee benefit plan sponsored by the Company or any Subsidiary of the Company or any Exempt Person (as defined below)) shall become the “beneficial owner” (as such term is defined in Rule13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule13d-3(d) under the Exchange Act in the case of rights to acquire the Company’s securities), other than in a transaction (or series of related transactions) approved by the Board. For purposes of this definition, “Exempt Person” means each of (a) the Chair of the Board, the President and each of the directors of Discovery Holding Company as of the Distribution Date, and (b) the respective family members, estates and heirs of each of the persons referred to in clause (a) above and any trust or other investment vehicle for the primary benefit of any of such persons or their respective family members or heirs. As used with respect to any person, the term “family member” means the spouse, siblings and lineal descendants of such person.
■"Control Purchase" under the WBD Stock Incentive Plan means any transaction (or series of related transactions) in which (i) any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company, any Subsidiary of the Company or any employee benefit plan sponsored by the Company or any Subsidiary of the Company) shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) under the Exchange Act in the case of rights to acquire the Company’s securities), other than in a transaction (or series of related transactions) approved by the Board.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Defined Terms from Incentive Compensation Plan. Under the ICP, “Cause”Program (“ICP”) ■“Cause” means (i) the conviction of, or nolo contendere to guilty plea, to a felony (whether any right to appeal has been or may be exercised); (ii) conduct constituting embezzlement, material misappropriation or fraud, whether or not related to the Eligible Employee’sexecutive’s employment with the Company; (iii) conduct constituting a financial crime, material act of dishonesty or conduct in violation of the Company’s Code of Business Conduct and Ethics; (iv) improper conduct substantially prejudicial to the Company’s business; (v) willful unauthorized disclosure or use of Company confidential information; (vi) material improper destruction of Company property; (vii) willful misconduct in connection with the performance of Executive’s duties; and (vii) any other conduct that constitutes Cause under the Company’s policies and procedures.Zaslav
Defined Terms from Mr. Zaslav's Employment Agreement. Under the terms of David Zaslav’s employment agreement, “Cause” ■“Cause” means (i) gross neglect, willful malfeasance by Mr. Zaslavor willful gross misconduct in connection with hisMr. Zaslav’s employment including embezzlement, misappropriation of funds, propertywhich has had a material adverse effect on the business, unless he reasonably believed in good faith that such act or corporate opportunitynon-act was in or material breach of his employment agreement, as determined bynot opposed to the Board after investigation, notice to Mr. Zaslavbest interests of the charge and provision to himCompany; (ii) conviction or plea of an opportunity to respond; (ii) if Mr. Zaslav commits any act or becomes involved in any situation or occurrence involving moral turpitude, which is materially damaging to our business or reputation; (iii) if Mr. Zaslav is convicted of, or pleads guilty or nolo contendere to, failsor failure to defend against, or is indicted for a felony or a crime involving moral turpitude; or (iv) iffelony; (iii) substantial and continuous refusal by Mr. Zaslav repeatedly or continuously refuses to perform his duties or to follow the directionlawful directions of the Board.Board (provided such directions do not include meeting any specific financial performance metrics); (iv) material breach of the restrictive covenants in Mr. Zaslav’s employment agreement; (v) violation of any policy of the Company that is generally applicable to all employees or all officers or the Company’s code of conduct, that Mr. Zaslav knows or reasonably should know could reasonably be expected to result in a material adverse effect on the Company; or (vi) Ms. Zaslav’s failure to cooperate, if requested by the Board, with any investigation or inquiry into his or the Company’s business practices. The “Cause” definition includes a requirement of notice and certain opportunities to cure.Under the terms of Mr. Zaslav’s employment agreement, “Good
■“Good Reason” means (1) reduction of Mr. Zaslav’s base salary; (2) material reduction in the amount of the annual bonus which he is eligible to earn; (3) relocation of his primary office at Discovery to a facility or location that is more than 40 miles away from his primary office location immediately prior to such relocation and is further away from his residence; (4) material reduction of his duties; or (5) material breach of his employment agreement. The “Good Reason” definition includes a requirement of notice and an opportunity to cure.Under the terms of Mr. Zaslav’s employment agreement, “Change
■“Change in Control” means (A) the merger, consolidation or reorganization of the Company with any other company (or our issuance of voting securities as consideration in a merger, consolidation or reorganization of a subsidiary with any other company) other than such a merger, consolidation or reorganization which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the other entity) at least 50% of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such merger, consolidation or reorganization, provided that either(B) within any 12 month period, incumbent directors (those persons serving as members of the Board at the beginning of the applicable 12-month period and any other person nominated for election or elected to the Board by a majority of the persons then serving on the Board who are treated as Incumbent Directors, unless such person’s election, or nomination for election, to the Board was as a result of, or in connection with, a proxy contest) shall cease to constitute a majority of the members of the Board; (C) any person, including a group as defined for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, other (i) than Advance/Newhouse Programming Partnership (individually and with its affiliates) continues to be entitled to exercise its special class voting rights described in Article IV, Section C 5(c) of the Company’s Certificate of Incorporation (as in effect on the date hereof) or the equivalent thereof (the “PreferredA-1 Blocking Rights”) and Robert J. Miron or Steven Miron is a member of the surviving company’s board (or Steven Newhouse has board observation rights), or (ii) John C. Malone (individually and with his respective affiliates) or his heirs shall beneficially ownacquire stock representing 33% or control, directly or indirectly, more than 20%of the combined voting power of the voting power represented by the outstanding “Voting Securities” (as defined in the Company’s Certificate of Incorporation)securities of the Company (such that Mr. MaloneCompany; or his heirs effectively may block any action requiring a supermajority vote under Article VII of the Company’s Certificate of Incorporation as in effect on the date hereof) or the equivalent thereof (the “Common B Blocking Rights”); (B)(D) the consummation by the Company of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than any such sale or disposition to an entity for which either (i) Advance/Newhouse (individually and with its affiliates) continues to be entitled to exercise itsPreferred A-1 Blocking Rights and Robert J. Miron or Steven Miron is a member of the surviving company’s board (or Steven Newhouse has board observation rights)or (ii) Mr. Malone (individually and with his affiliates) or his heirs continues to be entitled to exercise his Common B Blocking Rights; or (C) any sale, transfer or issuance of voting securities of the Company (including any series of related transactions) as a result of which neither Advance/Newhouse (individually and with its affiliates) continues to be entitled to exercise its PreferredA-1 Blocking Rights nor Mr. Malone (individually and with his affiliates) or his heirs continues to be entitled to exercise his Common B Blocking Rights.assets. Notwithstanding the foregoing, a Change in Control will not accelerate the payment of any “deferred compensation” (as defined under Section 409A) unless the Change in Control also qualifies as a change in control under Treasury RegulationSection 1.409A-3(i)(5).
Wiedenfels Mr. Zaslav’s employment agreement specifically excluded the WarnerMedia Transaction, but not subsequent events, from the definition of Change in Control.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Defined Terms from Mr. Wiedenfels’ Employment Agreement. Under the terms of Mr. Wiedenfels’ employment agreement, “Cause” ■"Cause” means: (i) the conviction of, or nolo contendere or guilty plea, to a felony (whether any right to appeal has been or may be exercised); (ii) conduct constituting embezzlement, material misappropriation or fraud, whether or not related to Mr. Wiedenfels’ employment with the Company; (iii) conduct constituting a financial crime, material act of dishonesty or conduct in violation of Company’s Code of Ethics;Ethics or the Company's other written policies; (iv) improper conduct substantially prejudicial to the Company’s business;business (whether financial or otherwise); (v) willful unauthorized disclosure or use of Company confidential information; (vi) material improper destruction of Company property; or (vii) willful misconduct in connection with the performance of Mr. Wiedenfels’ duties. “Cause” also includes hishim materially neglecting his duties or engaging in other conduct that breaches his employment agreement, subject to aone-time notice and cure opportunity.Under the terms of Mr. Wiedenfels’ employment agreement, “Good
■“Good Reason” means the occurrence of any of the following events without Mr. Wiedenfels’ consent: (a) a material reduction in Mr. Wiedenfels’ duties or responsibilities; (b) a material change in his work location from the New York, NY metropolitan area; (c) a material breach by us of the agreement; or (d) a change of his reporting relationship to a level below the Company’s Chief Executive Officer, Chair, or the Board.Officer. The “Good Reason” definition includes a requirement of notice and an opportunity to cure.Campbell
Defined Terms from Mr. Campbell’s Employment Agreement. Mr. Campbell’s employment agreement contains ■“Cause” generally has the same definition of “Cause” that is includedmeaning as in Mr. Wiedenfels’ employment agreement. Under ■“Good Reason” generally has the terms ofsame meaning as in Mr. Campbell’sWiedenfels' employment agreement, “Good Reason” meansbut does not include the occurrenceremoval of any of the following events withoutlegal and/or consumer products and experiences divisions from Mr. Campbell’s consent: (a) a material reduction in Mr. Campbell’sCampbell's duties or responsibilities; (b) a material change in his work locationresponsibilities. Defined Terms from the New York, NY metropolitan area; (c) a material breach by us of the agreement; or (d) a change of his reporting relationship to a level below the Company’s CEO, Chair, or the Board. The “Good Reason” definition includes a requirement of notice and an opportunity to cure.Perrette Employment Agreement. Mr. Perrette’s employment agreement containsEmployment Agreement
■“Cause” generally has the same definition of “Cause” that is includedmeaning as in Mr. Wiedenfels’ agreement. Under the terms of Mr. Perrette’s employment agreement, “Goodagreement. ■“Good Reason” means the occurrence of any of the following events without Mr. Perrette’s consent: (a) a material reduction in Mr. Perrette’s duties or responsibilities; (b) a material change in his work location from the London, U.K.Los Angeles, CA metropolitan area, except repatriation to the New York, NY metropolitan area at the end of his term of employment;area; or (c) a change of his reporting relationship to a level lower than the CEO of the Company; (d) a material breach of his agreement through the Company’s failure to make the equity awards.Company. The “Good Reason” definition includes a requirement of notice and an opportunity to cure.
Faricy
Defined Terms from the Mr. Zeiler’s Employment Agreement. Mr. Faricy’s employment agreement contains ■“Cause” generally has the same definition of “Cause” that is includedmeaning as in Mr. Wiedenfels’ agreement. Under the terms of Mr. Faricy’s employment agreement, “Goodagreement. ■"Good Reason” means the occurrence of any of the following events without Mr. Faricy’sZeiler’s consent: (a) a material reduction in Mr. Faricy’sZeiler’s duties title, or responsibilities; (b) a material change in his work location from the New York, NYLondon, U.K. metropolitan area; or (c) a material breach by us of his employmentthe agreement. The “Good Reason” definition includes a requirement of notice and an opportunity to cure. PROPOSAL 3: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
Section 14A
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Pay Versus Performance Table (2020-2022) The following table reports the compensation of our CEO and the average compensation of the Exchange Act requiresother non-CEO NEOs as reported in the Summary Compensation Table for the past three fiscal years, as well as Compensation Actually Paid ("CAP") as calculated under new SEC Pay-Versus-Performance ("PVP") disclosure requirements and certain performance measures required by the rules. The disclosure covers our three most-recent fiscal years, which will expand incrementally over the next two years to a rolling five years. Dollar amounts reported as CAP are computed in accordance with Item 402(v) of Regulation S-K, and our Board believes that stockholdersit is important to recognize that these amounts do not reflect the actual amount of compensation earned by or paid to our CEO and non-CEO NEOs during the applicable years. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO(1)(2) | Average Summary Compensation Table Total for Non-CEO NEOs(2)(3) | Average Compensation Actually Paid to Non-CEO NEOs(4) | | Value of Fixed Initial $100 Investment on
December 31, 2019 | Net Income (in millions)(6) | Adjusted EBITDA (in millions)(7) | | WBD | Peer Group(5) | | 2022 | $ | 39,288,458 | | $ | (40,926,334) | | $ | 12,897,862 | | $ | 8,377,049 | | | $ | 29 | | $ | 94 | | $ | (7,297) | | $ | 7,718 | | | 2021 | $ | 246,573,481 | | $ | 100,779,562 | | $ | 10,960,057 | | $ | 8,862,525 | | | $ | 72 | | $ | 167 | | $ | 1,197 | | $ | 3,817 | | | 2020 | $ | 37,710,462 | | $ | 3,723,331 | | $ | 7,932,449 | | $ | 5,441,613 | | | $ | 92 | | $ | 132 | | $ | 1,355 | | $ | 4,196 | |
(1)In calculating CAP to the CEO for each year in the table, the following amounts in the table below were deducted from and added to the Summary Compensation Table totals reported in the PVP table above: CEO — Summary Compensation Table Total to CAP Reconciliation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fiscal
Year | Summary
Compensation
Total | Summary Compensation
Table Total for
Stock Awards | Summary
Compensation
Table Total for
Option Awards | Awards
Granted
During the
Year and
Outstanding
and
Unvested as
of FYE: Fair Value as
of FYE | Awards
Granted in
Prior Years
Outstanding
and Unvested
as of FYE: Change in
Fair Value as
of FYE (from
Prior FYE) | Awards
Granted
During the
FY that
Vested
during the
FY: Fair Value
as of the
Vesting
Date | Awards
Granted in
Prior FYs
that Vested
During the
FY: Change in
Fair Value
as of the
Vesting
Date (from
Prior FYE) | Awards
that Fail to
Meet the
Applicable
Vesting
Conditions
During the
FY: Fair Value
as of FYE | Dollar Value of
any Dividends
or other
Earnings paid
on Awards
(not otherwise
included in total
compensation) | Total
Compensation
Actually Paid | | 2022 | 39,288,458 | | (12,025,683) | | (1,448,138) | | 4,309,229 | | (80,586,333) | | — | | 9,536,133 | | — | | — | | (40,926,334) | | | 2021 | 246,573,481 | | (13,165,436) | | (202,889,764) | | 94,913,135 | | (38,068,152) | | — | | 13,416,298 | | — | | — | | 100,779,562 | | | 2020 | 37,710,462 | | (12,501,020) | | — | | 14,636,408 | | (28,358,989) | | — | | (7,763,530) | | — | | — | | 3,723,331 | |
Our CEO does not have any accumulated benefit under any defined benefit or actuarial pension plans; accordingly, we did not deduct or add any amounts with respect to defined benefit pension plans in calculating CAP to the CEO. (2) In calculating CAP, the following assumptions were made with respect to adjustments: (a) for PRSUs and RSUs awarded to the CEO and non-CEO NEOs, which included grants made from 2017 through 2022, the awards were re-valued based on the applicable WBD or DISCA stock price on each of December 30, 2020 ($30.09), December 31, 2021 ($23.54) and December 31, 2022 ($9.48); and (b) for stock options awarded to the CEO and non-CEO NEOs, which included grants made from 2016 through 2022, the awards were re-valued as of December 31, 2020, December 31, 2021 and December 31, 2022 using the Black-Scholes option-pricing model. The assumptions used for each valuation date included stock price, risk-free rate, stock price volatility and expected life as determined in accordance with FASB ASC Topic 718. (3) The non-CEO NEOs used for purposes of calculating the average shown for 2022 were: Gunnar Wiedenfels, Chief Financial Officer, Bruce Campbell, Chief Revenue and Strategy Officer, JB Perrette, President and CEO, Global Streaming and Games, and Gerhard Zeiler, President, International. The non-CEO NEOs used for purposes of calculating the average shown for 2021 and 2020 were: Gunnar Wiedenfels, Chief Financial Officer, Bruce Campbell, Chief Development, Distribution and Legal Officer, JB Perrette, President and CEO, Discovery International, and David Leavy, Chief Corporate Operating Officer. (4) In calculating Average CAP to non-CEO NEOs for each year in the table, the following amounts in the table below were deducted from and added to the Summary Compensation Table totals reported in the PVP table above:
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Average Non–CEO NEOs — Summary Compensation Table Total to CAP Reconciliation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fiscal
Year | Summary
Compensation
Total | Summary Compensation
Table Total for
Stock Awards | Summary
Compensation
Table Total for
Option Awards | Awards
Granted
During the
Year and
Outstanding
and
Unvested as
of FYE: Fair Value as
of FYE | Awards
Granted in
Prior Years
Outstanding
and Unvested
as of FYE: Change in
Fair Value as
of FYE (from
Prior FYE) | Awards
Granted
During the
FY that
Vested
during the
FY: Fair Value
as of the
Vesting
Date | Awards
Granted in
Prior FYs
that Vested
During the
FY: Change in
Fair Value
as of the
Vesting
Date (from
Prior FYE) | Awards
that Fail to
Meet the
Applicable
Vesting
Conditions
During the
FY: Fair Value
as of FYE | Dollar Value of
any Dividends
or other
Earnings paid
on Awards
(not otherwise
included in total
compensation) | Total
Compensation
Actually Paid | | 2022 | 12,897,862 | | (6,164,747) | | — | | 2,577,204 | | (1,326,381) | | — | | 393,111 | | — | | — | | 8,377,049 | | | 2021 | 10,960,057 | | (1,919,984) | | (2,442,832) | | 495,534 | | (824,947) | | — | | 2,594,697 | | — | | — | | 8,862,525 | | | 2020 | 7,932,449 | | (1,588,691) | | (1,322,873) | | 1,389,376 | | (374,464) | | — | | (594,184) | | — | | — | | 5,441,613 | |
Our non-CEO NEOs do not have any accumulated benefit under any defined benefit or actuarial pension plans; accordingly, we did not deduct or add any amounts with respect to defined benefit pension plans in calculating CAP to the non-CEO NEOs. (5) Peer group used for purposes of this column is the S&P 500 Media and Entertainment Index. (6) Net Income is as reported in our Annual Report on Form 10-K for the applicable year. (7) Our Company-selected measure is Adjusted EBITDA, which is a non-GAAP financial measure. See page 52 in our Compensation Discussion and Analysis under the heading “2022 Financial Metrics and Adjustments” for a definition of Adjusted EBITDA. CEO and Average Non-CEO NEO CAP Pay-Versus-Performance The following graphs illustrate the relationship between the CAP of our CEO and average non-CEO NEO ("Average NEO") and WBD's TSR, Net Income and Adjusted EBITDA performance over the three-year period from 2020 to 2022. While not graphically presented, our three-year TSR performance versus that of our selected peer group, the S&P 500 Media and Entertainment Index, overall followed a similar trajectory. The volatility in our stock price over the three-year period can be givenattributed to the opportunity to cast an advisory(non-binding) vote on executive compensation. This vote, commonly known as a “Say on Pay” vote, gives stockholders the opportunity to vote for or against named executive officer (“NEO”) compensation during a given fiscal year. Stockholders’ votes are not intended to address any specific itemimpact of the WarnerMedia Transaction, as well as other separate factors that were beyond our control. While the Committee believes that driving stock price appreciation and TSR performance are important objectives for our CEO and non-CEO NEOs, it also believes that achieving other financial objectives, such as Adjusted EBITDA and Adjusted Free Cash Flow, as well as achieving other strategic objectives, such as growing our DTC business and closing and integrating the WarnerMedia Transaction, are equally important and it has sought to align our executive compensation with these objectives, as further discussed in the CD&A in this proxy statement. The three-year compensation history of the CEO and the average NEO shows that the disclosed CAP generally aligns with WBD's TSR, Net Income and Adjusted EBITDA performance. The exception to this was the CEO's CAP in 2021 which includes the option grant made to Mr. Zaslav in connection with the signing of the WarnerMedia Transaction and his entry into a new employment agreement. All of the 2021 options awarded to Mr. Zaslav have a strike price that is higher than the current trading price of WBD common stock. If the 2021 option grant were excluded, Mr. Zaslav's CAP in 2021 would have been substantially lower and better aligned with TSR, Net Income, and Adjusted EBITDA performance for the three-year period. * TSR value based on $100 investment in WBD (Discovery, Inc. Series A common stock) as of December 31, 2019.
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Overall, the Committee believes the executive compensation program but ratherstrikes an appropriate balance between incentivizing our executives based on performance, as well as utilizing market competitive pay practices. This is also evidenced by the performance metrics the Committee selected to addresslink pay with performance as described in the section below. See our overall approach to executive compensation as disclosed"Compensation Discussion and Analysis" in this proxy statement for additional information regarding WBD's pay-for-performance philosophy. Company Performance Measures Our executive compensation programs are designed to implement our pay-for-performance compensation philosophy. We strive to ensure a strong alignment between the interests of our stockholders and those of our executives. To align pay and performance, the Committee seeks to utilize metrics that will incentivize our executives to execute against our strategic priorities and deliver long-term sustainable growth. The metrics listed below are the performance measures the Committee deemed as most important for purposes of determining 2022 compensation as further described in our "Compensation Discussion and Analysis" in this proxy statement. These performance measures were the financial metrics used in our 2022 cash bonus program for the CEO and CFO and the 2022 ICP. They were also the financial metrics used for the CEO's 2022 PRSU awards. | | | 2022 Most Important Performance Measures(1) | | Adjusted EBITDA | | Net Revenue | | Adjusted Free Cash Flow | | Year-End Paid DTC Subscribers |
(1)See “2022 Financial Metrics and Adjustments” beginning on page 52 for more information on Adjusted EBITDA, Net Revenue, Adjusted Free Cash Flow and Year-End Paid DTC Subscribers.
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CEO Pay Ratio Disclosure Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to provide the ratio of the annual total compensation of our CEO to the annual total compensation of the median-paid employee of the Company (“Median Employee”). Our 2022 CEO to Median Employee pay ratio was calculated in accordance with Item 402(u) of Regulation S-K, and represents a reasonable estimate. For 2022, we re-identified our Median Employee and adjusted our methodology due to the SEC’s rules.change in our employee population as a result of our completion of the WarnerMedia Transaction on April 8, 2022. To determine our employee population, we defined “employee” as any full-time, part-time or temporary individual employed and paid by us or any of our consolidated subsidiaries as of December 31, 2022. We did not include freelance workers, temporary individuals employed and paid by a third party or independent contractors. To identify the Median Employee from our employee population, we used base salary amounts as of December 31, 2022 as our consistently applied compensation measure. For employees paid in foreign currencies, we converted their base salary into U.S. dollar amounts using an exchange rate as of December 31, 2022. We then sorted the employees (excluding our CEO) by their U.S. dollar equivalent base salary amounts and thereby identified our Median Employee. Using the same methodology we used for our NEOs (including our CEO) as set forth in the 2022 Summary Compensation Table resulted in our Median Employee having annual total compensation of $172,735. The 2022 annual total compensation for our CEO as disclosed in the 2022 Summary Compensation Table was $39,288,458. Therefore, the ratio of our CEO’s annual total compensation to the Median Employee’s annual total compensation was 227 to 1.
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| | | | | | | | | | | | | Proposal 3 Advisory Vote to Approve Named Executive Officer Compensation ("Say on Pay") | | | The Warner Bros. Discovery, Inc. Board of Directors recommends a vote “FOR” this Proposal 3 and the following resolution: "RESOLVED, that the stockholders of Warner Bros. Discovery, Inc., approve, on an advisory basis, the compensation paid to Warner Bros. Discovery, Inc.’s named executive officers, as disclosed in this proxy statement pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the executive compensation tables and related narrative discussion." |
As described in detail in the Compensation Discussion and Analysis beginning on page 2743 of this proxy statement, our executive compensation program is designed to attract, retain, motivate and reward talented executives who can continue to grow our business and engage audiences around the world. Under our program, our NEOs are rewarded for individual and collective contributions to Discovery’sWBD’s success consistent with our “pay-for-performance” “pay-for-performance” orientation. Furthermore, our executive compensation program is aligned with the nature and dynamics of our business, which focuses management on achieving our annual and long-term business strategies and objectives. The Compensation Committee (“Committee”) of the Board regularly reviews our executive compensation program to ensure that it achieves our desired goals of emphasizing long-term value creation and aligning the interests of management and stockholders through the use of, among other things, equity-based awards. As we describe in the Compensation Discussion and Analysis beginning on page 2743 of this proxy statement, our executive compensation program embodies a pay-for-performance philosophy that supports our business strategy and aligns the interests of our executives with our stockholders. At the same time, we believe our program does not encourage management to take excessive risks. Please read the entire Compensation Discussion and Analysis beginning on page 2743 of this proxy statement for additional details about our executive compensation program, including detailed information about the 20192022 compensation paid to our NEOs. The Board is asking stockholders to support our executive compensation program, as described in this proxy statement. As an advisory vote, this proposal is not binding. The outcome of this advisory vote does not overrule any decision by the Company, the Board or the Committee, or create or imply any change to, or additional fiduciary duties for, the Company, the Board or the Committee. However, the Committee and our Board value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future executive compensation decisions. Under the rules of the New York Stock Exchange, brokers are prohibited from giving proxies to vote on executive compensation matters unless the beneficial owner of such shares has given voting instructions on the matter. This means that if
If your broker is the record holder of your shares, you must give voting instructions to your broker with respect to this Proposal 3 if you want your broker to vote your shares on this matter.
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| | | | | | | | | | | | | Proposal 4 Advisory Vote on the Frequency of Future "Say on Pay" Votes | | | The Warner Bros. Discovery, Inc. Board of Directors recommends a vote of "Every Year" on this Proposal 4 as the frequency at which stockholders will be provided with future advisory votes on the compensation of our Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the SEC. |
Section 14A of the Exchange Act also requires that stockholders be given the opportunity at least every six years to cast an advisory (non-binding) vote as to how frequently they want to cast a “Say on Pay” advisory vote on executive compensation. By voting on this proposal, stockholders may indicate whether they would prefer future "Say on Pay" votes to take place every one, two or three years. Discovery, Inc. held "Say on Pay" votes every three years. Stockholders last voted on this proposal at the 2017 Discovery, Inc. Annual Meeting of Stockholders, where the majority of votes cast elected to hold "Say on Pay" votes triennially. However, approximately 39% of the stockholders voted for an annual “Say on Pay” vote at that meeting. Since 2017, the feedback we received from stockholders during our engagement efforts and other interactions has indicated that our stockholders would appreciate having an opportunity to cast a "Say on Pay" advisory vote each year. Based on this stockholder feedback, the Board, upon recommendation of the Compensation Committee, is now recommending that future "Say on Pay" advisory votes be conduced every year. The Board believes that conducting a “Say on Pay” advisory vote is the most appropriate choice for WBD's stockholders and will allow stockholders to provide timely, direct input on our executive compensation program. In addition, an annual advisory “Say on Pay” vote is consistent with our goal of implementing good corporate governance practices and seeking input from, and engaging with, our stockholders. For these reasons, the Board of Directors recommends athat you vote “FOR”to hold future “Say on Pay” advisory votes EVERY YEAR. The voting choice that receives the highest number of votes cast will be the frequency selected by our stockholders for the “Say on Pay” advisory vote. Abstentions and broker non-votes will not be counted as votes on this Proposal 3proposal. This vote on frequency is advisory, and the following resolution: “RESOLVED, that the stockholders of Discovery, Inc., approve,therefore will not be binding on an advisory basis, the compensation paid to Discovery, Inc.’s named executive officers, as disclosed in this proxy statement pursuant to the Securities and Exchange Commission’s compensation disclosure rules, includingWBD, the Compensation DiscussionCommittee or the Board, and Analysis,it will not be construed as overruling any decision by the executive compensation tables and related narrative discussion.”
Company or the Board or creating or implying any change to, or additional fiduciary duties for, the Company or the Board. PROPOSAL 4: STOCKHOLDER PROPOSAL REGARDING SIMPLE MAJORITY VOTE REQUIREMENTS
If your broker is the record holder of your shares, you must give voting instructions to your broker with respect to Proposal 4 if you want your broker to vote your shares on the matter.
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| | | | | | | | | | | | | Proposal 5 Stockholder Proposal Simple Majority Vote | | | The Board recommends a vote "AGAINST" this Proposal 5. |
A certain stockholder, Kenneth Steiner, has advised the Company that they intendof his intention to present a proposal at the 20202023 Annual Meeting. Such stockholder’s submission for inclusion in the proxy statement appears between the dotted lines below, without edit by us, and the Board’s statement in opposition follows thereafter. The name and address of, and the number of shares owned by such stockholderMr. Steiner will be provided promptly upon oral or written request to the Corporate Secretary. ****************************************************************************** Proposal 45 - Simple Majority Vote RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a greater than simple majority vote be eliminated, and replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are used to block initiatives supported by most shareowners but opposed by a status quo management. This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. These votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice. The proponents of these proposals included Ray T. Chevedden and William Steiner.
Currently a 1%-minority can frustrateThis proposal topic also received overwhelming 99%-support at the 2019 Fortive annual meeting.
With simple majority vote it will of our 79%-shareholder majority in an electionwith 80% of shares casting ballots. In other words a 1 %-minority could have the powerbe less difficult to
prevent shareholders from improving adopt improvements to the governance of our company. This can be particularly
important during periods ofWarner Bros. Discovery. Simple majority vote is a win for the Board, management underperformance and/or an economic downturn.
Currently the role of shareholders is downsized because management can simply sayout-to-
lunch in response to an overwhelming 79%-vote ofand shareholders.
This proposal is especially important for Discovery shareholders due to Discovery’s litany of
poor governance practices:
Certain insider shares have10-times the voting power of other shares.
Executive pay is not subject to a shareholder vote annually.
Directors are subject to election only once in3-years.
Directors only need only vote for themselves to be elected.
Directors Paul Gould and Kenneth Lowe were rejected by 40% of shares.
Shareholders cannot act by written consent or call special meetings.
Directors can only be removed for cause which means they cannot be removed as a practical matter.
David Zaslav recived a $129 million paycheck.
Simple Majority Vote – Proposal 45******************************************************************************
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Board’s Statement in Opposition The
After careful consideration, the Board has considereddetermined that adopting this proposal would not serve to enhance the Company’s corporate governance and believes that it would not be in the best interests of the Company and itsour stockholders at this time. Our The proposal asks that the Company already applies a majority vote standardtake action to most matters submitted to a vote of stockholders, including such fundamental matters as amendment of oureliminate the supermajority voting provisions in the Company’s Second Restated Certificate of Incorporation amendment(“Certificate of our Bylaws, and merger, sale and dissolutionIncorporation”), which is a provision that was specifically negotiated with AT&T Inc.(“AT&T”) at the time of the Company. The heightened supermajority requirement is triggered only when the proposed action is a fundamental matterthat did not reach 75% Board approval. This ensures that when certain fundamental changes are proposed which, in the judgment of at least some directors, are not in the best interests of the CompanyDiscovery-WarnerMedia combination, and its stockholders, such changes will only prevailAmended and Restated Bylaws (“Bylaws”) and replace them with strong stockholder supermajority consensus.
The finite list of such fundamental matters that could trigger a supermajority vote are as follows:
Amendment, alteration or repeal of any provision of our Certificate of Incorporation
Adoption, amendment or repeal of any provision of our Bylaws
Merger or consolidation of the Company with or into any other person or any other business combination
Sale, lease or exchange of all, or substantially all, of our assets
Dissolution of the Company
The Board is familiar with the discussions regarding supermajoritysimple majority vote requirements. The Board believes that there are valid argumentsthe inclusion of certain supermajority voting provisions in favorour Certificate of Incorporation and opposed to, supermajority vote requirements that are commonly includedour Bylaws protects all stockholders in the corporate charterscontext of our capital structure and bylawsdo not serve to entrench management or the Board.
The Certificate of many publicly-traded Delaware companies. As described above, ourIncorporation Has a Limited Supermajority Vote Standard Which Sunsets in 2025 Our Certificate of Incorporation applies a majority vote standard for all matters except with respect to the removal of directors prior to the third annual meeting following the effective time of the merger between Discovery, Inc. (“Discovery”) and AT&T’s WarnerMedia business unit which occurred on April 8, 2022. A vote of two-thirds of the outstanding shares of common stock then entitled to vote will be required to remove a director at any annual or special meeting prior to the Company’s supermajority vote requirements are triggered in very limited circumstances2025 annual meeting. This provision was negotiated at arm’s-length between Discovery and AT&T as part of the merger transaction and was unanimously approved by both Boards of Directors at the time, and the Board believesdoes not believe it would be appropriate to seek to remove a provision that our stockholders have benefitted, and will continue to benefit, from havingwas specifically included as part of a transaction recently approved by both companies’ stockholders. The purpose of this provision.Other considerations favoring supermajority vote requirements:
Provides minority stockholdersstandard is to help facilitate the integration of two large complex businesses by minimizing unexpected changes to a board whose skills and qualifications were carefully considered in connection with the merger and are well-suited to overseeing a measurepivotal transition. The Certificate of protectionIncorporation applies a simple majority vote standard for all other matters, including the removal of certain takeover defenses which may otherwise serve to entrench the Board or the management in the long term.
The Supermajority Vote Standard in Our Bylaws Protects the Interests of All Our Stockholders Our Bylaws require a supermajority vote of two-thirds of the total voting power of the then-outstanding shares of common stock to adopt, amend or repeal any provision of our Bylaws. Retaining a supermajority vote requirement on key corporate matters helps to protect stockholders against self-interested actionstransactions proposed by one or more large stockholders Encourages who may seek to advance their interests over the interests of the Company’s other stockholders. The Board also believes the supermajority vote requirement in our Bylaws will encourage large stockholders or potential acquirers of the Company to negotiate with the Board with respect to business transactions or certain corporate governance matters
Deters and will deter hostile takeovers of the Company that may not be in the best interests of the Company and its stockholders.
If the proposal were implemented, the Bylaws could conceivably be amended by less than half of our outstanding stockholders in situations of low voter turnout or significant abstentions. For example, if the simple majority voting standard were adopted as proposed and only 50.1% of the shares outstanding are present at an annual or special meeting, stockholders constituting as little as 25.1% of the outstanding voting power—or as few as four of our largest stockholders—could approve significant corporate changes. Rather than protecting stockholders, such a provision allows a minority of the outstanding shares to change the bylaws that apply to all stockholders; the Board does not believe this is an appropriate allocation of power to a group representing less than a majority of our outstanding shares. While a majority of outstanding shares threshold might address this concern to some extent, the Board believes that the current supermajority voting standard is preferable because it encourages our large stockholders to take into account the interests of all of the Company’s stockholders. The
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Our Highly Qualified and Independent Board Ensures Accountability and Effective Corporate Governance Our Board of highly qualified independent directors is committed to goodensuring sound corporate governance practices and effective Board oversight and accountability. The Board believes that the following governance policies and practices address the proponent’s concerns regarding potential management and Board entrenchment: ■the Board is comprised of highly qualified and experienced directors who have demonstrated business acumen and an ability to exercise sound judgment; ■12 out of 13 members of our Board are independent directors; ■only independent directors serve on our standing Board committees; ■our independent directors meet at least twice a year in executive session; ■all directors have unimpeded access to senior management and, as necessary and appropriate, independent advisors; and ■our Board and its committees conduct periodic self-evaluations to determine whether they are functioning effectively. Consistent with its current practice, the Board will continue to evaluate the future implementation of appropriate corporate governance changes. For the reasons discussed above, the Board does not believe adoption of the proposal is in the best interests of the Company and its stockholders at this submittedtime. The Board recommends a vote “AGAINST” this Proposal 5.
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| | | | | | | | | | | | | Proposal 6 Stockholder Proposal Political Disclosure | | | The Board recommends a vote "AGAINST" this Proposal 6. |
A stockholder, the New York State Common Retirement Fund, has advised the Company of its intention to present a proposal contains certain assertionsat the 2023 Annual Meeting. Such stockholder’s submission for inclusion in the proxy statement appears between the dotted lines below, without edit by us, and opinionsthe Board’s statement in opposition follows thereafter. For the avoidance of doubt, the link referenced in the supporting statement shall not be considered to be a part of or incorporated by reference into this proxy statement. The address and the number of shares owned by the New York State Common Retirement Fund will be provided promptly upon oral or written request to the Corporate Secretary. ****************************************************************************** Warner Bros. Discovery, Inc. Political Disclosure Shareholder Proposal Resolved, that the shareholders of Warner Bros. Discovery, Inc. (“WBD” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s: 1Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum. 2Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including: aThe identity of the recipient as well as the amount paid to each; and bThe title(s) of the person(s) in the Company responsible for decision-making. The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending. Supporting Statement As shareholders of WBD, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates. A company’s reputation and value can be adversely impacted by spending that is conducted through third parties. The risk is especially serious when giving to trade associations, Super PACs, 527 committees, and “social welfare” organizations – groups that routinely contribute to or spend on behalf of candidates and political causes that a company might not otherwise wish to support.
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When the Conference Board released its 2021 “Under a Microscope” report1 it detailed these risks, and recommended the process suggested in this proposal. The organization also said, “a new era of stakeholder scrutiny, social media, and political polarization has propelled corporate political activity—and the risks that come with it—into the spotlight. Political activity can pose increasingly significant risks for companies, including the perception that political contributions—and other forms of activity—are at odds with core company values.” This proposal asks WBD to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations which may be disputedused for electoral purposes–and are otherwise undisclosed. This would bring our Company in line with a growing number of leading companies, including Electronic Arts Inc. and The Walt Disney Company, which present this information on their websites. Without knowing the recipients of our company’s political dollars, we cannot sufficiently assess whether our company’s election-related spending aligns or countered. For example, executive pay is upconflicts with its policies on climate change and sustainability, or other areas of concern. We urge your support for a vote to the stockholders this year and every 3 years,critical governance reform. ****************************************************************************** Board’s Statement in full compliance with SEC rules. Opposition The Board values opinionshas considered this proposal and proposals from our stockholders and have in the past (including last year) implemented stockholder requestsbelieves that the Board believes toit would not be in the best interests of the Company and its stockholders. The Company has engaged constructively with the proponent over the past several months regarding the proposal and has committed to substantial disclosures in line with the proposal that are detailed below. The Company is committed to being transparent and accountable when participating in the political process. In view of the Company’s robust oversight practices and the disclosures that the Company has committed to undertake, the Board believes that any additional disclosures that may be required by the proposal are unnecessary, an imprudent use of corporate resources and would not provide meaningful incremental value to our stockholders. The Discovery, Inc.Company Has Committed to Substantial Disclosures Which Address the Proponent’s Concerns Following receipt of the proposal, the Company engaged with the proponent in good faith over several months to better understand the proponent’s concerns regarding transparency and accountability in corporate political spending. Following these discussions, the Company pledged to undertake the following actions to enhance the information available to stockholders and the general public regarding the Company’s political contributions, policies and procedures. The Company believes these actions fully address the transparency and accountability concerns noted by the proponent. 1Enhanced Policy and Procedures Disclosures. The Company will publicly disclose its policy position related to corporate federal contributions and direct independent expenditures, including material details with respect to such expenditures, when incurred. The Company will also publicly disclose its policy and processes for approving political contributions, including disclosures regarding oversight of such contributions by senior management and our Nominating and Corporate Governance Committee as well as the dollar threshold for political contributions that require approval by senior management. Our publicly disclosed policies will be annually reviewed by our Nominating and Corporate Governance Committee, which will recommend appropriate revisions and enhancements to ensure stockholders receive timely, complete and useful information regarding our political activities and contributions. The disclosures will be posted on our website no later than March 31, 2023. 2State and Local Political Contributions. The Company will publicly disclose its state and local political contributions, and include relevant details about the contributions, including, but not limited to, the candidate name, referendum or ballot initiative, jurisdiction, and dollar amount. The Company will make this information available on its website for contributions made from May 1, 2022 through December 31, 2022 by June 30, 2023. Going forward, the Company will post on its website the prior calendar year’s contributions by March of the following year (i.e., contributions made from January 1, 2023 through December 31, 2023 will be posted by March 31, 2024). 1https://www.conference-board.org/topics/corporate-political-activity/Under-a-Microscope-A-New-Era-of-Scrutiny-for-Corporate-Political-Activity
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3Organizations. The Company will publicly disclose its contributions to 527 organizations and include relevant details about the contributions, including, but not limited to, the organization name and dollar amount. The Company will post this information on its website for contributions made from May 1, 2022 through December 31, 2022 by June 30, 2023. Going forward, the Company will post on its website the prior calendar year’s contributions by March of the following year (i.e., contributions made from January 1, 2023 through December 31, 2023 will be posted by March 31, 2024). 4Trade Associations. The Company will publicly disclose on its website the names of trade associations of which it is a member where such annual dues are $50,000 or more, starting with the current calendar year memberships. The Company will additionally disclose the non-tax-deductible portion of the dues for those named trade associations that have been designated for lobbying expenditures by the trade association, starting with the 2024 calendar year. Disclosures related to trade association memberships will occur annually in March, with the first disclosure to be made in March of 2024 for the 2023 data. In addition to the disclosures described above, the Company is fully committed to complying with all applicable federal, state and local campaign finance and lobbying laws, including laws requiring public disclosure of political contributions and lobbying expenses to state and federal agencies. The Company shares the proponent’s interest in transparency and accountability in corporate electoral spending and believes the disclosures it has committed to undertake are sufficient and appropriate to address these concerns. Our Highly Qualified and Independent Board Ensures Transparency and Accountability Our Board of Directorshighly qualified independent directors is committed to ensuring transparency and accountability with respect to our political activities and contributions. As described above, members of our senior management and our Nominating and Corporate Governance Committee oversee these matters, including periodically reviewing our policies and procedures to ensure alignment with best practices. In addition, our Board believes that the following robust governance policies and practices further enhance oversight of and accountability over the matters raised in the proposal: ■the Board is comprised of highly-qualified and experienced directors who have demonstrated business acumen and an ability to exercise sound judgment; ■12 out of 13 members of our Board are independent directors; ■only independent directors serve on our standing Board committees; ■our independent directors meet at least twice a year in executive session; ■all directors have unimpeded access to senior management and, as necessary and appropriate, independent advisors; and ■our Board and its committees conduct periodic self-evaluations to determine whether they are functioning effectively. For the reasons discussed above, the Board does not believe adoption of the proposal is in the best interests of the Company and its stockholders. The Board recommends a vote “AGAINST” this Proposal 4.6. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
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Securities Authorized for Issuance under Equity Compensation Plans The following table sets forth information, as of December 31, 2019,2022, regarding our securities authorized for issuance pursuant to equity compensation plans. Pursuant to these plans, we may issue common stock or stock options, restricted stock, RSUs, PRSUs, SARs, or other rights to acquire shares of our common stock from time to time. | | | | | | | | | | | | | Plan Category | | Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
(a) | | | Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
(b) | | | Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c) | | Equity compensation plans approved by security holders: | | | | | | | | | | | | | Discovery Communications, Inc. 2013 Incentive Plan: | | | | | | | | | | | | | Series A common stock | | | 28,426,455 | (1)(2) | | $ | 29.29 | (3) | | | 51,624,445 | (4)(5) | Series B common stock | | | — | | | | — | | | | — | | Series C common stock | | | 2,013,357 | (1)(6) | | $ | 23.17 | (3) | | | — | | Discovery Communications, Inc. 2005 Incentive Plan (As Amended and Restated Effective September 16, 2008):(7)(8) | | | | | | | | | | | | | Series A common stock | | | 251,362 | (1)(2) | | $ | 37.94 | (3) | | | — | | Series B common stock | | | — | | | | — | | | | — | | Series C common stock | | | 271,268 | (1)(6) | | $ | 36.80 | (3) | | | — | | Discovery Communications, Inc. 2005Non-Employee Director Incentive Plan (As Amended and Restated):(7) | | | | | | | | | | | | | Series A common stock | | | 263,912 | (9) | | $ | 38.54 | (10) | | | 9,163,112 | (4) | Series B common stock | | | — | | | | — | | | | — | | Series C common stock | | | 64,440 | (9) | | $ | 37.39 | (10) | | | — | | Discovery Employee Stock Purchase Plan | | | | | | | | | | | | | Series A common stock | | | — | | | | — | | | | 8,646,122 | | Equity compensation plans not approved by security holders: | | | — | | | | — | | | | — | | Total | | | 31,290,796 | | | $ | 29.13 | | | | 69,433,679 | |
| | | | | | | | | | | | | | | | | | | | | | Plan Category | Number of Securities
to be Issued
Upon Exercise of
Outstanding Options,
Warrants and Rights
(a) | Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b) | Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in
Column (a))
(c) | Equity compensation plans approved by
security holders: | | | | | Warner Bros. Discovery, Inc.
Stock Incentive Plan | | | | | | | | Common stock | 5,257,733 | | (1) | — | |
| 159,529,191 | | (2) | Warner Bros. Discovery, Inc.
2013 Incentive Plan
(As Amended and Restated) | | | | | | | | Common stock | 56,867,736 | | (1) | $34.95 | | (3) | 4,449,675 | | (2) | Warner Bros. Discovery, Inc. 2005 Non-Employee Director Incentive Plan
(As Amended and Restated) | | | | | | | | Common stock | 251,498 | | (4) | — | | | 6,752,649 | | (2) | Warner Bros. Discovery, Inc.
2011 Employee Stock Purchase Plan
(As Amended) | | | | | | | | Common stock | — | | | — | | | 7,662,235 | | | | Equity compensation plans not approved by security holders: | | | | | | | Warner Bros. Discovery, Inc. Non-Employee Directors Deferral Plan(5) | | | | | | | | Common stock | — | | | — | | | 2,500,000 | | | | TOTAL | 62,376,967 | | | $31.87 | | | 180,893,750 | | |
(1)Includes RSUs and PRSUs. (2)Each plan permits the issuance of stock options, warrants and rights in addition to other forms of equity-based awards to acquire shares of our common stock, subject to a single aggregate limit per plan. (3)The determination of the weighted average exercise price of outstanding stock options, warrants and rights excludes RSUs and PRSUs. (4)Includes unvested RSUs and vested RSUs as to which settlement has been deferred. (5)Please see the discussion of the Warner Bros. Discovery, Inc. Non-Employee Directors Deferral Plan on page 37 for additional information. (1) | Includes RSUs and PRSUs.
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(2)88 | Includes shares of common stock related to SARs that will be net settled through the issuance of our Series A common stock. The number of shares of common stock issued to settle such SARs is determined at the time of exercise based on the amount by which the price of our Series A common stock at the time of exercise exceeds the grant price divided by the price of our Series A common stock at the time of exercise. The number of shares of our Series A common stock was estimated using the closing market price of our Series A common stock on December 31, 2019, which was $32.74.
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(3) | The determination of the weighted average exercise price of outstanding stock options, warrants and rights excludes RSUs and PRSUs.
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(4) | Each plan permits the issuance of stock options, warrants and rights in addition to other forms of equity-based awards to acquire shares of our Series A common stock, Series B common stock, or Series C common stock, subject to a single aggregate limit per plan.
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(5) | Includes securities reserved for outstanding SARs that will be settled through cash payments. Pursuant to the terms of the plan, such securities are not available for future issuance until the SARs are settled through a cash payment, or otherwise forfeited or cancelled.
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(6) | Includes shares of common stock related to SARs that will be net settled through the issuance of our Series C common stock. The number of shares of common stock issued to settle such SARs is determined at the time of exercise based on the amount by which the price of our Series C common stock at the time of exercise exceeds the grant price divided by the price of our Series C common stock at the time of exercise. The number of shares of our Series C common stock was estimated using the closing market price of our Series C common stock on December 31, 2019, which was $30.49.
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(7)Proxy Statement Summary | We assumed this equity compensation plan in connection with the transaction in which we became a public company, which was completed in September 2008 (the “Transaction”). Because the Transaction provided for the exchange of securities between us and Discovery Holding Company, which is the predecessor entity to the Company, this plan effectively has been approved by our security holders.
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(8) | The Discovery Communications, Inc. 2013 Incentive Plan replaced the Discovery Communications, Inc. 2005 Incentive Plan and Discovery no longer has the ability to make further grants under the 2005 Incentive Plan.
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(9)Proposal 1 | Includes unvested RSUs and vested RSUs as to which settlement has been deferred.
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(10) | The determination of the weighted average exercise price of outstanding stock options, warrants and rights excludes RSUs.
Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Stock Ownership Security Ownership of Certain Beneficial Owners The following table sets forth information, to the extent known by Discoveryus or ascertainable from public filings, concerning the beneficial ownership of each person or entity, other than certain of Discovery’sour directors and executive officers whose ownership information follows, who owns more than five percent of the outstanding shares of each class of our common stock and preferred stock as of AprilMarch 13, 2020.2023. The Percent of Class shown below is based upon 160,019,7172,435,599,994 shares of Series Aour common stock, 6,512,378 shares of Series B common stock, 340,161,506 shares of Series C common stock, 7,852,582 and 4/9th shares of SeriesA-1 preferred stock and 4,881,390 and 1/2 shares of SeriesC-1 preferred stock outstanding as of
March 13, 2023. | | | | | | | | | | | | | Name and Address of Beneficial Owner | Amount
and Nature
of Beneficial
Ownership | Percent of
Class (%) | | Advance/Newhouse Programming Partnership | 198,175,592 | | (1) | 8.1% | | One World Trade Center | | | | | New York, New York 10007 | | | | | BlackRock, Inc. | 164,243,555 | | (2) | 6.7% | 55 East 52nd Street | | | | | New York, NY 10055 | | | | | The Vanguard Group, Inc. | 213,074,622 | | (3) | 8.8% | | 100 Vanguard Boulevard | | | | | Malvern, PA 19355 | | | |
(1)The number of shares is based on a Schedule 13D jointly filed on April 13, 2020.The Voting Power shown12, 2022 on behalf of Advance/Newhouse Programming Partnership (“ANPP”), Advance/ Newhouse Partnership (“ANP”), Newhouse Broadcasting Corporation (“NBCo”), and Advance Publications, Inc. (“API”). ANPP owns directly 194,023,290 shares and ANP owns directly 4,152,302 shares. NBCo beneficially owns such shares indirectly through its 65% interest in ANPP and 61.24% interest in ANP, and API beneficially owns such shares indirectly through its 35% interest in ANPP and 38.76% interest in ANP. API and NBCo may be deemed to beneficially own the table below reflectsshares due to their ownership and control of ANPP and ANP. Each reporting person disclaims beneficial ownership of the beneficial owner’s voting power to elect common stock directors and preferred stock directors (as applicable) with respect to applicable class of stock held by such beneficial owner. The preferred stock directors are elected by the holders of SeriesA-1 preferred stock. The common stock directors are elected by the holders of Series A common stock and the holders of Series B common stock. Shares of Series C common stock and shares of SeriesC-1 preferred stock have no voting rights except to the extent required by law. On all matters other than the electionof its pecuniary interest. The board of directors of API makes all voting and investment decisions with respect to the holdersshares. The members of SeriesA-1 preferred stockthe board of directors of API are entitledSamuel I. Newhouse, III, Steven O. Newhouse, Michael A. Newhouse, Victor F. Ganzi, and Thomas S. Summer. Each of Samuel I. Newhouse, III, Steven O. Newhouse, Michael A. Newhouse, Victor F. Ganzi, and Thomas S. Summer disclaims beneficial ownership of the shares.
(2)The number of shares is based on a Schedule 13G filed February 1, 2023 by BlackRock Inc., a parent holding company, on behalf of the subsidiaries listed in Exhibit A of its filing, none of which beneficially owns five percent or greater of our common stock. BlackRock, Inc. is deemed to vote, on anas-converted basis, withbe the holdersbeneficial owner of Series A164,243,555 shares of our common stock as a result of acting as a parent holding company. (3)The number of shares is based on Amendment No. 13 to Schedule 13G filed February 9, 2023 by The Vanguard Group, Inc. (“Vanguard”). Vanguard is deemed to be the beneficial owner of 213,074,622 shares of our common stock as a result of acting as investment adviser.
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Director and Series B common stock; On such matters, therefore,Executive Officer Stock Ownership Requirements We require that all directors and executive officers maintain the holderssignificant stock ownership levels shown below, in order to align their interests with those of our stockholders. | | | | | | | | | | 6x | 2x | 5x | base salary for the CEO | base salary for other named executive officers | cash component of annual retainer for non-employee directors |
Executive officers, including the CEO, are required to attain these stock ownership levels within five years of assuming their leadership roles, and directors are required to do so within five years of joining the Board. The CEO is also required to hold 1,500,000 shares of common stock will haveduring the term of his employment agreement. To determine whether a lower voting powerdirector or executive officer meets the required ownership level, shares of our stock beneficially owned by the covered executive, as well as unvested awards of PRSUs and RSUs, but not shares underlying unvested or unexercised stock options, are counted for purposes of meeting the stock holding target. Once a director or executive meets the target, they are expected to maintain holdings at the target for as long as he or she remains a Board member or in a role that is identified as a covered executive under the policy. The Compensation Committee and the Board may consider failure to meet the requirements of the policy in making compensation decisions for a covered executive and may take any other action appropriate to support the intent of the policy, including requiring an executive or director to retain a percentage thanof shares pursuant to stock option exercises or vesting events in future years. Each of the percentage showndirectors and named executive officers is in compliance with the Voting Power column below. | | | | | | | | | | | | | | | Name and Address of Beneficial Owner | | Title of Class | | Amount and
Nature of Beneficial
Ownership | | | Percent of
Class
(%) | | | Voting
Power
(%) | | Advance/Newhouse1 One World Trade Center New York, NY 10007 | | Series A common stock | | | 70,673,242 | 2 | | | 30.6 | | | | 23.9 | | | | Series C common stock | | | 107,034,377 | 3 | | | 24.6 | | | | — | | | | SeriesA-1 preferred stock | | | 7,852,583 | | | | 100.0 | | | | 100.0 | | | | SeriesC-1 preferred stock | | | 4,881,391 | | | | 100.0 | | | | — | | | | | | | BlackRock Inc. 55 East 52nd Street New York, NY 10055 | | Series A common stock | | | 13,232,733 | 4 | | | 8.3 | | | | 5.9 | | | | Series C common stock | | | 23,841,933 | 5 | | | 7.0 | | | | — | | | | | | | | | | | | | | | | | | | | | | Clearbridge Investments, LLC 620 8th Avenue New York, NY 10018 | | Series A common stock | | | 14,703,799 | 6 | | | 9.2 | | | | 6.5 | | | | | | | FMR LLC 245 Summer Street Boston, MA 02210 | | Series A common stock | | | 12,553,428 | 7 | | | 7.8 | | | | 5.6 | | | | | | | Hotchkis and Wiley Capital Management, LLC 601 S. Figueroa Street, 39th Floor Los Angeles, CA 90017 | | Series C common stock | | | 17,420,223 | 8 | | | 5.1 | | | | — | | | | | | | State Street Corporation One Lincoln Street Boston, MA 02111 | | Series C common stock | | | 19,570,417 | 9 | | | 5.8 | | | | — | | | | | | | The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, PA 19355 | | Series A common stock | | | 19,471,926 | 10 | | | 12.2 | | | | 8.6 | | | | Series C common stock | | | 37,880,097 | 11 | | | 11.1 | | | | — | | | | | | | | | | | | | | | | |
1 | An Amendment No. 13 to Schedule 13D was jointly filed on February 19, 2020 on behalf of Advance/Newhouse, Advance/Newhouse Partnership (“ANP”), Newhouse Broadcasting Corporation (“NBCo”), Advance Publications, Inc. (“API”), Newhouse Family Holdings, L.P. (“NFH”) and Advance Long-Term Management Trust (“Advance Long-Term Trust”). NBCo beneficially owns such shares indirectly through its 65% interest in Advance/Newhouse and 61.24% interest in ANP, and each of API, NFH and Advance Long-Term Trust beneficially owns such shares indirectly through its 35% interest in Advance/Newhouse and 38.76% interest in ANP. NFH disclaims beneficial ownership of the shares of our preferred stock held by Advance/Newhouse and the shares of our common stock into which the preferred stock is convertible. Advance Long-Term Trust, is the sole general partner of NFH and also disclaims beneficial ownership of the shares of preferred stock and the shares of our common stock into which the preferred stock is convertible. The trustees of the Advance Long-Term Trust are Samuel I. Newhouse, III, Steven O. Newhouse, Michael A. Newhouse, Victor F. Ganzi, and Peter C. Gould, each of whom disclaims beneficial ownership of the shares of preferred stock held by Advance/Newhouse and the common stock into which the preferred stock is convertible.
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2 | Includes shares of Series A common stock that would be acquired upon conversion of the shares of SeriesA-1 preferred stock that are currently outstanding. Advance/Newhouse has beneficial ownership of 70,673,242 shares of Series A common stock on asas-converted basis. Each of NBCo, API, NFH and Advance Long-Term Trust beneficially owns such shares indirectly through its interest in Advance/Newhouse.
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3 | Includes shares of Series C common stock that would be acquired upon conversion of the shares of SeriesC-1 preferred stock that are currently outstanding. Advance/Newhouse has beneficial ownership of 91,889,280.86 shares of Series C common stock on asas-converted basis. ANP has beneficial ownership of 15,145,095.89 shares of Series C common stock. Each of NBCo, API, NFH and Advance Long-Term Trust beneficially owns such shares indirectly through its interest in Advance/Newhouse and ANP.
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4 | The number of shares is based on Amendment No. 9 to Schedule 13G filed February 5, 2020 by BlackRock Inc., a parent holding company, on behalf of the subsidiaries listed in Exhibit A of its filing, none of which beneficially owns five percent or greater of our Series A common stock. BlackRock Inc. is deemed to be the beneficial owner of 13,232,733 shares of our Series A common stock as a result of acting as a parent holding company.
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5 | The number of shares is based on Amendment No. 5 to Schedule 13G filed February 5, 2020 by BlackRock Inc., a parent holding company on behalf of the subsidiaries listed in Exhibit A of its filing, none of which beneficially owns five percent or greater of our Series C common stock. BlackRock Inc. is deemed to be beneficial owner of 23,841,933 shares of our Series C common stock as a result of acting as a parent holding company.
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6 | The number of shares is based on Amendment No. 5 to Schedule 13G filed February 14, 2020 by Clearbridge Investments, LLC (“Clearbridge”). Clearbridge is deemed to be the beneficial owner of 14,703,799 shares of our Series A common stock as a result of acting as investment adviser.
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7 | The number of shares is based on Amendment No. 1 to Schedule 13G filed February 7, 2020 by FMR LLC and Abigail P. Johnson.
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8 | The number of shares is based on Amendment No. 2 to Schedule 13G filed on February 12, 2020 by Hotchkis and Wiley Capital Management, LLC.
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9 | The number of shares is based on the Schedule 13G filed February 14, 2020 by State Street Corporation, a parent holding company on behalf of the subsidiaries listed in Exhibit 1 of its filing.
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10 | The number of shares is based on Amendment No. 10 to Schedule 13G filed February 11, 2020 by The Vanguard Group, Inc. (“Vanguard”). Vanguard is deemed to be the beneficial owner of 19,471,926 shares of our Series A common stock as a result of acting as investment adviser. Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd., both wholly owned subsidiaries of Vanguard, share beneficial ownership of 250,484 and 166,246 of these Series A shares, as a result of serving as investment managers of collective trust accounts and Australian investment offerings, respectively.
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11 | The number of shares is based upon Amendment No. 6 to Schedule 13G filed February 12, 2020 by Vanguard. Vanguard is deemed to be the beneficial owner of 37,880,097 shares of our Series C common stock as a result of acting as investment adviser. Vanguard Fiduciary Trust Company and Vanguard
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| Investments Australia, Ltd., both wholly owned subsidiaries of Vanguard, share beneficial ownership of 302,043 and 296,268 of these Series C shares, as a result of serving as investment managers of collective trust accounts and Australian investment offerings, respectively. |
Security Ownership of Management The following table sets forth information, as of March 13, 2023, with respect to the beneficial ownership of our shares of common stock by each of our named executive officers, and directors, director nominees and all of our current directors and executive officers as a group of shares of Series A common stock, Series B common stock and Series C common stock.group. The percentage ownership is based upon 160,019,7172,435,599,994 shares of Series A common stock, 6,512,378 shares of Series B common stock, 340,161,506 shares of Series C common stock outstanding as of AprilMarch 13, 2020.2023. Shares of common stock issuable upon exercise or conversion of options, warrants and convertible securities that were exercisable or convertiblemay be acquired on or within 60 days of AprilMarch 13, 20202023 are deemed to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of the person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. For purposes of the following presentation, beneficial ownership of shares of Series B common stock, though convertible on aone-for-one basis into shares of Series A common stock, is reported as beneficial ownership of Series B common stock only, and not as beneficial ownership of Series A common stock, but the voting power of the Series A and Series B common stock have been aggregated.The Voting Power shown in the table below reflects the beneficial owner’s voting power to elect common stock directors. The common stock directors are elected by the holders of Series A common stock and the holders of Series B common stock. Shares of Series C common stock have no voting rights except to the extent required by law. On all matters other than the election of directors, the holders of SeriesA-1 preferred stock are entitled to vote, on anas-converted basis, with the holders of Series A common stock and Series B common stock; On such matters, therefore, each person’s voting power will be lower than the Voting Power shown below.
The persons indicated below have sole voting power with respect to the shares owned by them, except as otherwise stated in the notes to the table. The address of each person listed below is 8403 Colesville Road, Silver Spring, Maryland 20910. | | | | | | | | | | | | | | | Name of Beneficial Owner | | Title of Class of
Common Stock | | Amount and Nature of
Beneficial Ownership1 | | | Percent of
Class
(%) | | | Voting
Power
(%) | | David M. Zaslav Chief Executive Officer, President and Director | | Series A | | | 2,445,968 | | | | 1.5 | | | | 1.1 | | | | Series C | | | 1,245,160 | | | | * | | | | | | | | | | | Gunnar Wiedenfels Chief Financial Officer | | Series A | | | 305,305 | | | | * | | | | * | | | | Series C | | | 10,000 | | | | * | | | | | | | | | | | Bruce L. Campbell Chief Development, Distribution and Legal Officer | | Series A | | | 771,215 | | | | * | | | | * | | | | Series C | | | 93,652 | | | | * | | | | | | | | | | | Jean-Briac Perrette President and CEO of Discovery International | | Series A | | | 768,219 | | | | * | | | | * | | | | Series C | | | 11,491 | | | | * | | | | | | | | | | | Peter Faricy Chief Executive Officer, GlobalDirect-to-Consumer | | Series A | | | 78,227 | | | | * | | | | * | | | | | | | | | | | | | | | | | | | | | | Robert J. Miron Director, Board Chair | | Series A | | | 30,053 | 2 | | | * | | | | * | | | | Series B | | | 56 | 2 | | | * | | | | | | | | Series C | | | 30,577 | 2 | | | * | | | | | |
| | | | | | | | | | | | | | | Name of Beneficial Owner | | Title of Class of
Common Stock | | Amount and Nature of
Beneficial Ownership1 | | | Percent of
Class
(%) | | | Voting
Power
(%) | | S. Decker Anstrom Director | | Series A | | | 9,658 | | | | * | | | | * | | | | Series C | | | 19,558 | | | | * | | | | | | | | | | | Robert R. Beck Director | | Series A | | | 51,724 | | | | * | | | | * | | | | Series B | | | 11,258 | | | | * | | �� | | | | | | Series C | | | 126,880 | | | | * | | | | | | | | | | | Robert R. Bennett Director | | Series A | | | 118,697 | 3 | | | * | | | | * | | | | Series B | | | 20 | 3 | | | * | | | | | | | | Series C | | | 203,400 | 3 | | | * | | | | | | | | | | | Paul A. Gould Director | | Series A | | | 184,786 | | | | * | | | | * | | | | Series B | | | 87,317 | | | | 1.3 | | | | | | | | Series C | | | 454,415 | | | | * | | | | | | | | | | | Kenneth W. Lowe Director | | Series A | | | 7,878 | | | | * | | | | * | | | | Series C | | | 1,688,205 | | | | * | | | | | | | | | | | John C. Malone Director | | Series A | | | 1,909,317 | 4,5 | | | 1.2 | | | | 27.9 | | | | Series B | | | 6,093,490 | 4,6 | | | 93.6 | | | | | | | | Series C | | | 12,198,521 | 4,5 | | | 3.6 | | | | | | | | | | | Steven A. Miron Director | | Series A | | | 58,886 | | | | * | | | | * | | | | Series C | | | 31,521 | | | | * | | | | | | | | | | | Daniel E. Sanchez Director | | Series A | | | 11,560 | | | | * | | | | * | | | | Series C | | | 22 | | | | * | | | | | | | | | | | Susan M. Swain Director | | Series A | | | 0 | | | | * | | | | * | | | | | | | J. David Wargo Director | | Series A | | | 13,809 | | | | * | | | | * | | | | Series C | | | 144,742 | | | | * | | | | | | | | | | | All directors and executive officers as a group (20 persons) | | Series A | | | 7,293,790 | | | | 4.5 | | | | 30.7 | | | | Series B | | | 6,192,141 | | | | 95.1 | | | | | | | | Series C | | | 16,303,831 | | | | 4.8 | | | | | |
1 | Includes beneficial ownership of shares that may be acquired upon exercise of stock options already vested or exercisable within 60 days of April 13, 2020, in the amounts below:
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| | | | | | | | | | | | Series A | | | Series C | | David M. Zaslav | | | 608,913 | | | | 0 | | Gunnar Wiedenfels | | | 267,777 | | | | 0 | | Bruce L. Campbell | | | 636,381 | | | | 52,858 | | Jean-Briac Perrette | | | 697,153 | | | | 11,491 | | Peter Faricy | | | 42,327 | | | | 0 | | Robert J. Miron | | | 7,160 | | | | 7,160 | | S. Decker Anstrom | | | 7,160 | | | | 7,160 | | Robert R. Beck | | | 7,160 | | | | 7,160 | | Robert R. Bennett | | | 7,160 | | | | 7,160 | | Paul A. Gould | | | 7,160 | | | | 7,160 | | Kenneth W. Lowe | | | 0 | | | | 485,802 | |
| | | | | | | | | | | | Series A | | | Series C | | John C. Malone | | | 7,160 | | | | 7,160 | | Steven A. Miron | | | 7,160 | | | | 7,160 | | J. David Wargo | | | 7,160 | | | | 7,160 | | All directors and executive officers as a group (20 persons) | | | 2,768,989 | | | | 632,137 | |
2 | Includes 147 shares of Series A common stock, 56 shares of Series B common stock and 609 shares of Series C common stock held in a trust account.
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3 | Includes 54,913 shares of Series A common stock, 20 shares of Series B common stock and 164,799 shares of Series C common stock owned by Hilltop Investments, LLC, which is jointly owned by Mr. Bennett and his wife.
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4 | Includes 268,337 shares of Series A common stock, 170,471 shares of Series B common stock and 1,316,424 shares of Series C common stock held by Mr. Malone’s wife, as to which shares Mr. Malone disclaims beneficial ownership.
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5 | Includes 778,591 shares of Series A common stock and 10,315,938 shares of Series C common stock which have been pledged in support of one or more lines of credit or margin accounts as of February 29, 2020.
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6 | On February 13, 2014, Mr. Malone entered into an agreement with Mr. Zaslav granting Mr. Zaslav voting and purchase rights with respect to the 5,923,019 shares of Discovery Series B common stock that Mr. Malone owns, which will be in effect for as long as Mr. Zaslav is employed as the principal executive officer of Discovery or serving on its Board. Pursuant to the agreement, Mr. Zaslav will have the right to vote the shares of Discovery Series B common stock, any time Mr. Malone is not personally voting or directing the vote of the Discovery Series B shares. Any proposals regarding the transfer of the Discovery Series B shares will require that Mr. Zaslav be first notified and that exclusive negotiation discussions be entered into to seek agreement on mutually acceptable terms for Mr. Zaslav to purchase the shares. If Mr. Zaslav or an entity he controls does not purchase the shares, Mr. Zaslav will not have any further rights under the agreement or any further rights to purchase the Discovery Series B shares.
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AVAILABILITY OF ANNUAL REPORT
We filed our Annual Report on Form10-K for the year ended December 31, 2019 with the SEC on February 27, 2020. The Annual Report on Form10-K, including all exhibits, can also be found on our website:https://corporate.discovery.com and can be downloaded free of charge. Paper copies of the Annual Report onForm 10-K may be obtained without charge, and paper copies of exhibits to the Annual Report onForm 10-K are available, but a reasonable fee per page will be charged to the requesting stockholder. Stockholders may make requests in writing to the attention of Investor Relations by mail at Discovery, Inc., 850 Third230 Park Avenue South, New York, New York 10022,10003.
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| | | | | | | | | | | | | Name of Beneficial Owner | Amount and
Nature of
Beneficial
Ownership(1) | Percent of
Class (%) | | David M. Zaslav | 14,745,656 | | (2) | * | | Chief Executive Officer, President and Director | | | | | Gunnar Wiedenfels | 621,727 | | (3) | * | | Chief Financial Officer | | | | | Bruce L. Campbell | 887,993 | | (4) | * | | Chief Revenue and Strategy Officer | | | | | Jean-Briac Perrette | 675,355 | | | * | | CEO and President, Global Streaming and Games | | | | | Gerhard Zeiler | 129,457 | | | * | | President, International | | | | | Samuel A. Di Piazza, Jr. | 45,593 | | | * | | Director, Board Chair | | | | | Robert R. Bennett | 266,355 | | (5) | * | | Director | | | | | Li Haslett Chen | 0 | | | * | | Director | | | | | Richard W. Fisher | 0 | | | * | | Director | | | | | Paul A. Gould | 717,198 | | | * | | Director | | | | | Debra A. Lee | 3,786 | | | * | | Director | | | | | John C. Malone | 19,064,364 | | (6)(7) | * | | Director | | | | | Fazal Merchant | 51,106 | | | * | | Director | | | | | Steven A. Miron | 105,179 | | | * | | Director | | | | | Steven O. Newhouse | 16,449 | | | * | | Director | | | | | Paula A. Price | 0 | | | * | | Director | | | | | Geoffrey Y. Yang | 131,312 | | | * | | Director | | | | | Kenneth W. Lowe | 1,033,996 | | (8) | * | | Director Nominee | | | | | All current directors and executive officers as a group (21 persons) | 38,107,716 | | | 1.6% |
(*) Less than one percent.
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(1)Includes shares that may be acquired within 60 days of March 13, 2023, in the amounts below: | | | | | | | Common Stock | | David M. Zaslav | 10,656,823 | | | Gunnar Wiedenfels | 348,875 | | | Bruce L. Campbell | 532,728 | | | Jean-Briac Perrette | 313,102 | | | John C. Malone | 547,189 | | | Fazal Merchant | 16,106 | | | Steven A. Miron | 16,106 | | | Steven O. Newhouse | 16,106 | | | All current directors and executive officers as a group (21 persons) | 12,941,171 | |
(2)Includes 153 shares held by telephone at (212)548-5882 (or toll-free at (877)324-5850),Mr. Zaslav's wife. (3)Includes 4,000 shares held in UTMA accounts for Mr. Wiedenfels' children, of which Mr. Wiedenfels is the custodian. (4)Includes 145,418 shares held in an LLC through a grantor retained annuity trust, of which Mr. Campbell is the settlor and trustee. (5)On January 4, 2023, Mr. Bennett notified the WBD Board of his decision to resign from the Board, effective as of April 1, 2023. Includes (i) 173,163 shares owned by Hilltop Investments, LLC, which is jointly owned by Mr. Bennett and his wife, (ii) 34,690 shares owned by Hilltop Investments III, LLC, which is jointly owned by Mr. Bennett and his wife and (iii) 1,983 shares held by trust for the benefit of Mrs. Bennett. (6)Includes (i) 1,211,353 shares held by Mr. Malone’s wife, as to which shares Mr. Malone disclaims beneficial ownership, (ii) 91,789 shares held by trusts for the benefit of Mr. Malone’s children with respect to which Mr. Malone is not the trustee, has no voting or investment power, and has a power of substitution with respect to the shares held in the trusts, as to which shares Mr. Malone disclaims beneficial ownership, (iii) 7,732,803 shares held by email at investor_relations@discovery.com.STOCKHOLDER PROPOSALS
In ordera trust, with respect to be eligible for inclusionwhich Mr. Malone is the sole trustee and (iv) 455,400 shares held by the Malone Family Land Preservation Foundation with respect to which Mr. Malone has no pecuniary interest, disclaims beneficial ownership and has voting and investment power.
(7)Includes 3,650,000 shares which have been pledged in our proxy materials for our 2021 annual meeting, any stockholder proposal must be submitted in writing by December 30, 2020. Stockholder proposals should be sent to (i) 8403 Colesville Road, Silver Spring, Maryland 20910, Attentionsupport of the Corporate Secretary at Discovery, Inc.one or (ii) CorporateSecretary@discovery.com. Our bylaws require that Discovery be given advance written noticemore lines of stockholder nominations for election to our Board andcredit or margin accounts as of other matters which stockholders wish to present for action at an annual meeting of stockholders (other than matters included in Discovery’s proxy materialsFebruary 28, 2023. (8)On January 17, 2023, in accordance with Rule14a-8 underthe procedures set forth in our Second Restated Certificate of Incorporation, Mr. Lowe was appointed to fill the vacancy created by Mr. Bennett's resignation, effective as of April 2, 2023. Delinquent Section 16 Reports Our directors and executive officers file reports with the SEC pursuant to Section 16(a) of the Exchange Act). The Corporate Secretary must receiveAct indicating the number of shares of any class of our equity securities they owned when they became a director or executive officer and, after that, any changes in their ownership of our equity securities. SEC rules require us to disclose any late filings of stock transaction reports by our directors and executive officers. Based solely on our review of such reports and written representations from the individuals required to file the reports, we believe that all filings required to be made by our reporting persons for 2022 were made on a timely basis, other than a late Form 4 filing on behalf of each of Gerhard Zeiler and Geoffrey Yang with respect to one transaction for each individual, each of which were subsequently reported within one business day of the filing due date.
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2023 Annual Meeting Information – Frequently Asked Questions 2023 Proxy Materials Q: Why am I receiving these proxy materials? A: You received these materials because you owned shares of Warner Bros. Discovery stock on March 13, 2023, the record date, and that entitles you to notice of, and to vote at, the address or email address noted above not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting, provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from such anniversary date, the Corporate Secretary must receive such notice not earlier than the 100th day prior to such annual meeting and not later than the close of business on the later of the 70th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such annual meeting is first made. Assuming that the 20212023 Annual Meeting of Stockholders is held between May 19, 2021 and August 17, 2021 (as it is expected to be), in order to comply withStockholders. This proxy statement describes the time periods set forth in Discovery’s bylaws, appropriate notice would needmatters to be providedvoted on at the meeting and provides information on those matters. The proxy materials (which include our 2022 Form 10-K) provide certain information about Warner Bros. Discovery that we must disclose to you when the Board of Directors solicits your proxy. Q: How can I get electronic access to the Corporate Secretaryproxy materials? A: Stockholders may access the 2023 proxy materials at: www.proxyvote.com. Our 2023 proxy materials are also available in the Investor Relations section of our corporate website at the address noted above no earlier than March 20, 2021ir.wbd.com. Stockholders may elect to receive future distributions of proxy materials by electronic delivery. To take advantage of this service you will need an email account and no later than April 19, 2021. If a stockholder failsaccess to provide timely noticean Internet browser. To enroll, go to www.proxyvote.com and click “Sign up for E-delivery”. Your enrollment for electronic delivery of a proposal to be presented at the 2021 Annual Meeting of Stockholders, the proxies designated by the Board will have discretionary authority to vote on any such proposal which may come before the meeting.Discovery’s bylaws also specify requirements relating to the content of the notice which stockholders must provide to the Corporate Secretary for any matter, including a stockholder nomination for director, to be properly presented at a stockholder meeting.
All stockholder proposals for inclusion in our proxy materials will be subject toremain in effect until you terminate it or for so long as the requirements of the proxy rules adopted under the Exchange Act and, as with any stockholder proposal (regardless of whether itemail address provided by you is included in our proxy materials), our restated charter, our bylaws and Delaware law.
valid. HOUSEHOLDING
Q: What is “householding”? A: To reduce the expense of delivering duplicate proxy materials to stockholders who may have more than one account holding Warner Bros. Discovery stock but sharing the same address, we have adopted a procedure approved by the SEC called “householding.” Under this procedure, certain stockholders of record who have the same address and last name, and who do not participate in electronic delivery of proxy materials, will receive only one copy of our Notice and, as applicable, any additional proxy materials that are delivered until such time as one or more of these stockholders notifies us that they want to receive separate copies. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions. If you receive a single set of proxy materials as a result of householding, and you would like to have separate copies of our Notice, annual report, or proxy statement and other materials mailed to you, please submit a request to our Corporate Secretary at the address noted above or call our Investor Relations department at (240) 662-2000, (212) 548-5882, and we will promptly send you what you have requested. However, please note that if you want to receive a paper proxy or voting instruction form or other proxy materials for purposes of this year’s annual meeting, follow the instructions included in the Notice that was sent to you. You can also contact our Investor Relations department at the telephone number above if you received multiple copies of the annual meeting materials and would prefer to receive a single copy in the future, or if you would like to opt out of householding for future mailings. SOLICITATION BY THE BOARD; EXPENSES OF SOLICITATION
Our
Voting Procedures Q: What matters will be voted on at the 2023 Annual Meeting? A: The principal business of the meeting will be the following matters: ■the election of four Class I directors; ■the ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2023; ■an advisory vote to approve our 2022 named executive officer compensation, commonly referred to as a “Say on Pay” vote; ■an advisory vote on whether future “Say on Pay” votes should be held every year, every two years, or every three years; and ■the consideration of two stockholder proposals, if properly presented at the 2023 Annual Meeting.
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We will also transact such other business as may properly be presented at the 2023 Annual Meeting of Stockholders or at any postponements or adjournments thereof. However, we are not aware of any other matters to be acted upon at the 2023 Annual Meeting of Stockholders. Q: Who is entitled to vote at the 2023 Annual Meeting? A: The close of business on March 13, 2023 was the record date for determining the holders of our common stock entitled to notice of, and to vote at, the 2023 Annual Meeting of Stockholders and any postponement or adjournment thereof. Q: How many shares can vote at the 2023 Annual Meeting and how many votes does each share have? A: As of March 13, 2022, we had outstanding 2,435,599,994 shares of common stock, with each of those shares being entitled to one vote. We do not have any other classes of stock outstanding. Q: How many shares must be present or represented at the 2023 Annual Meeting to conduct business at the meeting? A: The presence, in person or by properly executed proxy, of the holders of a majority of the total voting power of the outstanding shares of common stock entitled to vote at the 2023 Annual Meeting of Stockholders will constitute a quorum for the transaction of any business at the meeting. If a quorum is not present, the meeting will be adjourned until a quorum is obtained. Shares present virtually during the annual meeting will be considered shares represented in person at the meeting for purposes of determining the presence of a quorum. Abstentions and broker non-votes (where a broker or nominee does not exercise discretionary authority to vote on a proposal) will be treated as present for purposes of determining the presence of a quorum. Q: What vote is required for Proposal One – Election of Directors? A: The Class I directors will be elected if they receive a plurality of the outstanding shares of common stock present virtually or by proxy and entitled to vote on Proposal One; ■If you withhold your vote, it will have no effect on the election of directors; and ■Broker non-votes are not considered votes cast on this proposal and therefore will have no effect on the election of directors. Q: What vote is required for Proposal Two – Ratification of the Appointment of the Independent Registered Public Accounting Firm? A: The affirmative vote of a majority of the outstanding shares of common stock present virtually or by proxy and entitled to vote on Proposal Two is required for ratification. ■Abstentions will have the same effect as a vote “AGAINST” this proposal; and ■If you are a street name stockholder and do not vote your shares, your bank, broker or other holder of record can vote your shares at its discretion on this item. Q: What vote is required for Proposal Three – Advisory Vote to Approve Named Executive Officer Compensation ("Say on Pay")? A: For Proposal Three, stockholders are being asked to vote on a non-binding advisory vote basis on our 2022 named executive officer compensation. The affirmative vote of a majority of the outstanding shares of common stock present virtually or by proxy and entitled to vote on Proposal Three is required to approve Proposal Three. ■Abstentions will have the same effect as a vote “AGAINST” this proposal; and ■Broker non-votes are not considered votes cast on this proposal and therefore will have no effect on the outcome of Proposal Three. Q: What vote is required for Proposal Four – Advisory Vote on the Frequency of Future "Say on Pay" Votes? A: For Proposal Four, stockholders are being asked to vote on a non-binding advisory vote basis with regard to the frequency with which the advisory vote to approve named executive officer compensation is held, by selecting from the following three options: (i) a vote held every year, (ii) a vote held every two years, or (iii) a vote held every three years. Stockholders may also abstain from voting. The frequency option receiving the plurality of the outstanding shares of common stock
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
present virtually or by proxy and entitled to vote on Proposal Four will be considered for the frequency recommendation of the stockholders. ■Abstentions will have no effect on this proposal; ■Proxy cards on which more than one option is chosen will not be counted; and ■Broker non-votes are not considered votes cast on this proposal and therefore will have no effect on the outcome of Proposal Four. Q: What vote is required for Proposals Five and Six – Stockholder Proposals? A: If properly presented at the 2023 Annual Meeting of Stockholders, the affirmative vote of a majority of the outstanding shares of common stock present virtually or by proxy and entitled to vote on each of Proposals Five and Six is required to approve each of Proposals Five and Six. ■Abstentions will have the same effect as a vote “AGAINST” these proposals; and ■Broker non-votes are not considered votes cast and therefore will have no effect on the outcome of the stockholder proposals. Q: How can I vote my shares at the 2023 Annual Meeting? A: If you are a holder of common stock as of the record date, telephone and Internet voting is available 24 hours a day through 11:59 p.m. (Eastern Time) on May 7, 2023. If you are located in the United States or Canada and are a stockholder of record as of the record date, you can vote your shares by calling toll-free 1-800-690-6903. Whether you are a stockholder of record or a beneficial owner, you can also vote your shares on the Internet at www.proxyvote.com. Both the telephone and Internet voting systems have easy-to-follow instructions on how you may vote your shares and allow you to confirm that the system has properly recorded your vote. If you are voting your shares by telephone or Internet, you should have on hand when you call or access the website, as applicable, the proxy card or voting instruction card. If you vote by telephone or Internet, you do not need to return your proxy card to us. If you have received, by request, a hard copy of the proxy card or voting instruction card and wish to submit your proxy by mail, you must complete, sign and date the proxy card or voting instruction card and return it in the envelope provided so that it is received prior to the 2023 Annual Meeting of Stockholders. Properly completed proxies will be voted as you direct. Properly executed proxies that do not contain voting instructions will be voted “FOR” Proposals One, Two and Three, “EVERY YEAR” on Proposal Four and “AGAINST” Proposals Five and Six. While we encourage holders of common stock to vote by proxy, you also have the option of voting your shares at the 2023 Annual Meeting of Stockholders. All holders of common stock, whether your shares are registered directly in your name with our transfer agent or held in a brokerage account by a bank or other nominee, may virtually attend the 2023 Annual Meeting of Stockholders and vote online, subject to compliance with the procedures described below. In order to vote online at the 2023 Annual Meeting of Stockholders, you will need the control number on your proxy card or voting instruction form, as further described below. Q: If my Warner Bros. Discovery shares are held in “street name” by a broker, bank or other nominee, will the broker, bank or other nominee vote my shares on each of the annual business proposals? A: If you hold your shares in street name and do not give instructions to your broker, bank or other nominee, the broker, bank or other nominee will be able to vote your shares with respect to “discretionary items” but will not be able to vote your shares with respect to “non-discretionary items,” in which case your shares will be treated as “broker non-votes” with respect to those items. “Broker non-votes” are shares that are held in street name by a bank, broker or other nominee that indicates on its proxy that it does not have discretionary authority to vote on a particular matter. The auditor ratification proposal (Proposal Two) is a “discretionary item,” whereas the election of directors (Proposal One), the advisory vote on 2022 named executive officer compensation (Proposal Three), the advisory vote on the frequency of future named executive officer compensation votes (Proposal Four) and the stockholder proposals (Proposals Five and Six) are “non-discretionary items.” Accordingly, if you hold your shares in street name and do not provide voting instructions to your broker, bank or other nominee, your shares may, in the discretion of the broker, bank or other nominee, be voted only on the auditor ratification proposal (Proposal Two). If you hold your shares in street name and do not provide voting instructions to your broker, bank or other nominee, your shares will NOT be voted on Proposal One, Proposal Three, Proposal Four, Proposal Five or Proposal Six.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Q: May I change or revoke my vote after returning a proxy card or voting by telephone or over the Internet? A: Yes. Before your proxy is voted at the 2023 Annual Meeting of Stockholders, you may change or revoke your vote on the proposals by telephone or over the Internet (if you originally voted by telephone or over the Internet), by virtually attending the 2023 Annual Meeting and voting online during the meeting, or by delivering a signed proxy revocation or a new signed proxy with a later date to: Warner Bros. Discovery, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Any signed proxy revocation or new signed proxy card must be received before the start of the 2023 Annual Meeting of Stockholders. Your virtual attendance at the 2023 Annual Meeting of Stockholders will not, by itself, revoke your proxy. If your shares are held in an account by a broker, bank or other nominee whom you previously contacted with voting instructions, you should contact your broker, bank or other nominee to change your vote. Q: Whom should I contact if I have any questions about the proxy materials or voting? A: If you have any questions about the proxy materials or if you need assistance submitting your proxy card or voting instruction card or voting your shares or need additional copies of this proxy statement or the enclosed proxy card, you should contact our proxy solicitor: Innisfree M&A Incorporated
501 Madison Avenue
20th Floor
New York, NY 10022
(877) 717-3922 (call toll-free)
(212) 750-5833 (banks and brokerage firms) If your shares are held “street name,” through a bank, brokerage firm or other nominee, you should contact such bank, brokerage firm or other nominee if you need to obtain voting instruction cards or have questions on how to vote your shares. Proxy Solicitation Q: Who is soliciting my vote? A: The Board of Directors of Warner Bros. Discovery, Inc. has sent you this proxy statement. We will pay all expenses in connection with the solicitationstatement and is soliciting your vote on proposals being submitted for consideration at our 2023 Annual Meeting of the enclosed proxy. Stockholders to be held virtually at www.virtualshareholdermeeting.com/WBD2023 on May 8, 2023 and any adjournment or postponement thereof. In addition to solicitation by mail, our officers and employees, who will receive no extra compensation for their services, may solicit proxies by telephone, in writing, electronically or in person. We will reimburse brokers and nominees who hold shares in their names for their reasonable out-of-pocket expenses to furnish proxy materials to the beneficial owners of such shares. By Order
We have also engaged Innisfree M&A Incorporated, a proxy solicitation agent, to assist us with our solicitation for this annual meeting and expect to pay no more than $35,000, plus reimbursement of out-of-pocket expenses for its efforts in connection with this annual meeting. Q: Who will bear the cost of soliciting votes for the 2023 Annual Meeting? A: We will pay the cost of solicitation of proxies, including the preparation, website posting, printing and delivery of the BoardNotice of Directors,
Savalle C. Sims
Executive Vice PresidentInternet Availability of Proxy Materials, proxy statement and General Counsel
April 29, 2020
related materials. We will furnish copies of these materials to banks, brokers, fiduciaries, custodians and other nominees that hold shares on behalf of beneficial owners so that they may forward the materials to beneficial owners. | | | 
DISCOVERY, INC.
8403 COLESVILLE ROAD
SILVER SPRING, MD 20910
| | VOTE BY INTERNET
Before The Meeting- Go towww.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go towww.virtualshareholdermeeting.com/DISCA2020
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
| | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
96 | | D05786-P38469 KEEP THIS PORTION FOR YOUR RECORDS | — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| | | | | | | | | | | | | | | | | | | DISCOVERY, INC.
| | For
All
| | Withhold
All | | For All
Except | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | | | | | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2 AND 3 AND “AGAINST” PROPOSAL 4. | | | | | | | | | | | | | | | | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | Vote On Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | | ELECTION OF DIRECTORS | | | | | | | | | | | | | | | | | | | Nominees: | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | 01) | | Robert R. Bennett | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | | | | | | | 02) | | John C. Malone | | | | | | | | | | | | | | | | | | | | | 03) | | David M. Zaslav | | | | | | | | | | | | | | | | | | Appendix A |
Attending the 2023 Annual Meeting Q: How do I virtually attend the 2023 Annual Meeting? A: We will host the 2023 Annual Meeting of Stockholders live online via webcast. You may attend the 2023 Annual Meeting of Stockholders live online by visiting www.virtualshareholdermeeting.com/WBD2023. The webcast will start at 2:00 p.m.., Eastern Time, on Monday, May 8, 2023. You will need the control number included on your proxy card or voting instruction form in order to be able to vote or ask questions during the 2023 Annual Meeting of Stockholders. Instructions on how to attend and participate online are posted at www.virtualshareholdermeeting.com/WBD2023. Online check-in will begin at 1:45 p.m., Eastern Time, on Monday, May 8, 2023, and you should allow ample time for the online check-in proceedings. We will have technicians standing by and ready to assist you with any technical difficulties you may have accessing the virtual meeting starting at 1:45 p.m., Eastern Time on Monday, May 8, 2023. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the 2023 Annual Meeting log-in page. Q: Why is the 2023 Annual Meeting a virtual, online meeting? A: There will not be a physical meeting location for the 2023 Annual Meeting. We believe that hosting a virtual meeting will facilitate stockholder attendance and participation at our 2023 Annual Meeting by enabling stockholders to participate remotely from any location around the world. Our virtual meeting will be governed by our Rules of Conduct of Meeting which will be posted at www.virtualshareholdermeeting.com/WBD2023 in advance of the meeting. We have designed the virtual annual meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform. Q: How do I submit a question at the 2023 Annual Meeting? A: Stockholders may submit questions at the 2023 Annual Meeting of Stockholders by using the virtual meeting platform at www.virtualshareholdermeeting.com/WBD2023. Once you have logged into the site using your control number, you will be able to submit questions electronically via the virtual meeting platform. | | | | | | | | | | | | | | 2023 PROXY STATEMENT | | Vote On Proposals
| | For | | Against | | Abstain | | | | | 2.
| | Ratification of the appointment of PricewaterhouseCoopers LLP as Discovery, Inc.’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
| | ☐
| | ☐
| | ☐
| | | | | 3.
| | To vote on an advisory resolution to approve the 2019 compensation of Discovery, Inc.’s named executive officers, commonly referred to as a “Say on Pay” vote.
| | ☐
| | ☐
| | ☐
| | | | | 4.
| | To vote on a stockholder proposal regarding simple majority vote, if properly presented.
| | ☐
| | ☐
| | ☐
| | | | | 5.
| | By the proxy holders, in their discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof.
| | | | | | | | | | | The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned Stockholder(s).If no direction is made, this proxy will be voted “FOR” proposals 1, 2 and 3 and “AGAINST” proposal 4.If any other matters properly come before the meeting, the persons named in this proxy will vote in their discretion.
| | | | | | | | | | | Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX]
| | Date
| | | | Signature (Joint Owners)
| | Date
| | 97 |
| | | | | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
D05787-P38469
|
| | | | | | | DISCOVERY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 2020
The stockholder(s) hereby appoint(s) Savalle C. Sims and Tara L. Smith, or either of them, as proxies, each with the power to appoint her substitute, and hereby authorize(s) each of them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Series A Common Stock or Series B Common Stock of Discovery, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., Eastern Time, on June 18, 2020, held virtually at www.virtualshareholdermeeting.com/DISCA2020, and any adjournment or postponement thereof. Instructions on how to access the Annual Meeting are available on our Investor Relations website (http://ir.corporate.discovery.com), by contacting us at investor_relations@discovery.com or at 1-877-324-5850.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED ON THE REVERSE SIDE, “FOR” PROPOSALS 2 AND 3 AND “AGAINST” PROPOSAL 4.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
| | | | | CONTINUED AND TO BE SIGNED ON REVERSE SIDE
| | |
| | |
DISCOVERY, INC.
8403 COLESVILLE ROAD
SILVER SPRING, MD 20910
| | VOTE BY INTERNET
Before The Meeting- Go towww.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go towww.virtualshareholdermeeting.com/DISCA2020
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
| | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| | D05788-P38469 KEEP THIS PORTION FOR YOUR RECORDS | — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| | | | | | | | | | | | | | | | | | | DISCOVERY, INC.
| | For
All
| | Withhold
All | | For All
Except | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | | | | | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2 AND 3 AND “AGAINST” PROPOSAL 4. | | | | | | | | | | | | | | | | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | Vote On Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | | ELECTION OF DIRECTORS | | | | | | | | | | | | | | | | | | | Nominees: | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | 01) | | S. Decker Anstrom | Proxy Statement Summary | | Proposal 1 | | Corporate Governance | | Audit Matters | | Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Additional Information Availability of Annual Report We filed our 2022 Form 10-K with the SEC on February 24, 2023. The 2022 Form 10-K, including all exhibits, can also be found in the Investor Relations section of our corporate website: ir.wbd.com and can be downloaded free of charge. Paper copies of the 2022 Form 10-K may be obtained without charge, and paper copies of exhibits to the 2022 Form 10-K are available, but a reasonable fee per page will be charged to the requesting stockholder. Stockholders may make requests in writing to the attention of Investor Relations by mail at Warner Bros. Discovery, Inc., 230 Park Avenue South, New York, New York 10003, by telephone at (212) 548-5882 (or toll-free at (877) 324-5850), or by email at investor.relations@wbd.com. Website References We routinely use our Investor Relations website to provide news releases, announcements and other statements about our business and results of operations, some of which may contain information that may be deemed to be material to investors. Accordingly, we encourage investors to monitor our website and review the information that we share at ir.wbd.com. Information contained on or connected to any website referenced in this proxy statement is not incorporated by reference in this proxy statement or in any other report or document we file with the SEC. Cautionary Statement Concerning Forward-Looking Statements Information set forth in this proxy statement contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties and on information available to Warner Bros. Discovery as of the date hereof. The Company’s actual results could differ materially from those stated or implied due to risks and uncertainties associated with its business, which include the risk factors disclosed in the Company's filings with the SEC, including but not limited to the Company’s most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. Forward-looking statements include statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future, and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “should,” “will” and “would” or similar words. Forward-looking statements include, without limitation, statements regarding future financial and operating results, the Company’s plans, objectives, expectations and intentions, and other statements that are not historical facts. Warner Bros. Discovery expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
02) | | Robert J. Miron | | | | | | | | | | | | | | | | | | | | | 03) | | Steven A. Miron | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Proxy Statement Summary | | Vote On Proposals
Proposal 1 | | ForCorporate Governance | | AgainstAudit Matters | | AbstainExecutive Compensation | | Other Matters | | Additional Information | | Appendix A |
Submission of Stockholder Proposals for 2024
Annual Meeting The table below summarizes the requirements for stockholders who wish to submit proposals or director nominations for the 2024 Annual Meeting of Stockholders. Stockholders are encouraged to consult Rule 14a-8 of the Exchange Act and our Bylaws, as appropriate, to see all applicable requirements. | | | | | | | | | | Proposals for inclusion in
2024 Proxy Statement | 2.
Other proposals/nominees to be
presented at 2024 Annual Meeting of
Stockholders* | | Type of Proposal | | RatificationSEC rules permit stockholders to submit proposals for inclusion in our 2024 Proxy Statement by satisfying the requirements set forth in Rule 14a-8 of the appointmentExchange Act
| Stockholders may present proposals or director nominations directly at the 2024 Annual Meeting of PricewaterhouseCoopers LLP asStockholders (and not for inclusion in our proxy materials) by satisfying the requirements set forth in Section 1.6 of our Bylaws** | When proposal must be
received by Discovery | No later than December 1, 2023 | No earlier than February 8, 2024 and no later than March 9, 2024*** | | Where to send | By mail: Corporate Secretary, Warner Bros. Discovery, Inc.’s independent registered public accounting firm for the fiscal year ending December 31, 2020. 230 Park Avenue South, New York, NY 10003
By Email: CorporateSecretary@discovery.com | | What to include | The information required by Rule 14a-8 | ☐
The information required by our Bylaws** |
* Any proposal without the required notice will not be considered properly submitted under our Bylaws. Any proposal that is received by us after March 11, 2024, will not be considered filed on a timely basis under Rule 14a-4(c)(1). Proposals that are not properly submitted or timely filed will not be presented at the 2024 Annual Meeting. For proposals that are properly submitted and timely filed, SEC rules permit management to retain discretion to vote proxies we receive, provided that: (1) we include in our proxy statement advice on the nature of the proposal and how we intend to exercise our voting discretion; and (2) the proponent does not issue a proxy statement. ** Our Bylaws are filed as an exhibit to our 2022 Form 10-K and are available in the corporate governance section of our Investor Relations
website at ir.wbd.com. *** Assumes our 2024 Annual Meeting of Stockholders is held between April 8, 2024 and July 7, 2024, as it is expected to be. Please see our Bylaws for additional information regarding the advance notice deadline in the event the 2024 Annual Meeting of Stockholders is not held between April 8, 2024 and July 7, 2024. Other Business The Board knows of no other business to be brought before the 2023 Annual Meeting of Stockholders. If, however, any other business should properly come before the 2023 Annual Meeting of Stockholders, the persons named in the accompanying proxy will vote proxies as in their discretion they may deem appropriate, unless they are directed by a proxy to do otherwise. By Order of the Board of Directors, Tara L. Smith Senior Vice President, Securities & Executive Compensation and Corporate Secretary March 29, 2023 | | ☐
| | ☐
| | | | 2023 PROXY STATEMENT | | 3.
| | To vote on an advisory resolution to approve the 2019 compensation of Discovery, Inc.’s named executive officers, commonly referred to as a “Say on Pay” vote.
| | ☐
| | ☐
| | ☐
| | 99 |
| | 4.
| | To vote on a stockholder proposal regarding simple majority vote, if properly presented.
| | ☐
| | ☐
| | ☐
| | | | | 5.
| | By the proxy holders, in their discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof.
| | | | | | | | | | | The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned Stockholder(s).If no direction is made, this proxy will be voted “FOR” proposals 1, 2 and 3 and “AGAINST” proposal 4.If any other matters properly come before the meeting, the persons named in this proxy will vote in their discretion.
| | | | | | | | | | | Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Statement Summary | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX]
| | Date
| Proposal 1 | | Corporate Governance | Signature (Joint Owners)
| Audit Matters | Date
| Executive Compensation | | Other Matters | | Additional Information | | Appendix A |
Appendix A Warner Bros. Discovery, Inc.
Nasdaq Board Diversity Matrix The following table is presented in accordance with the requirements of, and in the format prescribed by, Nasdaq Rule 5606. | | | | | | | | | Warner Bros. Discovery, Inc. Board Diversity Matrix (As of March 29, 2023) | | Total Number of Directors | 13 | | Part 1: Gender Identity | | | | Female | Male | | Directors | 3 | 10 | | Part 2: Demographic Information | | | African American or Black | 2 | — | | Asian | 1 | 2 | | White | — | 8 |
| | | | | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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D05789-P38469
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| | | | | | | DISCOVERY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 2020
The stockholder(s) hereby appoint(s) Savalle C. Sims and Tara L. Smith, or either of them, as proxies, each with the power to appoint her substitute, and hereby authorize(s) each of them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Series A-1 Preferred Stock of Discovery, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., Eastern Time, on June 18, 2020, held virtually at www.virtualshareholdermeeting.com/DISCA2020, and any adjournment or postponement thereof. Instructions on how to access the Annual Meeting are available on our Investor Relations website (http://ir.corporate.discovery.com), by contacting us at investor_relations@ discovery.com or at 1-877-324-5850.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED ON THE REVERSE SIDE, “FOR” PROPOSALS 2 AND 3 AND “AGAINST” PROPOSAL 4.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
| | | | 100 | | CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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