Shareholder Adviser Urges Opposition to Warner Bros Discovery Executive Pay as Paramount Skydance Merger Faces Growing Scrutiny

BY EMMANUEL OGBONNA

A leading shareholder advisory firm has recommended that investors at vote against executive compensation packages linked to the company’s proposed merger with , intensifying scrutiny of one of the largest media deals in recent years.

The recommendation comes as Warner Bros. Discovery continues to pursue its planned $110 billion merger with Paramount Skydance, a transaction that has already attracted regulatory attention, political opposition and concerns from industry figures who fear the deal could lead to significant job losses across the entertainment sector.

Institutional Shareholder Services (ISS), one of the world’s most influential proxy advisory firms, advised shareholders to reject compensation arrangements for Chief Executive Officer and several senior executives. The firm also recommended that investors withhold support from members of the board’s compensation committee, arguing that the board has failed to adequately address shareholder concerns over executive pay.

The recommendation represents another challenge for Warner Bros. Discovery’s leadership at a time when investors, regulators and industry observers are closely examining the financial and strategic implications of the merger.

Although shareholders approved the merger proposal earlier this year, support for executive compensation arrangements tied to the transaction has been considerably weaker. During an advisory vote held in April, investors rejected the executive pay plans associated with the deal, signaling dissatisfaction with the scale of the proposed awards despite backing the merger itself.

ISS cited several concerns in its analysis, focusing particularly on the compensation structure surrounding Zaslav. According to the advisory firm’s assessment, the chief executive’s annual base salary of $3 million and target short-term bonus opportunity of $22 million significantly exceed median levels among comparable companies.

The firm also highlighted the potential value of merger-related compensation that could be awarded if the transaction is completed. Under the proposed arrangements, Zaslav could receive compensation and benefits valued at as much as $887 million, a figure that has drawn widespread attention from investors and corporate governance advocates.

ISS argued that the scale of the potential payout raises serious concerns about whether executive rewards are appropriately aligned with company performance and shareholder interests. In its report, the advisory firm concluded that there appears to be a disconnect between compensation levels and the company’s recent operating and stock market performance.

The criticism follows a difficult period for Warner Bros. Discovery shareholders, many of whom have expressed frustration over the company’s share price performance, debt burden and integration challenges following previous corporate transactions.

Corporate governance experts often view advisory votes on executive compensation as important indicators of investor sentiment. While the votes are generally nonbinding, strong opposition can increase pressure on boards of directors to modify compensation practices and engage more actively with shareholders.

ISS also criticized the company’s compensation committee, arguing that it failed to respond adequately after last year’s executive pay proposal received only 40.5% support from shareholders. Such a result is generally viewed as a significant rebuke because it indicates that a majority of voting investors opposed the compensation arrangements.

As a result, the advisory firm recommended that shareholders withhold votes from five members of the compensation committee: , , , and .

According to ISS, the directors did not take sufficient action to address concerns raised by investors after the previous compensation vote failed to gain broad support. The recommendation increases pressure on the board to demonstrate that shareholder feedback is being taken seriously as the merger process moves forward.

The compensation dispute is emerging alongside growing regulatory and legal uncertainty surrounding the proposed merger. Several U.S. states, including and , are reportedly preparing legal action aimed at challenging the transaction. Officials in those states are said to be examining potential competition concerns and the broader impact the merger could have on media markets, employment and consumer choice.

The legal challenges could add another layer of complexity to a transaction that is already undergoing extensive regulatory review in multiple jurisdictions.

International regulators are also evaluating the merger. The is expected to announce a decision by July 7 regarding whether the deal can proceed within its member states. Approval from European authorities is considered an important milestone because of the significant global operations maintained by both companies.

Industry critics have warned that combining two of the entertainment sector’s largest companies could result in substantial restructuring efforts. Many analysts expect the merged entity would seek cost savings through consolidation of operations, potentially affecting film studios, television networks, production units and support functions.

Several prominent figures in Hollywood have publicly expressed concerns about the merger’s potential impact on employment. Labor organizations, creative professionals and industry advocates have argued that additional consolidation could reduce opportunities for workers throughout the entertainment ecosystem and place further pressure on an industry already navigating rapid changes in viewing habits, streaming competition and advertising markets.

Supporters of the merger, however, contend that the combined company would be better positioned to compete against major global streaming platforms and technology-driven media rivals. They argue that greater scale could strengthen content investments, improve distribution capabilities and create a more sustainable long-term business model.

For Warner Bros. Discovery shareholders, the upcoming votes on executive compensation and board oversight are likely to serve as an important test of investor confidence in management’s strategy. While the merger itself has secured shareholder approval, growing opposition to executive pay packages suggests that many investors remain uneasy about how the benefits and risks of the transaction are being distributed.

As regulatory reviews continue and legal challenges take shape, the debate surrounding the merger is increasingly extending beyond traditional antitrust concerns to include broader questions about corporate governance, executive compensation and the future structure of the global entertainment industry.