Discovery Communications revamped its employment agreement with CEO David Zaslav, extending it to early 2015, increasing his base salary to $3 million and creating incentives that could reap the cable veteran more than $55 million over the life of the contract.
According to documents filed with the Securities and Exchange Commission late last Thursday, Zaslav's new employment agreement — his old one wasn't scheduled to expire for another two years — calls for a new base salary of $3 million (up from $2 million last year) beginning in 2011. Discovery also will increase Zaslav's annual incentive target in 2009 to $4 million (up from $3.5 million in 2008), and subject it to $500,000 yearly increases from 2010 to 2014 to a total of about $6.5 million.
Zaslav will be eligible to receive performance-based restricted stock units between 2010 and 2012 worth a total of about $44 million. In addition, if he remains with Discovery through Dec. 31, 2014, he is entitled to receive, upon his separation from the company, a package worth about $12.25 million (two times the average of his base plus two times the average of his annual bonus for the last two years of the deal).
This year, the price of Discovery Holding Co.'s stock has nearly doubled, to $28.42 on Sept. 10 from $14.65 on Jan. 2. It was down less than 1% (28 cents) at about 1:00 p.m. Friday.
In a statement, Discovery founder and chairman John Hendricks said the company decided to redo Zaslav's agreement early to keep him on board.
“By any measure or metric, Discovery Communications has had a terrific performance, and securing David's leadership gives me great confidence [that] the best is yet to come,” Hendricks said in a prepared statement.
Zaslav joined Discovery in late 2006 from NBC Universal and has led the stable of networks through a strong period of growth; the company was the only major programmer to report ad sales gains in both the first and second quarters. Zaslav has also steered Discovery through a structural reorganization — where Cox Communications surrendered its 25% interest in exchange for $1.3 billion in cash and the Travel Channel — and has reorganized the company itself, creating new channels like Planet Green, the Oprah Winfrey Network (scheduled to launch in 2010) and a joint-venture network with Hasbro.