English Entertainment
Will Eisner survive the ‘Spring at Disney’?
MUMBAI: They call it Spring at Disney – the Disney corporate board meeting held every April.
This year’s meet, that is currently underway, happens to be one of the most closely watched corporate board meetings in recent memory. The meet will decide the fate of CEO Michael Eisner who was ousted from the post of chairman following an investors’ revolt on 3 March. Till then, he was holding the twin posts of chairman and CEO.
Media reports suggest that some high-profile investors have called on Disney directors to dismiss Eisner, whose contract ends in September 2006. But not many Disney observers are anticipating such drastic action as Eisner’s dismissal. Directors of Disney are also expected to analyse the post-March developments during the meet.
In March, Eisner had agreed to step down as chairman after 43 per cent of shareholders withheld their votes from Eisner has been blamed by some for the lackluster performance of the media-entertainment powerhouse in recent years. The company has acknowledged several of its movies biting the dust at the box-office, including the recent releases Home on the Range and The Alamo. Disney has also moved to shake up the management at its struggling ABC (American Broadcasting Company) television network.
The meeting has attracted a lot of media glare also because it might signal the future of Comcast Corporation’s unsolicited bid. Aspiring Disney-owner Comcast has been keeping mum in recent weeks on its outstanding offer for Disney, as they are awaiting quarterly earnings announcement this Wednesday. At the same time, some reports suggest that Comcast is ready to withdraw its bid.
“The board at Disney has two options: oust Mr. Eisner today in order to open the door to an internal successor or keep him and his preternatural resistance to grooming senior executive talent at the expense of his perceived responsibility for Disney’s performance,” reads an article in Red Herring.com.
Meanwhile, dissident shareholders Roy E. Disney and Stanley Gold lashed against the Disney’s director board in their web site www.SaveDisney.com Making a dig at Eisner and his colleagues, Stanley Gold writes: “Well, Spring at Disney is here again! And do you know how we can tell? They’re rearranging the deck chairs again at ABC. It’s an annual festival, a little like Musical Chairs, where everyone moves up, down, or over a place or two and pretends it’s the solution to the fourth place dilemma. And there are always a few faces missing when it’s over.”
English Entertainment
Warner Bros. Discovery shareholders approve Paramount deal
Investors wave through a $111 billion megamerger but deliver a stinging, if toothless, rebuke over half-a-billion-dollar goodbye packages
NEW YORK: The shareholders said yes to the deal. They said no to the cheque. At a virtual special meeting on Thursday that lasted barely ten minutes, Warner Bros. Discovery investors voted overwhelmingly to approve Paramount Skydance’s $111 billion acquisition of the company — and then turned around and voted against the lavish exit pay packages lined up for chief executive David Zaslav and his fellow outgoing executives.
Not that it will make much difference. The compensation vote is purely advisory and non-binding. The Warner Bros. Discovery board can, and almost certainly will, pay out as planned.
But the symbolism stings. It is the second consecutive year that WBD shareholders have voted against the executive compensation packages, and this time they had good reason. Zaslav’s exit deal is, by any measure, extraordinary. Under the terms filed with the Securities and Exchange Commission, he is set to receive $34.2 million in cash severance, $517.2 million in equity in the combined company, and $44,195 in continued health coverage — a total of at least $550 million. On top of that, Warner Bros. Discovery has agreed to reimburse Zaslav up to $335 million for taxes assessed by the Internal Revenue Service on his accelerated stock vesting, though the company says that figure will decline depending on when the deal closes. As of March 11, Zaslav also held $115.85 million in vested WBD stock awards — and last month sold a further $114 million worth of WBD shares.
Shareholder advisory firm ISS recommended voting against the compensation measure, citing “problematic” tax reimbursements to Zaslav and the full vesting of his stock awards.
Zaslav will be bound by a two-year non-competition covenant and a two-year non-solicitation of customers and employees after the deal closes.
His lieutenants are not walking away empty-handed either. J.B. Perrette, chief executive and president of global streaming and games, is in line for $142 million, comprising $18.2 million in cash severance and $123.9 million in equity. Bruce Campbell, chief revenue and strategy officer, will receive an estimated $121.5 million, including $18.8 million in severance and $102.7 million in equity. Chief financial officer Gunnar Wiedenfels is set for $120 million, made up of $6.6 million in cash severance and $113.1 million in equity. Gerhard Zeiler, president of international, will get $82.6 million, including $11.9 million in severance and $70.7 million in equity.
The deal itself, clinched in February after Netflix declined to raise its bid for Warner Bros., still needs regulatory clearance from the Justice Department and European authorities. Several state attorneys general are also weighing legal action to block it.
Senator Elizabeth Warren, Democrat of Massachusetts, was unsparing. “The Paramount-Warner Bros. merger isn’t a done deal,” she said after the shareholder vote. “State attorneys general across the country are stepping up to stop this antitrust disaster. We need to keep up this fight.”
If it does go through, the combined entity would be a formidable beast, bringing together Paramount Skydance’s stable — CBS, CBS News, Paramount Pictures, Paramount+, BET, MTV and Nickelodeon — with WBD’s portfolio of HBO, Max, Warner Bros. film and TV studios, DC, CNN, TBS, TNT, HGTV and Discovery+. Paramount has said it expects $6 billion in cost savings from the merger, which is Wall Street shorthand for mass layoffs on a significant scale.
The ten-minute meeting was presided over by chairman Samuel Di Piazza Jr., with Zaslav, Campbell, Wiedenfels and chief communications officer Robert Gibbs in virtual attendance. Di Piazza was bullish. “We appreciate the support and confidence our stockholders have placed in us to unlock the full value of our world-class entertainment portfolio,” he said. “With Paramount, we look forward to creating an exceptional combined company that will expand consumer choice and benefit the global creative talent community.”
Zaslav echoed the sentiment. “Over the past four years, our teams have transformed Warner Bros. Discovery and returned the company to industry leadership,” he said. “Today’s stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders.”
Paramount Skydance struck a similar note. “Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery,” it said in a statement, adding that it looked forward to “closing the transaction in the coming months.”
The shareholders have spoken on the merger. On the pay, they were ignored before the vote was even counted.
