Discovery Reveals Salaries, Going-Public Details
By Frank Ahrens
Discovery Communications Inc. chief executive David M. Zaslav made more than $18 million in cash and stock-related compensation during his first year helming the Silver Spring cable television company, according to a securities filing yesterday that spells out Discovery's transition to a publicly traded company.
The figure includes a $2 million base salary, a $3 million performance bonus and a $2.5 million signing bonus for coming over from NBC Universal's cable division in January 2007. Additionally, he was awarded stock-related compensation worth about $11 million last year, part of a stock package eventually worth more than $40 million. Discovery also pays Zaslav's home-office satellite, cable and Internet-access bills.
Zaslav has a guaranteed bonus of $2 million this year, which could go as high as $3 million.
Discovery chairman John S. Hendricks, who founded Discovery in 1982, was paid stock-related compensation worth $29 million last year, in addition to his $1 million base salary and the opportunity to earn up to an additional $600,000 in bonuses.
Zaslav, 48, has spent the past year-and-a-half remaking the company, laying off 25 percent of the global workforce, closing all 103 Discovery stores and launching new programming, such as Planet Green, the former Discovery Home channel that debuted earlier this month.
At the same time, Discovery's parent company, Discovery Holdings, controlled by media billionaire John Malone, is aiming to take Discovery public by the third quarter. The company will trade on the Nasdaq under the symbol "DISCK."
The going-public transaction was spelled out in a proxy filed at the Securities and Exchange Commission today. But details of Discovery's operations that have long been kept private -- such as revenue and profit figures for each of the company's networks, including Discovery and TLC -- still have not been disclosed.
Since Hendricks founded Discovery in 1982, it has been a privately held company with a complicated ownership structure.
Malone, chairman of Liberty Media, has been Discovery's controlling shareholder. Discovery had two other major shareholders -- Cox Communications and Advance/Newhouse Media -- but their stakes have been bought out or folded in over the past year, as Discovery sought to simplify its ownership structure to prepare for public ownership and Wall Street scrutiny.
Advance/Newhouse will receive shares in the new Discovery in exchange for trading in its ownership stake and contributing the Animal Planet channel to Discovery's programming lineup. Advance/Newhouse will have the right to seat three of new Discovery's 11 directors; its shares will control 26 percent of new Discovery's voting power.
Liberty Media will have no ownership stake in the new Discovery. However, through a preferred class of stock, Malone will control 23 percent of the voting power of the new Discovery and have a seat on the board. Zaslav will remain as Discovery's chief executive.
Among the directors of new Discovery is Lawrence S. Kramer, former head of CBS Digital Media, founder of MarketWatch and a onetime Washington Post editor.
Also yesterday, Discovery said that Brad Singer will be the company's new chief financial officer, replacing Roger Millay, who was hired shortly before Zaslav took over the company. Singer comes from American Tower Corp., which builds and maintains cellphone, radio and television towers, and was the chief financial officer of Washington-based Clyde's Restaurant Group.
June 11, 2008; 5:00 PM ET
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