Watchdog recommends David Zaslav not receive a near-billion-dollar payday from Hollywood consolidation

But regardless of all this, Zaslav stands to make a fortune on the sale, to the tune of $886 million. Not bad for a guy whose big idea was canceling a couple of finished movies for a tax write-off. However, surprisingly, not everyone thinks that he’s entitled to such a payment, namely, the Institutional Shareholder Services. Founded in 1985, the ISS is an influential private proxy advisory firm for shareholders, helping them make decisions that won’t trigger fraud litigation. The ISS approved the sale to Paramount, which it determined was the result of a “competitive sales process and public bidding war” between Netflix and Paramount, and believes the outlandish pay to other executives is A-okay. It’s Zaslav, who would receive “one of the highest golden parachute estimates ever observed,” the group finds “problematic.” 

In a report (via The Hollywood Reporter), the ISS is objecting to the “excise tax gross-up” that the WBD board approved last month. “Excise tax gross-ups represent an extraordinary cost that are inconsistent with common market practice, and most companies have eliminated such entitlements as a matter of good governance,” the ISS wrote in its recommendation.

The gross-up would provide Zaslav with payment in full, with Paramount being responsible for the taxes on such a payday. That would amount to $335.4 million, in addition, The Wrap writes, to a “single trigger vesting acceleration” for a majority of the package’s equity awards. And as soon as Paramount’s new WBD CEO takes over, Zaslav would get paid out. The ISS calls this “not a best practice.” However, the gross-up will decline “significantly” over time. If the deal closes in 2027, Zaslav will receive no tax reimbursement.