Discovery just announced the launch of its own streaming service, joining other streaming giants Disney, Netflix, and Hulu. Here's how the media giant pays its executives.
- Discovery announced Wednesday that it will launch its streaming service, Discovery+, in January.
- The firm, known for channels like HGTV, the Food Network, and Animal Planet, will offer its product at $4.99 for streaming with ads, and $6.99 without.
- The firm already pays executives in line with other streaming and media giants like Disney and Netflix. Executive pay at Discovery ranged from $7.3 million for sub-CEO Peter Faricy to $45.8 million for CEO David Zaslav.
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On January 4, 2021, Discovery will join Netflix, Disney, and Hulu in the streaming universe with its streaming platform, Discovery+. The service will be available to customers at $4.99 a month with ads or $6.99 for ad-free viewing.
The service is available at a much lower cost than some of its competitors — Netflix's monthly fee is $13.99, and HBO Max's is $14.99.
Discovery is the media giant behind channels like Discovery, HGTV, Animal Planet, and TLC — think Fixer Upper, Diners, Drive-ins, and Dives, and Shark Week. With Discovery+, customers will be able to watch these channels instantly. According to CNBC, Discovery+ will also feature content from A&E, The History Channel, and Lifetime.
The executives leading Discovery through this transition into the world of streaming are already paid in line with other executives at streaming giants. Let's break down executive compensation at Discovery.
CEO David Zaslav's 2019 compensation is in line with other CEOs of major streaming companies
Discovery executives earned an average of $16.8 million in 2019 total reported compensation, ranging from $7.3 million for Peter Faricy, CEO of Discovery's global direct-to-consumer business to $45.8 million for the firm's head CEO, David Zaslav, according to the firm's most recent proxy statement filed with the SEC. Long-term awards made up nearly half of total reported compensation for each executive.
With total compensation at $45.8 million, Zaslav is in line with other CEOs of streaming giants — Disney's Bob Iger and Netflix's Reed Hastings had 2019 total reported compensation of of $47.5 million and $38.6 million, respectively.
In the chart below, we show compensation for each executive as it was presented in the summary compensation table in Discovery's proxy statement, split out by element. Hold your cursor over the labels at the top to highlight the different parts of the executives' compensation, and reference the bulleted list below for more information on each compensation element.
What the terms in the table mean:
- Salary: The salary an executive earns in a given year.
- Stock awards/option awards: Equity awards based on achievement within a firm's long-term incentive plan. Long-term incentives are also considered "at-risk" pay. Stock and option awards are two different types of equity awards — stocks are direct equity awards, while options give the executive the right to buy shares at a specific price.
- NEIP: Typically cash grants for performance in the short term. Bonuses are typically one-off awards, while anything in the column titled NEIP (nonequity incentive plan) typically means the awards are granted as part of a firm's short-term incentive plan and granted in cash (hence the "nonequity" label). Short-term incentives are thought of as part of "at-risk" pay, meaning that the executive must hit goals or benchmarks to receive the award.
- Other compensation: This number includes any value from the compensation data related to pension plans or nonqualified deferred-compensation earnings. It also includes any payments designated as "other compensation," which can include payment for things like personal or home security, employees' benefits plans, country-club fees, fees related to use of company aircraft, and even relocation expenses.
- Total compensation: All amounts summed.
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