Discovery CEO’s compensation brings in more than top tier of politicians
The highest-paid executive in the Washington area earned nearly twice as much money last year as President Obama, his entire Cabinet, Vice President Biden, every U.S. Supreme Court justice, the House’s majority and minority leaders, and the entire U.S. Senate — combined.
David M. Zaslav made $42.6 million last year as CEO of Silver Spring-based Discovery Communications, more than tripling his annual compensation. By comparison, the entire slate of the most powerful positions in Washington banked $23.4 million.
The gulf between those paychecks reflects a national surge in generous stock awards and bonuses for corporate titans and a growing disparity between the haves and have-nots, according to analysts.
| Paychecks from Uncle Sam in 2010 |
| President Obama: $400,000 |
| Vice President Biden: $230,700 |
| U.S. Supreme Court Chief Justice John Roberts: $223,500 |
| U.S. Supreme Court associate justices: $213,900 |
| U.S. Cabinet members: $199,700 |
| U.S. Congress majority and minority leaders: $193,400 |
| Rank-and-file U.S. senators: $174,000 |
| It pays to be the king |
| D.C.’s highest-paid executives in 2010 |
| 1. David M. Zaslav, Discovery Communications, President and CEO: $42.6 million |
| 2. Paul C. Saville, NVR, President and CEO: $30.9 million |
| 3. Wesley G. Bush, Northrop Grumman, President and CEO: $22.1 million |
| 4. Robert J. Stevens, Lockheed Martin, Chairman and CEO: $19.1 million |
| 5. H. Lawrence Culp Jr., Danaher, President and CEO: $17 million |
| 6. Martine A. Rothblatt, United Therapeutics, Chairman and CEO: $16.1 million |
| 7. Richard D. Fairbank, Capital One, Chairman, President and CEO: $14.9 million |
| 8. Jay L. Johnson, General Dynamics, Chairman and CEO: $13.8 million |
| 9. Allen F. Wise, Coventry Health Care, Chairman and CEO: $13.6 million |
| 10. H. Thomas Watkins, Human Genome Sciences, President and CEO: $9.9 million |
Those eight-figure incomes have fueled debates across the country — as seen at the various Occupy encampments and Tea Party rallies on both coasts — between those railing against income inequality and others who dismiss the displays as class warfare.
“Honestly, this is a PR nightmare when the CEO is getting 42 gazillion dollars and the cameraman is getting $40,000,” said Douglas Bachtel, a professor of consumer economics at the University of Georgia. “This makes the whole corporation have egg on their face. I don’t think they’re looking at the unintended consequences in terms of public perception.”
The media conglomerate owns television channels such as Discovery, TLC and Animal Planet, as well as 50 percent of the Oprah Winfrey Network. Zaslav, who took over in January 2007 — before the company went public — oversaw a tripling in the company’s stock price as Wall Street rewarded his cost cutting, including layoffs. Shares jumped from $14.65 in January 2009 to $44.02 on Wednesday.
“The majority of his compensation is driven by the performance of the stock price,” said one senior Discovery official, who under company policy was not allowed to talk about Zaslav’s compensation on the record. “If the company doesn’t perform, then he doesn’t get paid.”
Zaslav was not available for comment to The Washington Examiner.
His base salary last year was $2 million, which the Discovery official labeled “very modest by CEO standards,” and Zaslav received $20.3 million in stock awards and roughly $15.4 million worth of options, as well as $4.4 million in travel, security and various other incentives, as well as other compensation, according to a Securities and Exchange Commission filing.
The pay package didn’t go over well with rank-and-file Discovery employees who learned of Zaslav’s compensation for the first time Wednesday.
“He makes how much?” asked one incredulous Discovery worker, heading into work at the Silver Spring office. “You’re lying. I’m sure he’s doing a good job, but that’s ridiculous — thanks for the morning pick-me-up, pal.”
“What a joke,” said another employee, who joked that he would take “an extra-long lunch break” later in the day.
Compensation for chief executives is increasingly tied to performance targets, and with stocks rebounding last year from historic tumbles, pay packages have grown at a similar clip — even if market prices are merely returning to their pre-recession levels.
And major companies, such as Discovery, are increasingly lavishing pay packages on executives to stay competitive with those given to leaders of fellow corporations in their respective industries.
The thinking, supporters say, is to keep talent from leaving for competitors. But critics argue that it merely drives up the price to retain executives regardless of their actual performance.
Ranking second and third, respectively, in the region, NVR chief executive Paul C. Saville banked $30.9 million last year and Northrop Grumman President and CEO Wesley G. Bush earned $22.1 million in total compensation.
Some analysts say the executive pay is symptomatic of a growing gap between compensation for chief executives and their employees.
“I don’t begrudge their success,” said Jared Bernstein, former chief economist for Vice President Biden. “I very much bemoan the lack of progress for everybody else. Clearly, what growth we did achieve did a wide end run around low- and middle-income people.”
