By Andy Serwer

With all the swirling media news lately -- Warner Bros. Discovery's and Comcast's planned spinoffs, Paramount looking to merge with Skydance, Walt Disney buying the rest of Hulu -- there is much uncertainty surrounding legacy media. One thing is certain though, the CEOs orchestrating all this will get paid. A lot. No matter what their stocks do.

It's long been a truism that CEO pay violates Newton's Law of Universal Gravitation. For many business leaders, what goes up -- their pay -- never goes down. Maybe that will change when investors storm the barricades some day, but we probably shouldn't hold our collective breath.

It is true that some executives appear deserving of this perpetual largess machine. Most are just mediocre though. And then there are those for whom giant pay packages seem to make no sense, which includes media CEOs paid handsomely through thick and mostly thin -- and by thin I mean the meager total returns to shareholders. In the most egregious of examples, not only did the CEOs' pay climb ever upward, but it did so as their stocks went ever sideways or even downward.

It is absolutely the case that legacy TV and movies companies have faced hurricane-force headwinds. Cord-cutting and the growth of streaming services have taken their toll. The Wall Street Journal reports that cable penetration of America's TV households has dropped to 51% from 86% over the past decade, according to media-measurement firm Nielsen. So yes, short of waving a magic wand and turning their companies into the next Netflix, these CEOs are in a bind. No one is suggesting they work for free even when their stocks are infirm, but being among the most highly compensated CEOs in the land, that's tough to square.

To put some numbers to all this, Barron's asked research firm Equilar to tally up the total cumulative realized compensation of legacy TV and movie business CEOs during their tenures and compare it to annualized total shareholders' returns over the same period. What emerges isn't a pretty picture, though timing matters. Media stocks have been pounded of late, hurting stock performance of more recently tenured CEOs. Other executives who have been in their seats for longer periods, like Brian Roberts of Comcast and David Zaslav of Warner Bros. Discovery, benefited from robust stock performance in their early days, essentially masking recent weak performance.

Starting on the plus side of Equilar's survey is Thomas Rutledge, CEO of Charter Communications, who was chief executive from 2012 to 2022. Annualized total returns to shareholders was 17.8% and he took home just under $533 million, according to Equilar. Very nice work all around. Rutledge's numbers would look even better had Charter's stock not fallen by 52% in his last year as CEO. (Besides running cable networks, Charter, which recently struck a deal to buy rival Cox Communications, owns local news channels and regional sports networks.) Rutledge's successor, Christopher Winfrey, lags behind his predecessor, delivering an annual total stock return of 1.1% from 2022 to date and receiving some $24 million in pay.

Also squarely in the green is Bob Iger, now riding in his second rodeo as Disney CEO. Iger has acquitted himself quite nicely in both go-rounds; during his first tenure from 2005 to 2020, Disney stock was up 14.3% annually, and his second, from 2022 to date, up 11.4% a year. That he took home $723 million during those periods might seem excessive -- 97% of which came during Iger Part I -- but at least he did well by shareholders too. You may say that Iger was dealt a strong hand. True, but remember he was a senior executive at the company for a decade before he became CEO, so some of that strong foundation was of his making.

Lachlan Murdoch, CEO of Fox Corporation, controlled by his father Rupert Murdoch who also controls Barron's parent company, Dow Jones, a subsidiary of News Corp, has delivered 6.7% annually to shareholders since he became CEO in 2018, during which time he has taken home $158 million, according to Equilar.

Brian Roberts, CEO of Comcast, who controls a third of the voting power of that company's stock, has taken home $964 million since he took over as CEO in 2002 from his father, Ralph, who founded the company. That's a mountain of money. Shareholders have garnered 8.4% a year over that time period, but much of that came years ago. Comcast stock now trades for $35, the same price it did in November 2016.

Somewhat similar to Roberts, is David Zaslaz, CEO of Warner Bros. Discovery, who became CEO of predecessor company Discovery years ago. 'Zas' as he is known in the biz has been paid $884 million during his tenure, during which time his total shareholder return has averaged 2.5% a year. Like Roberts, Zaslav's shareholder returns -- tepid though they are -- would be worse had it not been for earlier glory days when Discovery was a hot stock. WBD now trades for $10, and even leaving aside when the stock hit $77 after it got the attention of the WallStreetBets message board on Reddit, it still trades down some 78% from a high of $46 in late 2013.

And then there's Bob Bakish, CEO of Paramount from 2019 through 2024, who pulled in $213 million, including severance, during which time shareholders annual total return was negative 22.8%. This company was slammed by everything from management turmoil, #MeToo scandals, an ill-fated re-merger with CBS, plus weak operating performance from what is considered to be a subpar portfolio of media properties. Some of this was certainly beyond Bakish's control, but did he need to get paid close to a quarter of billion dollars to preside over it?

So why do media CEOs get paid so much, even when their companies are underperforming? The first answer is of course, because they can. Earlier this month Warner Bros. Discovery shareholders rejected Zaslav's $59 million pay package. But as The Wall Street Journal noted: "The rejection is a symbolic rebuke of the Warner leadership's pay packages, since the shareholders' so-called "say on pay" vote is nonbinding."

Regarding the shareholder vote, a spokesperson from the company emailed me that "The Warner Bros. Discovery Board of Directors appreciates the views of all its shareholders and takes the results of the annual advisory vote on executive compensation seriously..."

Beyond that though there are a number of other reasons why old media CEOs have such bountiful paydays. One might be that they have to keep up with their employees. If Tom Cruise gets paid hundreds of millions for his eight Mission Impossible movies, then why shouldn't the CEO of Paramount, who greenlights and distributes the Impossible franchise, get at least in the same neighborhood? Another theory is that this is just a hangover effect from when media stocks like Comcast and WBD were market-beaters in decades past. In other words, the comp committees of these boards didn't turn the spigot off when they should have.

Then there's the hardship pay argument. "With the media business constantly evolving and in such a period of disruption, boards are looking for experienced leaders to guide them through the noise," says Amit Batish, Equilar's senior director of content. Because the job is so difficult, Batish says, often that role comes with premium compensation.

Wait a minute. So if you are a CEO and you run a company that does well, you get paid a truckload because the stock goes up? And if you are a CEO and you run a company in a difficult business you get paid a boatload because it's hard? Sounds like a 'coming and going' situation to me. It also strikes me that I'm in the wrong line of work.

Write to Andy Serwer at andy.serwer@barrons.com

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June 13, 2025 15:48 ET (19:48 GMT)

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