Even though his compensation declined by one-third last year, Discovery Communications CEO David M. Zaslav was the highest-paid executive in Montgomery and Frederick counties for the fourth consecutive year in 2013, according to a review of public companies’ proxy statements filed with the U.S. Securities and Exchange Commission.
Zaslav, who took over as CEO of the Silver Spring broadcasting giant in 2007, had compensation of $33.4 million in 2013, down from $49.9 million in 2012. The large majority of his compensation — $22.5 million — was in stock option awards. A key reason for the decline from 2012 was that Zaslav exercised far fewer stock and option awards last year.
Marillyn A. Hewson, CEO of Bethesda defense giant Lockheed Martin, saw her total pay more than double last year to $25.2 million, thanks in large part to about $7 million more in stock awards. She also enjoyed about $5 million more in non-equity incentive pay.
Last year was a mixed year for CEOs. Only half of the 10 highest-paid CEOs of public companies in Montgomery and Frederick counties saw their compensation increase, with four experiencing declines and one seeing the same.
Some of the decline is due to a slower stock market for many companies in 2013 than in 2012. Shareholders also have demanded that boards rein in compensation.
About 60 percent of companies that filed disclosures nationally raised “other compensation” spending, according to compensation data firm Equilar. Zaslav saw his “other” compensation jump to $2 million in 2013 from $433,000 in 2102.
This amount included $1.5 million for special contributions to his supplemental retirement plan. Zaslav also received $165,018 for personal use of aircraft, including family travel and commuting, $16,800 for a car allowance and $171,562 for personal security services, including a car and security-trained driver.
Hewson saw her “other” compensation fall by about $100,000 last year to $238,000. That included $76,782 for use of a corporate jet, $55,115 for personal security and $27,106 for tax assistance.
Spokespeople for Discovery and Lockheed said they do not discuss executive compensation beyond what is in proxy statements.
Proxies are devoting more space to explaining their compensation policies, said Aaron Boyd, director of governance research for Equilar.
“Some of this stems from changes in the regulatory environment,” Boyd said. “There has also been a shift toward enhancing the readability, with more companies writing proxy summaries in formats that make the content easily digestible for readers.”
Discovery saw revenue increase 23 percent in 2013, while cash flow and adjusted operating income also rose. “We had a strong year in 2013,” executives said in the proxy. “In the U.S., this was our fifth consecutive year of audience growth.”
Discovery designs compensation packages based on the scope of the executive’s responsibilities, proven performance and a determination of competitive compensation in the market for similar roles, they said.
“We continue to refine our compensation programs to strengthen the link between executive and stockholder interests,” executives said in the proxy.
Lockheed executives noted in the proxy that 2013 was “a record-breaking year for Lockheed Martin on many financial, strategic and operational fronts in spite of a challenging environment due to government budget constraints, restructuring initiatives and transition of senior management positions.” Compensation is “contingent on performance,” with about 70 percent in the form of long-term incentives that link to stockholder interests, they said.
Lockheed conducts benchmarking analyses looking at compensation of key competitors such as Northrop Grumman. Hewson’s increase was largely due to being promoted to CEO in 2013, officials said in the proxy.
One study nationally by USA Today showed an average increase of 10 percent for CEO compensation in 2013.
Meanwhile, the average weekly, before-taxes wages paid to a worker in Montgomery County declined to $1,214 in September 2013 from $1,234 in September 2012, according to state labor figures. The average weekly wages paid to a worker in Frederick County dropped to $873 from $880 in that same time period.