| ☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
| ☒ | No fee required |
| ☐ | Fee paid previously with preliminary materials |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange ActRules 14a-6(i)(1) and0-11 |
Message To Our Stockholders
Dear Stockholder:
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You are cordially invited to attend the
The Annual Meeting webcast may be attended by company stockholders and others by visiting the following website at the designated time: www.virtualshareholdermeeting.com/
To be admitted to the Annual Meeting webcast at the website provided above, holders of Paramount Class A Common Stock and Paramount Class B Common Stock should enter the 16-digit control number found on their Notice of Internet Availability of Proxy Materials, proxy card or voting instruction card, as applicable. Any others may attend the meeting as a guest by following the instructions provided on the Annual Meeting website.
As always, we encourage holders of Class A Common Stock to submit their proxy and vote their shares prior to the Annual Meeting. Class A stockholders may vote in advance of the meeting by telephone or through the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials or in the
Holders of Class A Common Stock and Class B Common Stock may submit questions in advance of the meeting, from 9:00 a.m., Eastern Daylight Time, on
National Amusements, Inc., which as of
If you have elected to receive printed copies of our proxy statements, annual reports and other materials relating to the Annual Meeting and want to elect to receive these documents electronically next year instead of by mail, please go to http://enroll.icsdelivery.com/para and follow the instructions to enroll. We highly recommend that you consider electronic delivery of these documents as it helps to lower our costs and reduce the amount of paper mailed to your home.
We appreciate your interest in and support of Paramount and look forward to your participation at the Annual Meeting.
Sincerely,
Robert M. Bakish President and Chief Executive Officer |
Key Strategic and
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• Paramount Pictures released
• CBS finished the
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Notice of 20232024 Annual Meeting of Stockholders
To Paramount Global Stockholders:
The
The principal business of the Annual Meeting will be the consideration of the following matters:
1 The election of
2 The ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for fiscal year
3
4
5 A stockholder proposal, if properly presented at the meeting, requesting that our Board of Directors take steps to adopt a policy
6 A stockholder proposal, if properly presented at the meeting, requesting
7 Such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
For a period of at least 10 days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will be open to the examination of any stockholder during ordinary business hours by calling Investor Relations at 1-877-227-0787. In addition, a complete list of stockholders entitled to vote at the Annual Meeting will be open to the examination of any stockholder during the meeting by following the instructions on the Annual Meeting website once they enter the meeting.
By order of the Board of Directors,
Christa A. D’Alimonte Executive Vice President, General Counsel and Secretary
April 22, 2024 |
Meeting Information
Date and time:
at 9:00 a.m. EDT
Website: www.virtualshareholdermeeting.com/
Record date:
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Table of Contents
| PARAMOUNT GLOBAL |
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Paramount Global
20232024 Proxy Statement
Proxy Statement Highlights
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement before voting.
20232024 ANNUAL MEETING OF STOCKHOLDERS
The 20232024 Annual Meeting of Stockholders (the “Annual Meeting”) of Paramount Global (“we,” “us,” “our,” “Paramount” or the “Company”) will be held by live webcast at the date, time and website noted below.
Date and time:
9:00 a.m. EDT
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Website: www.virtualshareholdermeeting.com/ |
Record date:
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HOW TO VOTE
If you are a stockholder of record, you may vote during the Annual Meeting by following the instructions on the Annual Meeting website once you enter the meeting, or by proxy using any of the following methods:
| By Internet:
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| By mail:
If you receive a paper copy of the proxy materials, you may also vote by completing, signing, dating and returning the proxy card by mail. | ||||
| By telephone:
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Votes submitted by Internet or phone must be received by 11:59 p.m., Eastern Daylight Time, on May 7, 2023.June 3, 2024. Votes submitted by mail must be received prior to the Annual Meeting. Please see “Voting and Solicitation of Proxies” for detailed voting instructions.
VOTING MATTERS AND BOARD RECOMMENDATIONS
| Item | Description | Board Vote Recommendation | Page Reference (for more detail) | |||||||||
| Item | Description | Board Vote Recommendation | Page Reference (for more detail) | |||||||||
| 1 | ||||||||||||
| 1 | The election of 11 directors | FOR each of the director nominees | 25 | The election of the seven nominated directors | FOR each of the director nominees | 26 | ||||||
| 2 | The ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for fiscal year 2023 | FOR | 36 | |||||||||
| 2 | The ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for fiscal year 2024 | FOR | 33 | |||||||||
| 3 | An advisory (non-binding) vote on the compensation of the Company’s named executive officers, as disclosed in this proxy statement | FOR | 77 | |||||||||
| 3 | The amendment and restatement of the Company’s 2009 Long-Term Incentive Plan (the “LTIP”), primarily to increase the number of shares of our Class B Common Stock authorized for issuance under the plan | FOR | 76 | |||||||||
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PROXY STATEMENT HIGHLIGHTS
| Item | Description | Board Vote Recommendation | Page Reference (for more detail) | |||||||||
| Item | Description | Board Vote Recommendation | Page Reference (for more detail) | |||||||||
| 4 | ||||||||||||
| 4 | An advisory (non-binding) vote on the frequency of holding the advisory (non-binding) vote on the compensation of the Company’s named executive officers (every one year, two years or three years) | THREE YEARS | 78 | The amendment and restatement of the Company’s Certificate of Incorporation (the “Charter”), primarily to provide for officer exculpation under Delaware law | FOR | 83 | ||||||
| 5 | A stockholder proposal requesting that our Board of Directors take steps to adopt a policy ensuring that the Board Chair is an independent director | AGAINST | 80 | |||||||||
| 5 | A stockholder proposal, if properly presented at the meeting, requesting that our Board of Directors take steps to adopt a policy to require stockholder approval of certain “golden parachute” compensation packages | AGAINST | 84 | |||||||||
| 6 | A stockholder proposal requesting semiannual disclosure of detailed electoral contributions data | AGAINST | 82 | |||||||||
| 6 | A stockholder proposal, if properly presented at the meeting, requesting that the Company prepare and disclose a “transparency report” regarding its use of artificial intelligence | AGAINST | 87 | |||||||||
HOW TO SUBMIT QUESTIONS
Holders of Class A Common Stock and Class B Common Stock may submit questions in advance of the meeting, from 9:00 a.m., Eastern Daylight Time, on April 24, 2023May 22, 2024 until 5:00 p.m., Eastern Daylight Time, on May 3, 2023,29, 2024, by visiting www.proxyvote.com, entering their 16-digit control number and following the instructions. Holders of Class A Common Stock and Class B Common Stock may also submit questions during the meeting and will find instructions for doing so on the Annual Meeting website once they enter the meeting.
BOARD AND GOVERNANCE HIGHLIGHTS
Board of Directors: Nominees for Election
Our 11seven director nominees (ten of whom are current members of our Board of Directors (the “Board of Directors” or “Board”)), and, as a group, have extensive and diverse leadership and subject matter experience and knowledge that is important to us. Our nominees include eightfive independent directors. Effective as of the Annual Meeting, the size of the Board will be reduced to seven directors.
Name | Age | Director Since | Career Highlights | Independent Director | Standing Committee Memberships | |||||||||||||||
Name | Age | Director Since | Career Highlights | Independent Director | Standing Committee | |||||||||||||||
Shari E. Redstone† | ||||||||||||||||||||
Shari E. Redstone† | 68 | 1994 | Chairperson, Chief Executive Officer and President of National Amusements, Inc. and Co-Founder and Managing Partner of Advancit Capital | |||||||||||||||||
Robert M. Bakish | 59 | 2019 | President and Chief Executive Officer, Paramount Global | |||||||||||||||||
Barbara M. Byrne | 68 | 2018 | Former Vice Chairman, Investment Banking at Barclays PLC | ✓ | AC* | 69 | 2018 | Former Vice Chairman, Investment Banking at Barclays PLC | ✓ | AC* | ||||||||||
Linda M. Griego | 75 | 2007 | President and Chief Executive Officer of Griego Enterprises, Inc. | ✓ | CC | 76 | 2007 | President and Chief Executive Officer of Griego Enterprises, Inc. | ✓ | CC | ||||||||||
Robert N. Klieger | 51 | 2017 | Partner at Hueston Hennigan LLP | |||||||||||||||||
Judith A. McHale | 76 | 2019 | President and Chief Executive Officer of Cane Investments, LLC | ✓ | AC; CC* | 77 | 2019 | President and Chief Executive Officer of Cane Investments, LLC | ✓ | AC; CC* | ||||||||||
Dawn Ostroff | 62 | N/A | Former Chief Content and Advertising Business Officer of Spotify | ✓ | N/A | |||||||||||||||
Charles E. Phillips, Jr. | 63 | 2019 | Co-Founder and Managing Partner of Recognize | ✓ | NG | 64 | 2019 | Co-Founder and Managing Partner of Recognize | ✓ | NG | ||||||||||
Susan Schuman | 63 | 2018 | Executive Chair and Co-Founder of SYPartners LLC and Vice Chair of kyu Collective | ✓ | NG | 65 | 2018 | Executive Chair and Co-Founder of SYPartners LLC and Vice Chair of kyu Collective
| ✓ | NG* | ||||||||||
Nicole Seligman | 66 | 2019 | Former President of Sony Entertainment, Inc. | ✓ | NG* | |||||||||||||||
Frederick O. Terrell | 68 | 2018 | Senior Advisor, Centerbridge Partners, L.P. | ✓ | AC | |||||||||||||||
AC = Audit Committee
CC = Compensation Committee
NG = Nominating and Governance Committee
* = Committee Chair
† = Non-Executive Chair of the Board
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PROXY STATEMENT HIGHLIGHTS
Director Nominee Composition
EXECUTIVE COMPENSATION HIGHLIGHTS
Compensation Philosophy and Objectives
We designed our executive compensation programs to motivate and reward business success and to increase shareholder value, based on the following core objectives:
Pay for Performance Ensure plans provide reward levels that reflect variances between actual and desired performance results.
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Flexible Enable management and the Board to make decisions based on the needs of the business and to recognize different levels of individual contribution.
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Market Competitive Consider compensation programs of our peers in order to attract and retain the talent needed to drive sustainable competitive advantage and deliver value to shareholders.
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Focused on Shareholder Value Align executives’ interests with shareholder interests, with particular emphasis on creating incentives that reward executives for consistently increasing the value of Paramount. | ||||
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PROXY STATEMENT HIGHLIGHTS
Pay for Performance
We believe that those executives with significant responsibility and a greater ability to influence our results should have a significant portion of their total compensation tied directly to business results, and we have continued to shift our executive compensation packages to further emphasize performance-based compensation that is aligned with our business and operational strategy. Accordingly, a high percentage of our named executive officers’officers (“NEOs”) and other senior executives’ total target compensation is “at risk” – meaning that we do not intend for them to receive targeted pay amounts if performance does not meet expectations. For 2022, the Compensation Committee increased the percentage of Mr. Bakish’s and our other NEOs’ long-term equity incentive awards that was delivered in performance share units to 50% and 35%, respectively.
Consistent with this philosophy, our performance-based compensation programs provide for the opportunity to reward NEOs and other senior executives for contributing to annual financial and operational performance (through annual bonusincentive programs) and stock price appreciation (through long-term equity incentives). The only fixed component of pay is annual base salary. Annual cash incentive awards and long-term equity incentive awards are subject to companyCompany performance and/or stock price performance.
As illustrated below, approximately 90% of Mr. Bakish’s total target compensation as of December 31, 20222023 was at risk and thus strongly linked to our results.
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Voting and Solicitation of Proxies
SOLICITATION OF PROXIES
A proxy is being solicited by our Board of Directors for use at the Annual Meeting. The close of business on March 13, 2023April 12, 2024 is the record date for determining the record holders of our Class A Common Stock, par value $0.001 per share, entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. Holders of our non-voting Class B Common Stock, par value $0.001 per share, are not entitled to vote at the Annual Meeting or any adjournment or postponement thereof.
As of March 13, 2023,April 12, 2024, we had outstanding 40,704,34140,702,775 shares of our Class A Common Stock, with each of such shares entitled to one vote, and 610,765,722625,768,451 shares of our non-voting Class B Common Stock (together with our Class A Common Stock, our “Common Stock”).
INTERNET AVAILABILITY OF PROXY MATERIALS
In accordance with SECSecurities and Exchange Commission (“SEC”) rules, instead of mailing to stockholders a printed copy of our proxy statement, annual report and accompanying letter to stockholders (the “proxy materials”), we intend to mail to stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”), which advises that the proxy materials are available on the Internet. We intend to commence our distribution of the Notice of Internet Availability on or about March 22, 2023.April 23, 2024. Stockholders receiving a Notice of Internet Availability by mail will not receive a printed copy of proxy materials, unless they so request. Instead, the Notice of Internet Availability will instruct stockholders as to how they may access and review the proxy materials on the Internet.
Stockholders who receive a Notice of Internet Availability by mail whoand would like to receive a printed copy of our proxy materials, including a proxy card or voting instruction card, should follow the instructions for requesting these materials included in the Notice of Internet Availability. Stockholders who currently receive printed copies of proxy materials whoand would like to receive future copies of these documents electronically instead of by mail should follow the instructions for requesting electronic delivery set forth in the “Other Matters” section of this proxy statement.
SUBMISSION OF PROXIES
Each of Robert M. Bakish, our President and Chief Executive Officer, and Christa A. D’Alimonte, our Executive Vice President, General Counsel and Secretary (the “proxy holders”), individually and with the power to appoint his or her substitute, has been designated by our Board of Directors to vote the shares represented by proxy at the Annual Meeting. They will vote the shares represented by each valid and timely received proxy in accordance with the stockholder’s instructions, or if no instructions are specified, in accordance with the recommendations of the Board as described in this proxy statement. If any other matter properly comes before the Annual Meeting, the proxy holders will vote on that matter in their discretion.
Holders of record of our Class A Common Stock as of March 13, 2023April 12, 2024 may submit a proxy in the following ways:
| • | By Internet: Holders of record may access www.proxyvote.com and follow the online instructions. The Internet proxy must be received no later than 11:59 p.m., Eastern Daylight Time, on |
| • | By Telephone: Holders of record living in the United States or Canada may use any touch-tone telephone to call 1-800-690-6903 and follow the recorded instructions. The telephone proxy must be received no later than 11:59 p.m., Eastern Daylight Time, on |
By Mail: Holders of record who received a printed copy of the proxy materials may complete, sign and date the proxy card and return it in the envelope provided, so that it is received prior to the Annual Meeting.
“Beneficial holders” (defined below) will receive voting materials, including instructions on how to vote, directly from their broker or other nominee as the holder of record.
Shares Held in our 401(k) Plan. Voting instructions relating to shares of our Class A Common Stock held in our 401(k) plan must be received no later than 11:59 p.m., Eastern Daylight Time, on May 3, 202330, 2024, so that the trusteestrustee of the plan
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VOTING AND SOLICITATION OF PROXIES
(who votevotes the shares on behalf of the respective plan participants) havehas adequate time to tabulate the voting instructions. Shares held in the 401(k) plan that are not voted or for which the trustees dotrustee does not receive timely voting instructions will be voted by the trusteestrustee in the same proportion as the shares held in the plan that are timely voted.
Voting Other than by Proxy. While we encourage holders of our Class A Common Stock to vote by proxy, holders of our Class A Common Stock (other than shares held in the 401(k) plan) also have the option of voting their shares during the Annual Meeting by following the instructions on the Annual Meeting website once they enter the meeting. Some holders of our Class A Common Stock hold their shares in “street name” through a broker or other nominee and are therefore known as “beneficial holders.” Beneficial holders should follow the voting instructions provided to them by their broker or other nominee in order to vote during the Annual Meeting.
REVOCATION OF PROXIES
A proxy may be revoked before the voting deadline (i) by sending written notice to Proxy Services, P.O. Box 9111, Farmingdale, NY 11735-9543, (ii) by timely submission (including telephonic or Internet submission as described above) of a proxy bearing a later date than the proxy being revoked or (iii) by voting during the Annual Meeting. Revocations made by telephone or through the Internet must be received by 11:59 p.m., Eastern Daylight Time, on MayJune 7, 20233, 2024. Beneficial holders should follow the voting instructions provided to them by their broker or other nominee in order to revoke their proxy or change their vote.
Shares Held in our 401(k) Plan. Voting instructions relating to shares of our Class A Common Stock held in our 401(k) plan may be revoked prior to 11:59 p.m., Eastern Daylight Time, on May 3, 202330, 2024, by timely submission (including telephonic or Internet submission as described above) of revocation or of voting instructions bearing a later date than the voting instructions being revoked to Proxy Services, P.O. Box 9111, Farmingdale, NY 11735-9543.
QUORUM
Under our Amended and Restated Bylaws, the holders of a majority of the aggregate voting power of our Class A Common Stock outstanding on the record date, present in person or represented by proxy at the Annual Meeting, will constitute a quorum. Abstentions and broker non-votes will be treated as present for purposes of determining the presence of a quorum.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
The principal business of the Annual Meeting will be the consideration of the following matters:
| 1. | The election of |
| 2. | The ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm (“independent auditor”) for fiscal year |
| 3. |
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| 4. |
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| 5. | A stockholder proposal, if properly presented at the meeting, requesting that our Board of Directors take steps to adopt a policy |
| 6. | A stockholder proposal, if properly presented at the meeting, requesting |
The Board recommends a vote FOR matters 1, 2, and 3 THREE YEARS on matterand 4, and AGAINST matters 5 and 6.
The affirmative vote of the holders of a majority of the aggregate voting power of our Class A Common Stock entitled to vote and present in person or represented by proxy at the Annual Meeting is required to elect each of the nominated directors and to determine Items 2, 5each of the remaining voting items, other than Item 4. The affirmative vote of the holders of a majority of our Class A Common Stock outstanding on the record date is required to approve the amendment and 6. Items 3 and 4 are advisory votes only and are not binding. Notwithstanding the advisory naturerestatement of these votes, as discussed under “Item 3” and “Item 4” below, the Board will consider the voting outcomes when making determinations regarding these matters.our Charter (Item 4). An abstention with respect to matters 1, 2, 3, 5 and 6any voting item will have the effect of a vote against such matter, and an abstention with respect to matter 4 will not have an effect on the outcome of that matter.item.
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VOTING AND SOLICITATION OF PROXIES
Under the listing standardsrules of the Nasdaq stock market (“Nasdaq”), a broker or other nominee holding shares of our Class A Common Stock on behalf of a beneficial holder may not be permitted to exercise voting discretion with respect to some matters to be acted upon at stockholders’ meetings. Therefore, if a beneficial holder does not give the broker or nominee specific voting instructions, the holder’s shares may not be voted on those matters and a broker non-vote will occur. Under the Nasdaq listing standards,rules, brokers or nominees may vote on Item 2, but not on Items 1, 3, 4, 5 and 6, if they do not receive instructions from the beneficial holder of the shares held in street name. A broker non-vote is not treated as a vote on, and will therefore have no effect on the voting results for, Items 1, 3, 4, 5 and 6. A broker non-vote on Item 4 will have the effect of a vote against Item 4.
As of March 13, 2023,April 12, 2024, National Amusements, Inc. (“National Amusements”) beneficially owned, directly and indirectly through a wholly-owned subsidiary, approximately 77.4% of our outstanding Class A Common Stock and approximately 9.7%9.5% of our outstanding Class A Common Stock and Class B Common Stock on a combined basis. Shari Redstone, Chairperson, Chief Executive Officer and President of National Amusements, is our non-executive Board Chair. National Amusements has advised us that it intends to vote all of its shares of our Class A Common Stock in accordance with the recommendations of the Board on Items 1, 2, 3, 4, 5 and 6.all of the voting items. Such action by National Amusements will be sufficient to constitute a quorum and to determine the outcomes of Items 1, 2, 3, 4, 5 and 6each of the voting items in accordance with the Board’s recommendations.
HOW TO SUBMIT QUESTIONS
Holders of Class A Common Stock and Class B Common Stock may submit questions in advance of the meeting, from 9:00 a.m., Eastern Daylight Time, on April 24, 2023May 22, 2024 until 5:00 p.m., Eastern Daylight Time, on May 3, 2023,29, 2024, by visiting www.proxyvote.com, entering their 16-digit control number and following the instructions. Holders of Class A Common Stock and Class B Common Stock may also submit questions during the meeting and will find instructions for doing so on the Annual Meeting website once they enter the meeting.
COST OF PROXY SOLICITATION AND INSPECTOR OF ELECTION
We will pay the cost of the solicitation of proxies, including the preparation, printing and mailing of the Notice of Internet Availability and the proxy materials. We will furnish copies of the Notice of Internet Availability and, if requested, the proxy materials to banks, brokers, fiduciaries and custodians that hold shares on behalf of beneficial holders so that they may forward the materials to the beneficial holders.
American Election Services, LLC will serve as the independent inspector of election for the Annual Meeting.
MAILING ADDRESS
Our mailing address is 1515 Broadway, New York, NY 10036.
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Corporate Governance
Our corporate governance practices are established and reviewed by our Board of Directors. The Board, with assistance from its Nominating and Governance Committee, regularly assesses our governance practices in light of legal and regulatory requirements, input from our stakeholders and governance best practices. In several areas, our practices go beyond the requirements of the Nasdaq listing standards.rules. For example, despite being a “controlled company” (i.e., a company of which more than 50% of the voting power is held by an individual or another company), we have a majority of independent directors on our Board and entirely independent Board committees, including an independent Compensation Committee and an independent Nominating and Governance Committee, although not required for controlled companies under the Nasdaq listing standards.rules. Our Audit Committee is also entirely independent.
Our principal governance documents are as follows:
Corporate Governance Guidelines
Board Committee Charters:
Audit Committee Charter
Compensation Committee Charter
Nominating and Governance Committee Charter
Global Business Conduct Statement
Supplemental Code of Ethics for Senior Financial Officers
These documents are available on the “Investors—Corporate Governance & ESG” page of our website at ir.paramount.com, and copies of these documents may be requested by writing to Investor Relations, Paramount Global, 1515 Broadway, New York, New York 10036. We encourage our stockholders to read these documents, as we believe they illustrate our commitment to good governance practices. Certain key provisions of these documents are summarized below.
CORPORATE GOVERNANCE GUIDELINES
Our Corporate Governance Guidelines (the “Guidelines”) set forth our corporate governance principles and practices on a variety of topics, including the responsibilities, composition and functioning of the Board, director qualifications and the roles of the Board Committees. The Guidelines are periodically reviewed and updated as needed. The Guidelines provide, among other things, that:
A majority of the members of the Board must be independent of the Company, as independence is determined under the Nasdaq listing standardsrules, by the SEC and under the additional standards set forth in the Guidelines;
Each of our Committees must be comprised entirely of independent directors;
| • | Separate executive sessions of the non-management directors and independent directors must be held a minimum number of times each year; |
The Board, acting on the recommendation of the Nominating and Governance Committee, will determine whether a director candidate’s service on more than three other public company boards of directors is consistent with service on our Board;
Director compensation will be established in light of the policies set forth in the Guidelines;
Within three years of joining the Board, directors are expected to own shares of our Common Stock having a market value of at least five times the annual cash retainer paid to them, in accordance with the Guidelines;
| • | Director tenure and retirement will be considered on a case-by-case basis depending on factors such as the director’s age, experience, qualifications, performance and history of service on the Board; |
Each of the Board and its Committees will hold an annual self-evaluation to assess its effectiveness; and
| • | The Compensation Committee and the Nominating and Governance Committee will together review, at least annually, management succession planning and report to the non-management directors on these reviews. |
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CORPORATE GOVERNANCE
BOARD COMMITTEE CHARTERS
Each standing Board Committee operates under a written charter that has been adopted by the Board. We have three standing Committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. The Committee charters set forth the purpose, objectives and responsibilities of the respective Committee and discuss matters such as Committee membership requirements, number of meetings and the setting of meeting agendas. The charters are required to be assessed annually, in accordance with the Guidelines, and are updated as needed. More information on the Committees, their respective roles and responsibilities and their charters can be found under “Our Board of Directors — Board Committees.”
GLOBAL BUSINESS CONDUCT STATEMENT
Our Global Business Conduct Statement (“BCS”) sets forth our standards for ethical conduct required of all of our directors and employees. The BCS is available on the “Investors—Corporate Governance & ESG” page of our website at ir.paramount.com and on our intranet sites. As part of our compliance and ethics program, we distribute the BCS to our employees and directors and administer an online BCS training program. Directors and full-time employees are required to certify as to their compliance with the BCS and, on an ongoing basis, disclose any potential conflicts of interest. The BCS addresses, among other things, topics such as:
Compliance with laws, rules and regulations, including the Foreign Corrupt Practices Act;
Conflicts of interest, including the disclosure of potential conflicts to the Company;
Confidentiality, insider information and trading, and fair disclosure;
Financial accounting and improper payments;
Our commitment to providing equal employment opportunities and a discrimination- and harassment-free workplace environment;
Fair dealing and relations with competitors, customers and suppliers;
Health, safety and the environment; and
Political contributions and payments.
The BCS provides numerous avenues for employees to report potential violations of the BCS or other matters of concern, whether anonymously or with attribution. These avenues include adomestic and international telephone hotline, ahotlines and an affiliated website, andas well as providing for direct communication withsubmission of reports to our compliance officers and lawyers. The BCS also provides that we will protectprohibit retaliation against anyone who makes a good faith report of a potential violation of the BCS and that retaliation against an employee who makes a good faith report will not be tolerated.BCS.
Waivers of the BCS for our executive officers or directors, will beif any, are disclosed on our website at ir.paramount.com or by Form 8-K filed with the SEC.
SUPPLEMENTAL CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS
The Supplemental Code of Ethics is applicable to our President and Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer. The Supplemental Code of Ethics addresses matters specific to those senior financial positions in the Company, including responsibility for the disclosures made in our filings with the SEC, reporting obligations with respect to certain matters and a general obligation to promote honest and ethical conduct within the Company. The senior financial officers are also required to comply with the BCS.
Amendments to or waivers of the Supplemental Code of Ethics for these officers will be disclosed on our website at ir.paramount.com or by Form 8-K filed with the SEC.
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Our Environmental, Social and Governance (ESG) Strategy
Paramount is committed to responsible and sustainable business practices, which strengthen our ability to innovate and better serve our partners, audiences and stockholders. We continue to expand upon our environmental, social and governance (“ESG”) strategy, with the goal of transparently managing and communicating our most material ESG impacts and initiatives.
We are committed to implementing and tracking progress against goals that will position us as a leader in ESG and sustainability. This commitment informs our work to integrate ESG into the way we do business and better understand our ESG impacts as a company and across our global brands.
HOW WE MANAGE ESG
Our commitment to ESG starts at the top, with our Board of Directors and senior leadership. The Nominating and Governance Committee of the Board has direct oversight of our handling of ESG matters and regularly considers ESG-related matters at its meetings.
We have a team dedicated to driving our ESG strategy forward and overseeing our annual reporting and responses to ESG inquiries and assessments, which is led by a steering committee that includes our Chief Executive Officer, Chief Financial Officer and General Counsel. We have prioritized transparency and disclosure, particularly of our most material ESG impacts.
Our ESG strategy consists of three pillars: On-Screen Content and Social Impact; Workforce and Culture; and Sustainable Production and Operations. Each of these pillars captures important parts of our business and the way we operate. As we develop and publish ESG goals in each area, we will continue to ensure these goals are relevant to our business, audiences and shareholders. |   |
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OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) STRATEGY
OUR ESG COMMUNICATIONS
InParamount’s ESG Reports, published annually since 2020, we conducted and published the resultsprovide our stakeholders with a comprehensive overview of our firstsustainability strategy and progress. The foundation for our ESG strategy is our 2020 Company-wide ESG materiality assessment, to identifywhich identified the most important ESG-related risks and opportunities across our business globally. The results of this materiality assessment informed our ESG strategy, which we also launched in 2020 as part of our first annual comprehensive ESG Report. Our 2020 ESG Report provided our key stakeholders with more detail about our commitment and approach to managing ESG strategically acrossreports highlight progress toward the Company.
In 2021, we continued to make diversity, equity, inclusion and belonging cornerstones of our culture and business. As part of our efforts to build a culture of transparency and accountability, we reported on gender and ethnic diversity across all levels of our organization. More information about these efforts is available on our website at www.paramount.com/inclusion. We also continued to develop measurable and time-boundCompany’s ESG goals, that align with the future of our business and the unique power of our Company and its brands. The 2021 ESG Report disclosed qualitative and quantitative data across several relevant topic areas, including diversity and inclusion, our culture, and our efforts to elevate the importance of sustainable production across the media and entertainment industry.
In 2022, we published our third annual ESG Report, which outlines the Company’s progress toward its ESG goals. The 2022 ESG Report includes updatedyear-over-year workforce and environmental impact data, an overview of the Company’s ESG governance practices, and additional information regarding our efforts to advance diversity and inclusion in front of and behind the camera through the Company’s Office of Global Inclusion and global Content for Change initiative. To learn more about our diversity initiatives, please visit www.paramount.com/inclusion.
Our latest ESG Report, published in September 2023, provides additional information on how the Company engages with its internal and external stakeholders to better understand and address the ESG challenges and opportunities of greatest interest to these groups.
In 2023, we will continue to pursue our Company-wide ESG goals and2024, we are working to identify appropriate ESG-related targetspiloting and goals for several of ourexpanding ESG initiatives across various brands and business units. To further integrate these targets and goals
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OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) STRATEGY
across our operations, we are leveragingWe will continue to leverage our ESG governance structure to pilotenhance the management of our most material environmental and expand ESG initiatives across the organization, which will help us advance what matters most to our business. We will continue to report on our material ESG-related risks and opportunities and progress towards our targets and goals, including our diversity and workforce engagement initiatives, our climate change-related disclosures, and our approach to understanding and managing our ESGsocial impacts.
To learn more about Paramount’s ESG efforts and to view our materiality assessment and ESG reports, please visit: www.paramount.com/sustainability.
OUR POLICIES AND PRACTICES CONCERNING POLITICAL ACTIVITY
We believe that civic engagement and participation in the political process are important to our business, our stakeholders and our country. Public policy decisions often have a significant impact on our business, and we believe that being involved in the political process is important to our success. We are committed to participatingparticipate in the political process to promote our interests and business objectives without regard to the personal political beliefs of our employees’employees or our directors’ political beliefs.directors. We therefore, support candidates seeking elected office at all levels of government who support issuescan help advance policies important to Paramount’s business, including those related to intellectual property, copyright, tax and foreign trade issues.trade.
We believe that our governance practices regarding Company political activity are robust and that our current disclosures allow stockholders and other stakeholders to understand these priorities and practices. Our Nominating and Governance Committee periodically reviews our policies and practices regarding political expenditures and contributions.
Our BCS applies to all Paramount employees and directors and contains policies governing political contributions, lobbying and personal political activities. Compliance with the BCS is overseen by our Compliance team and, with respect to the policies relating to political activities, our Government Relations team. Our Audit Committee is responsible for reviewing the BCS at least biennially. As noted below, all political contributions and activities by Paramount must be approved in advance by Paramount’s Government Relations Office.
Our public policy priorities and strategies,advocacy, political contributions and support of trade association membershipsassociations promote our business objectives and alloware described in our ESG Report, which allows our stockholders and other stakeholders to evaluate our positions for consistency with ourCompany goals and stockholder interests.
State & Local Contributions; Ballot Measures:Measures. Where permitted by law, we may contribute directly to state and local candidates, state party committees and other state and local political entities, as well as toand ballot measure committees. All such Company contributions must be approved in advance by our Government Relations Office. TheseThe contributions are disclosed under applicable laws that requirerequiring recipients of political contributions to discloseprovide the source, date and amount of all contributions received and, in the case of statesuch contributions. State and local contributions to candidates and party committees are also publicly available on the websites of the relevant state agencies for contributions made to state candidates and committees.agencies.
Independent Expenditures; 501(c)(4) Organizations; 527 Committees:Committees. While companies are permitted by law to engage in independent expenditures or electioneering communications to advocate for the election or defeat of federal, state or local candidates, we do not engage directly in such activity at this time. We also do not make donations to 501(c)(4) organizations or 527 Committees at this time. To the extent that we make any such contributions, all such Company contributionsthey must be approved in advance by our Government Relations Office.
Political Action Committee:Committee. As permitted by U.S. law, we have created the Paramount Global Political Action Committee (the “Paramount PAC”) to collect employee donations to contribute to federal candidates and other committees regulated by the Federal Election Commission (the “FEC”). Contributions to federal candidates and committees are made only through the Paramount PAC, in accordance with FEC regulations, and all contributions are managed by our Government Relations Office. To provide funding for the Paramount PAC, we periodically solicit voluntary contributions from eligible
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OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) STRATEGY
employees. We fully disclose all Paramount PAC activity on reports filed with the FEC, which are publicly available on the FEC’s website at https://www.fec.gov./data/committee/C00167759/. The Paramount PAC does not contribute to state or local candidates and committees.
Political Expenditures by Trade Associations:Associations. We are a member of certain trade associations and coalitions, such as the Motion Picture Association, NCTA – the Internet & Television Association, and the National Association of Broadcasters, that we believe can assist us in achieving our long-term strategic goals. Some of these associations and coalitions engage in lobbying and policy advocacy. Payments to these organizations, such asincluding trade association dues, do not imply our agreement with or endorsement of an organization’stheir activities, positions or expenditures, and weexpenditures. We do not know norand do wenot control the amountportion of our payments that aremay be used by these organizations for political contributions.
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Our Board of Directors
Our Board is currently comprised of 1211 members: Robert M. Bakish, Candace K. Beinecke, Barbara M. Byrne, Linda M. Griego, Robert N. Klieger, Judith A. McHale, Ronald L. Nelson,Dawn Ostroff, Charles E. Phillips, Jr., Shari E. Redstone, Susan Schuman, Nicole Seligman and Frederick O. Terrell.
MEETINGS OF THE BOARD
During 2022,2023, the Board held 1017 meetings, and each of our current directors attended at least 75% of the meetings of the Board and Board Committees on which such director served.
In addition to Board and Committee meetings, directors are expected to attend the Annual Meeting and all of theour directors who stood for election in 2022 attended our 20222023 Annual Meeting of Stockholders.
In accordance with the Guidelines and, with respect to the independent director sessions, the Nasdaq listing standards,rules, the non-management directors meet separately without directors who are Company employees, and the independent directors meet separately without directors who are not independent as determined by the Board – in each case, at least two times each year and at such other times as they deem appropriate. The independent Chair of the Nominating and Governance Committee presides at meetings of the independent directors.
DIRECTOR INDEPENDENCE
Our Guidelines provide that a majority of our directors must be independent of the Company, as “independence” is defined in the Nasdaq listing rules, by the SEC and under the additional standards andset forth in the Guidelines. The Nasdaq listing standardsrules set forth six “bright-line” tests that require a finding that a director is not independent if the director fails any of the tests. A Paramount director will not be independent if any of the following relationships exist:
The director is, or has been within the last three years, an employee of Paramount;
A family member of the director is, or has been within the last three years, an executive officer of Paramount;
| • | The director has received, or a family member of the director has received, during any 12-month period within the last three years, more than $120,000 in compensation from Paramount, other than compensation for Board or Committee service, compensation paid to a family member of the director who is an employee (other than an executive officer) of Paramount, or benefits under a tax-qualified retirement plan, or non-discretionary compensation; |
The director is, or has a family member who is, a current partner of our outside auditor, or was a partner or employee of our outside auditor who worked on Paramount’s audit at any time during any of the past three years;
The director is, or has a family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of Paramount have served on the compensation committee of such other entity; or
| • | The director is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which Paramount made, or from which Paramount received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than payments arising solely from investments in Paramount’s securities or payments under non-discretionary charitable contribution matching programs. |
For this purpose, “family member” means the director’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than domestic employees) who shareshares such person’s home.
In addition, the Nasdaq listing standardsrules provide that a director is not independent unless the Board affirmatively determines that the director has no relationship that would impair his or her independence, which we refer to as a “material relationship.”
The Guidelines set forth categorical standards to assist the Board in determining what constitutes a “material relationship” with the Company. Generally, under these categorical standards, the following relationships are deemed not to be material:
The types of relationships identified by the Nasdaq listing standards’rules’ “bright-line” tests, if they occurred more than five years ago (the Board will review any such relationship if it occurred more than three but fewer than five years ago);
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OUR BOARD OF DIRECTORS
| • | A relationship whereby the director has received, or a family member of the director has received for service as an executive officer, $120,000 or less in direct compensation from us during any 12-month period within the last three years, absent other circumstances; and |
A relationship where the director is an executive officer or employee, or an immediate family member of the director is an executive officer, of the following:
| (i) | a company that made payments to, or received payments from, us for property or services in an amount that, in each of the last three fiscal years, is less than 2% of such company’s annual consolidated gross revenues; |
| (ii) | a company that is either indebted to us or a creditor of ours in an amount that is less than 2% of such company’s total consolidated assets; and |
| (iii) | a tax-exempt organization that received contributions from us in the prior fiscal year in an amount less than the greater of $1,000,000 or 2% of that organization’s consolidated gross revenues. |
For relationships that exceed the thresholds in (ii) and (iii) described above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, is made by the directors who are independent. In addition, the Guidelines state that, generally, the types of relationships not addressed by the Nasdaq listing standardsrules or described in the Guidelines will not, by themselves, cause an otherwise independent director to be considered not independent. However, the Board may determine that a director is not independent for any reason it deems appropriate.
In March 2023,April 2024, the Nominating and Governance Committee reviewed the independence of our 12 current directors and of our director nominee who is not currently a member of our Board, to determine its recommendation regarding which of them meet the independence standards outlined above. The Board, based on its review and the recommendation of the Nominating and Governance Committee, determined that nineeight of our 12 current11 directors – Mses. Beinecke, Byrne, Griego, McHale, Ostroff, Schuman and Seligman and Messrs. Nelson, Phillips and Terrell – are independent. The current directors who were not determined to be independent are Ms. Redstone and Messrs. Bakish and Klieger. The Board also determined, based on its review and the recommendation of the Nominating and Governance Committee, that Ms. Ostroff, our director nominee who is not currently a Board member, is also independent.
During its review, in determining that the directors named above are independent, the Board considered that we have, in the ordinary course of business, during the past three years, sold products and services to, and/or purchased products and services from, companies and other entities, of which certain directors are executive officers, principals or employees, and made contributions to a tax-exempt organization of which a director’s immediate family member is an executive officer. The Board determined that all of these transactions were within the parameters for relationships deemed to be immaterial under the Guidelines.
BOARD LEADERSHIP STRUCTURE
Our Board of Directors is currently comprised of the following:
| • | A non-executive Chair of the Board; |
Our President and Chief Executive Officer; and
10Nine other directors, nineeight of whom are independent.
In addition to having a majority independent Board, the Audit, Compensation and Nominating and Governance Committees are composed entirely of independent directors. In support of the independent oversight of management, the non-management directors and, separately, the independent directors routinely hold executive sessions without management present, and Board members have regular access to management across the Company between meetings.
Our Non-Executive Chair of the Board, Shari E. Redstone, presides at all meetings of the Board. Under the Guidelines, her responsibilities also include, together with the Chief Executive Officer and the independent Chair of the Nominating and Governance Committee, developing and approving agendas for Board meetings. The Board believes that Ms. Redstone’s role appropriately reflects both her breadth of experience in the entertainment industry and her ownership position in and role at National Amusements.
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OUR BOARD OF DIRECTORS
BOARD RISK OVERSIGHT
Board of Directors
Our Board of Directors has overall responsibility for the oversight of our risk management processes. The Board carries out its oversight responsibility directly and through the delegation to its Committees of responsibilities related to the oversight of certain risks.
Committees of the Board
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Audit Committee
The Audit Committee is responsible for reviewing our processes and policies with respect to risk assessment, risk management and risk acceptance and receives reports from our Chief Audit Executive on the Company’s strategic risk management program. The Committee regularly discusses risks as they relate to its review of our financial statements, the evaluation of the effectiveness of internal control over financial reporting, compliance with legal and regulatory requirements, and the performance of the internal audit function, among other responsibilities set forth in the Committee’s charter. PricewaterhouseCoopers LLP (“PwC”), our independent auditor, attends Committee meetings and participates in these discussions. The Audit Committee receives regular reports:
• from our Chief Financial Officer and the Chief Accounting Officer on the integrity of internal control over financial reporting;
• from our Chief Technology Officer and our Chief Information Security Officer on our information security program and the management of cybersecurity risk;
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Compensation Committee
The Compensation Committee adopts and periodically assesses the Company’s compensation philosophy, strategy and principles, and monitors risks associated with the design and administration of our performance-based and other compensation programs, to promote an environment that does not encourage unnecessary and excessive risk-taking by our employees. The Committee also reviews risks related to human capital resources, including pay equity, management succession planning (in conjunction with the Nominating and Governance Committee) and the depth of our senior management. ClearBridge Compensation Group LLC (“ClearBridge”), the Committee’s independent compensation consultant, attends Committee meetings and participates in these discussions. |
Nominating and Governance Committee
The Nominating and Governance Committee is responsible for the review of the following risk management processes at the Company: business continuity planning, disaster recovery, crisis management, management succession planning (in conjunction with the Compensation Committee), significant issues impacting our culture and reputation, | ||||||||||||||||||||||||||
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OUR BOARD OF DIRECTORS
• from our Chief Audit Executive on internal audit activities and our internal audit plan for the upcoming fiscal year, the scope of which is to determine the adequacy and function of our risk management, control and governance processes;
• from our General Counsel on employee investigations and our insurance program; and
• from our Chief Compliance Officer on compliance activities.
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For additional information on the Committees’ functions, see “Board Committees.”
Each of these Committees reports regularly to the Board on these risk-related matters, among other items within its purview.
On a regular basis, the Board engages in discussions (which include both internal and external experts) that assist the Board and management in preparing and implementing strategic initiatives. The Board receives regular reports from management that include matters affecting our risk profile, including operations reports from the Chief Executive Officer and from division heads, all of which include strategic and operational risks; reports from the Chief Financial Officer on financial results and projections, credit and liquidity risks and investor relations matters; and reports from the General Counsel on legal and regulatory risk and material litigation.
Outside of formal meetings, Board members have regular access to executives, including the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, the General Counsel and the Chief People Officer. The Committee and management reports and real-time management access collectively provide the Board with integrated insight on our management of risks.
INFORMATION SECURITY AND CYBERSECURITY
The Audit Committee has oversight ofoversees our processes and policies with respect to information security and cybersecurity and, as described above, receives regular reports from the Chief Technology Officer and Chief Information Security Officer. In 2022, the Board and management engaged in a simulated exercise designed to prepare for a potential cybersecurity incident. We also maintain a Cyber Liability insurance program. Additional information about our information security program and the management of cybersecurity risk is available in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our ESG Report on our website at www.paramount.com/sustainability.
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OUR BOARD OF DIRECTORS
BOARD COMMITTEES
The following chart sets forth the current membership of each standing Board Committee. The Board reviews and determines the membership of the Committees at least annually.
Committee | Members | |
Audit Committee | Barbara M. Byrne, Chair Judith A. McHale
Frederick O. Terrell | |
Compensation Committee | Judith A. McHale, Chair Linda M. Griego
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Nominating and Governance Committee |
Charles E. Phillips, Jr. | |
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OUR BOARD OF DIRECTORS
During 2022,2023, the Audit Committee held nineeight meetings, the Compensation Committee held eight12 meetings and the Nominating and Governance Committee held six meetings. Information about these Committees, including their respective roles and responsibilities and charters, is set forth below.
Audit Committee
The Audit Committee Charter provides that the Audit Committee will be comprised of at least three members, except that the Committee is deemed to be properly constituted with at least two members in the event of a vacancy until the Board fills the vacancy. The Charter also provides that all of the members on the Committee must be independent directors. The Committee must have at least one “audit committee financial expert” and one member who is “financially sophisticated” (each as described below), and all Committee members must be able to read and understand fundamental financial statements. The Committee holds at least five regular meetings each year, and it meets separately throughout the year with the independent auditor, our Chief Financial Officer, our Chief Accounting Officer, our General Counsel, our Chief Compliance Officer and our Chief Audit Executive.
The Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee, as well as to retain outside advisors, in its sole discretion. The Committee has the sole authority to retain and terminate any such advisors and to review and approve such advisors’ fees and other retention terms.
The Committee is responsible for the following, among other things:
Reviewing our processes and policies with respect to risk assessment, risk management and risk acceptance;
The appointment, retention, termination, compensation and oversight of our independent auditor, including reviewing with the independent auditor and management the scope of the audit plan and audit fees;
Reviewing our financial statements and related disclosures, including with respect to internal control over financial reporting;
Oversight of our internal audit function;
Oversight of our process and policies with respect to information security and cybersecurity; and
Oversight of our compliance with legal and regulatory requirements.
For additional information on the Committee’s role and its oversight of the independent auditor during 2022,2023, see “Report of the Audit Committee.”
Audit Committee Financial Experts. The Board has determined that each member of the Audit Committee who is also a director nominee, including Ms. Byrne, the Chair of the Audit Committee, Ms. McHale and Mr. Terrell is “financially sophisticated” under Nasdaq listing standardsrules and qualifies as an “audit committee financial expert” as that term is defined in the regulations promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
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OUR BOARD OF DIRECTORS
Compensation Committee
The Compensation Committee Charter provides that the Compensation Committee will be comprised of at least three members, except that the Committee is deemed to be properly constituted with at least two members in the event of a vacancy until the Board fills the vacancy. The Charter also provides that all of the members on the Committee must be independent directors and also “non-employee directors” pursuant to Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Committee holds at least four regular meetings each year, and it regularly meets separately at these meetings with its independent compensation consultant and our Chief People Officer.
The Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee, as well as to retain a compensation consultant and other outside advisors, as it deems appropriate and in accordance with applicable laws and regulations. The Committee has the sole authority to retain and terminate any such advisors and to review and approve such advisors’ fees and other retention terms.
The Committee is responsible for the following, among other things:
Adopting and periodically reviewing our compensation philosophy, strategy and principles regarding the design and administration of our compensation programs;
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OUR BOARD OF DIRECTORS
Reviewing and approving the total compensation packages and the material terms of any new employment, consulting, supplemental retirement and severance arrangements for our executive officers and other senior executives identified by the Committee at least annually after consultation with members of management (collectively, the “specified employees”);
Overseeing the administration of our incentive compensation plans and equity-based compensation plans;
Reviewing key management succession planning (in conjunction with the Nominating and Governance Committee) as contemplated by the Guidelines;
Overseeing an annual risk assessment of our compensation programs; and
Overseeing periodic risk assessmentsthe administration of our compensation programs.clawback policy for senior executives.
Consideration and Determination of Executive Compensation. The Compensation Committee reviews all components of the specified employees’ compensation, including base salary, annual and long-term incentives and other compensatory arrangements. In approving compensation for the specified employees, the Committee considers the input and recommendations of the Chief Executive Officer, the Chief People Officer and any other executive officers to whom those executives report. As described below, the Compensation Committee also considers the input from its independent compensation consultant in making decisions on compensation matters.
The Committee reviews and approves goals and objectives relevant to the compensation of the President and Chief Executive Officer and, together with the Nominating and Governance Committee, annually evaluates his performance in light of those goals and objectives, after considering the input of the non-management directors. The results of this evaluation are then reported to the non-management directors. The Compensation Committee sets the compensation of our President and Chief Executive Officer, taking this evaluation into account, and reports to the Board on this process.
As authorized by its Charter, the Committee has delegated to the President and Chief Executive Officer limited authority to grant long-term incentive awards under our long-term incentive plan to executives who are not specified employees, in connection with their hiring, promotion or contract renewal and to modify certain terms of outstanding equity grants in some post-termination scenarios, as discussed in the “Compensation Discussion and Analysis” section. Any use of this delegated authority is reported to the Committee at its next regularly-scheduledregularly scheduled meeting.
Our processes and procedures for the consideration of executive compensation and the role of our executive officers in determining or recommending the amount or form of executive compensation are more fully described in the “Compensation Discussion and Analysis” section.
The Committee currently retains independent compensation consulting firm ClearBridge Compensation Group LLC to provide expert compensation advice to the Committee in its review of senior executive and other employee compensation. The Committee has the sole authority to retain and terminate the independent compensation consultant and to review and approve the firm’s fees and other retention terms. The Committee maintains a policy requiring that its independent compensation consultant not provide services to the Company other than (i) its services to the Committee and (ii) its services to the Company with respect to the evaluation of non-employee director compensation. ClearBridge did not provide any other services to the Company in 2022.2023. In furtherance of the Committee’s review of our senior executive compensation, the independent consultant examines the compensation practices at companies with which we compete
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OUR BOARD OF DIRECTORS
for senior executive talent, including those companies engaged in similar business activities and other publicly-traded U.S. companies, and provides other analysis, as more fully described in the “Compensation Discussion and Analysis” section. In March 2023,April 2024, the Compensation Committee assessed the independence of ClearBridge and determined that the firm’s work for the Committee did not raise any conflicts of interest.
Nominating and Governance Committee
The Nominating and Governance Committee’s Charter provides that the Nominating and Governance Committee will be comprised of at least three members, except that the Committee is deemed to be properly constituted with at least two members in the event of a vacancy until the Board fills the vacancy. The Charter also provides that all of the members on the Committee must be independent directors. The Committee holds at least three regular meetings each year.
The Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee, as well as to retain outside advisors, in its sole discretion. The Committee has the sole authority to retain and terminate any such advisors and to review and approve such advisors’ fees and other retention terms.
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OUR BOARD OF DIRECTORS
The Committee is responsible for the following, among other things:
Identifying and recommending to the Board nominees for election to the Board and reviewing the composition of the Board as part of this process;
Overseeing all aspects of our corporate governance initiatives, including regular assessments of our principal governance documents;
Establishing criteria and processes for the annual self-evaluations of the Board and its Committees;
Making recommendations to the Board on director compensation matters;
Monitoring developments in the law and practice of corporate governance;
Developing and recommending items for Board meeting agendas;
Reviewing key management succession planning (in conjunction with the Compensation Committee) as contemplated by the Guidelines;
Reviewing transactions between us and related persons;
Overseeing and monitoring significant issues impacting our culture and reputation, as well as our handling of ESG matters;
Periodically reviewing our policies and practices regarding political expenditures and contributions; and
Reviewing the following additional risk management processes and policies at the Company: business continuity planning, disaster recovery and crisis management.
Consideration and Determination of Director Compensation. The Committee annually reviews and recommends for the Board’s consideration the form and amount of compensation for “Outside Directors,” who are directors who are not employees of us or any of our subsidiaries. Only Outside Directors are eligible to receive compensation for serving on the Board, as more fully described in “Director Compensation.”
In accordance with the Guidelines and its Charter, the Committee is guided by three principles in its review of Outside Director compensation: Outside Directors should be fairly compensated for the services they provide to us, taking into account, among other things, the size and complexity of our business and compensation paid to directors of comparable companies; Outside Directors’ interests should be aligned with the interests of stockholders; and Outside Directors’ compensation should be easy for stockholders to understand. Final director compensation determinations are made by the Board.
20232024 Director Nomination Process. In connection with the 20232024 director nomination process, the Nominating and Governance Committee reviewed the current composition of the Board in light of the considerations set forth in its Charter and our Guidelines related to Board composition. In addition, the Committee considered input received from the Board members on Board composition, the directors’ qualifications and any special circumstances that the Committee deemed to be important in its determination. After taking these considerations into account, the Committee determined to recommend to the Board that each of the director nominees set forth in “Item 1 — Election of Directors” be nominated to stand for election at the 20232024 Annual Meeting.
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OUR BOARD OF DIRECTORS
Board Diversity. The Committee considers diversity as part of its review of the composition of the Board. The Committee considers diversity to be a broadly defined concept that takes into account professional experience, gender and ethnicity, among other characteristics. Multiple industries and areas of expertise are represented on the Board, including entertainment and media, banking, legal, technology, information security and management consulting. Additionally, distinguished contributors to governmental and not-for-profit organizations also serve on the Board. Multiple professions are represented among the directors, including current and past experience as principal executive officers, principal financial officers, attorneys, high-ranking government officials, entrepreneurs and television and film executives. The Committee assesses the effectiveness of its consideration of diversity as part of its annual nomination process when it reviews the composition of the Board as a whole.
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OUR BOARD OF DIRECTORS
The following table sets forth certain diversity statistics relating to our current Board members, as required by Nasdaq listing standards:rules:
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Total Number of Directors | 12 | 11 | ||||||||||||||||||||||||||||
| Female | Male | Non-Binary | Did Not Disclose Gender | Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||||||||||||||
Part I: Gender Identity | Part I: Gender Identity |
| Part I: Gender Identity |
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Directors | 7 | 5 | 0 | 0 | 7 | 4 | 0 | 0 | ||||||||||||||||||||||
Part II: Demographic Background | Part II: Demographic Background |
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African American or Black | 0 | 2 | 0 | 0 | 0 | 2 | 0 | 0 | ||||||||||||||||||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Asian | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Hispanic or Latinx | 1 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | ||||||||||||||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
White | 6 | 3 | 0 | 0 | 6 | 2 | 0 | 0 | ||||||||||||||||||||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
LGBTQ+ | 1 | 1 | 0 | 0 | 1 | 1 | 0 | 0 | ||||||||||||||||||||||
Did Not Disclose Demographic Background | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Stockholder Recommendations for Director. The Committee will consider candidates for director recommended by our stockholders. All recommendations by stockholders for potential director candidates must include written materials with respect to the potential candidate and be sent to Christa A. D’Alimonte, Executive Vice President, General Counsel and Secretary, Paramount Global, 1515 Broadway, New York, NY 10036. Our Guidelines and Nominating and Governance Committee Charter set forth certain criteria for director qualifications and Board composition that stockholders should consider when making a recommendation. These criteria include an expectation that directors have substantial accomplishments in their professional backgrounds, are able to make independent, analytical inquiries, and exhibit practical wisdom and mature judgment. Our directors should also possess the highest personal and professional ethics, integrity and values and be committed to promoting the long-term interests of our stockholders. Director candidates recommended by stockholders who meet the director qualifications, which are described more fully in our Guidelines and Nominating and Governance Committee Charter, will be considered by the Chair of the Committee, who will present the information on the candidate to the entire Committee. Director candidates recommended by stockholders will be considered by the Committee in the same manner as any other candidate.
STOCKHOLDER OUTREACH
Our management, including through its investor relations team, conducts stockholder outreach throughout the year to inform our management and Board about the issues that matter most to stockholders. The stockholder outreach efforts include in-person and virtual meetings between management and individual and group investors and management presentations at investor and industry conferences, including question-and-answer sessions, on a regular basis. Our investor relations group also responds to retail investor email and telephone inquiries, providing access to our representatives and a forum for providing feedback. The investor relations team, certain NEOs and/or other members of management and operating executives meet with our largest investors throughout the year, and management reports to the Board regularly on stockholder engagement efforts.
|
OUR BOARD OF DIRECTORS
COMMUNICATIONS WITH DIRECTORS
Stockholders and other parties interested in contacting our non-management directors may send an email to nonmanagementdirectors@paramount.com or write to Paramount Global, 1515 Broadway, New York, NY 10036, Attention: Non-Management Directors – 52nd Floor. The non-management directors’ contact information is also available on the “Investors—Shareholder Services, Alerts, & FAQs” page of our website at ir.paramount.com. Communications sent to the non-management directors are screened by the Corporate Secretary’s office and reported to the non-management directors as appropriate. The non-management directors have approved the process for handling communications received in this manner.
| 20 PARAMOUNT GLOBAL |
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OUR BOARD OF DIRECTORS
Stockholders should also use the email and mailing address for the non-management directors to send communications to the Board. The process for handling stockholder communications to the Board received in this manner has been approved by the independent directors of the Board. Correspondence relating to accounting or auditing matters will be handled in accordance with procedures established by the Audit Committee for such matters.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee during fiscal year 20222023 was, or has ever been, an officer or employee of the Company, and, during fiscal year 2022,2023, no executive officer of the Company served on the board and/or compensation committee of any company that employed as an executive officer any member of our Board and/or Compensation Committee.
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Security Ownership of Certain Beneficial Owners and Management
The table below sets forth as of February 1, 2023March 15, 2024 information concerning the beneficial ownership of our Class A and Class B Common Stock by (i) each current director and director nominee, (ii) each NEO and (iii) our current directors and executive officers as a group. Each person has sole voting and investment power over the shares reported, except as noted. Also set forth below is information concerning the beneficial ownership by each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our Class A Common Stock. As of February 1, 2023,March 15, 2024, there were 40,704,59540,702,775 shares of our Class A Common Stock outstanding and 609,810,905614,081,514 shares of our Class B Common Stock outstanding.
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| Beneficial Ownership of Equity Securities | Beneficial Ownership of Equity Securities | ||||||||||||||||||||||||||||
Name | Title of Security | Number of Shares | Percent of Class | |||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||
Name | Title of Security | Number of Shares | Percent of Class | |||||||||||||||||||||||||||
Robert M. Bakish | ||||||||||||||||||||||||||||||
Robert M. Bakish | ||||||||||||||||||||||||||||||
Robert M. Bakish | ||||||||||||||||||||||||||||||
Robert M. Bakish | ||||||||||||||||||||||||||||||
Robert M. Bakish | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
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| Class B Common | 1,972,556 | (1)(2)(3)(4) | * | ||||||||||||||||||||||||||
Candace K. Beinecke | Class A Common | 10,170 | (5) | * | ||||||||||||||||||||||||||
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| Class B Common | 31,683 | (1)(5) | * | ||||||||||||||||||||||||||
Barbara M. Byrne | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
Barbara M. Byrne | ||||||||||||||||||||||||||||||
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| Class B Common | 30,890 | (1)(4) | * | ||||||||||||||||||||||||||
Barbara M. Byrne | ||||||||||||||||||||||||||||||
Barbara M. Byrne | ||||||||||||||||||||||||||||||
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Naveen Chopra | ||||||||||||||||||||||||||||||
Naveen Chopra | ||||||||||||||||||||||||||||||
Naveen Chopra | ||||||||||||||||||||||||||||||
Naveen Chopra | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
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| Class B Common | 95,507 | (1) | * | ||||||||||||||||||||||||||
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Christa A. D’Alimonte | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
Christa A. D’Alimonte | ||||||||||||||||||||||||||||||
Christa A. D’Alimonte | ||||||||||||||||||||||||||||||
Christa A. D’Alimonte | ||||||||||||||||||||||||||||||
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| Class B Common | 170,744 | (1) | * | ||||||||||||||||||||||||||
Linda M. Griego | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
Linda M. Griego | ||||||||||||||||||||||||||||||
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| Class B Common | 51,030 | (1)(5) | * | ||||||||||||||||||||||||||
Linda M. Griego | ||||||||||||||||||||||||||||||
Linda M. Griego | ||||||||||||||||||||||||||||||
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Robert N. Klieger | ||||||||||||||||||||||||||||||
Robert N. Klieger | ||||||||||||||||||||||||||||||
Robert N. Klieger | ||||||||||||||||||||||||||||||
Robert N. Klieger | Class A Common | 8,159 | (5) | * | ||||||||||||||||||||||||||
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| Class B Common | 33,679 | (1)(5) | * | ||||||||||||||||||||||||||
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Doretha (DeDe) Lea | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
Doretha (DeDe) Lea | ||||||||||||||||||||||||||||||
Doretha (DeDe) Lea | ||||||||||||||||||||||||||||||
Doretha (DeDe) Lea | ||||||||||||||||||||||||||||||
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| Class B Common | 113,086 | (1)(2)(3) | * | ||||||||||||||||||||||||||
Judith A. McHale | Class A Common | 2,895 | (5) | * | ||||||||||||||||||||||||||
Judith A. McHale | ||||||||||||||||||||||||||||||
Judith A. McHale | ||||||||||||||||||||||||||||||
Judith A. McHale | ||||||||||||||||||||||||||||||
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| Class B Common | 32,568 | (1)(5) | * | ||||||||||||||||||||||||||
Ronald L. Nelson | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
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| Class B Common | 38,443 | (1)(5) | * | ||||||||||||||||||||||||||
Dawn Ostroff | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
Dawn Ostroff | ||||||||||||||||||||||||||||||
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| Class B Common | 0 | 0 | |||||||||||||||||||||||||||
Dawn Ostroff | ||||||||||||||||||||||||||||||
Dawn Ostroff | ||||||||||||||||||||||||||||||
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Charles E. Phillips, Jr. | ||||||||||||||||||||||||||||||
Charles E. Phillips, Jr. | ||||||||||||||||||||||||||||||
Charles E. Phillips, Jr. | ||||||||||||||||||||||||||||||
Charles E. Phillips, Jr. | Class A Common | 2,633 | (5) | * | ||||||||||||||||||||||||||
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| Class B Common | 89,023 | (1)(5) | * | ||||||||||||||||||||||||||
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Nancy Phillips | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
Nancy Phillips | ||||||||||||||||||||||||||||||
Nancy Phillips | ||||||||||||||||||||||||||||||
Nancy Phillips | ||||||||||||||||||||||||||||||
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| Class B Common | 43,138 | (1) | * | ||||||||||||||||||||||||||
Shari E. Redstone(6) | Class A Common | 37,365 | (5) | * | ||||||||||||||||||||||||||
Shari E. Redstone(6) | ||||||||||||||||||||||||||||||
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| Class B Common | 471,603 | (1)(4)(5) | * | ||||||||||||||||||||||||||
Shari E. Redstone(6) | ||||||||||||||||||||||||||||||
Shari E. Redstone(6) | ||||||||||||||||||||||||||||||
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Susan Schuman | ||||||||||||||||||||||||||||||
Susan Schuman | ||||||||||||||||||||||||||||||
Susan Schuman | ||||||||||||||||||||||||||||||
Susan Schuman | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
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| Class B Common | 20,548 | (1)(5) | * | ||||||||||||||||||||||||||
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Nicole Seligman | Class A Common | 0 | 0 | |||||||||||||||||||||||||||
Nicole Seligman | ||||||||||||||||||||||||||||||
Nicole Seligman | ||||||||||||||||||||||||||||||
Nicole Seligman | ||||||||||||||||||||||||||||||
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| Class B Common | 30,519 | (1)(4)(5) | * | ||||||||||||||||||||||||||
Frederick O. Terrell | Class A Common | 5,578 | (5) | * | ||||||||||||||||||||||||||
Frederick O. Terrell | ||||||||||||||||||||||||||||||
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| Class B Common | 25,788 | (1)(5) | * | ||||||||||||||||||||||||||
Frederick O. Terrell | ||||||||||||||||||||||||||||||
Frederick O. Terrell | ||||||||||||||||||||||||||||||
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Current directors and executive officers as a group (16 persons) | ||||||||||||||||||||||||||||||
Current directors and executive officers as a group (16 persons) | ||||||||||||||||||||||||||||||
Current directors and executive officers as a group (16 persons) | ||||||||||||||||||||||||||||||
Current directors and executive officers as a group (16 persons) | ||||||||||||||||||||||||||||||
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| 22 PARAMOUNT GLOBAL |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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| Beneficial Ownership of Equity Securities | Beneficial Ownership of Equity Securities | ||||||||||||||||||||||||||||
Name | Title of Security | Number of Shares | Percent of Class | |||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||
Name | Title of Security | Number of Shares | Percent of Class | |||||||||||||||||||||||||||
Current directors and executive officers as a | Class A Common | 66,800 | (5) | * | ||||||||||||||||||||||||||
| Class B Common | 3,365,444 | (1)(2)(3)(4)(5) | * | |||||||||||||||||||||||||||
National Amusements(7)
846 University Avenue Norwood, MA 02062 | ||||||||||||||||||||||||||||||
National Amusements(7)
846 University Avenue Norwood, MA 02062 | ||||||||||||||||||||||||||||||
National Amusements(7)
846 University Avenue Norwood, MA 02062 | ||||||||||||||||||||||||||||||
National Amusements(7)
846 University Avenue Norwood, MA 02062 | ||||||||||||||||||||||||||||||
National Amusements(7)
846 University Avenue |
| Class A Common
Class B Common |
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| 31,500,087
32,012,190 |
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| 77.4
5.2 | %
% |
| Class A Common
Class B Common |
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| 31,500,087
32,012,190 |
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| 77.4
5.2 | %
% | ||||||||||||
Mario J. Gabelli et al.(8) | Class A Common | 3,997,551 | 9.8 | % | ||||||||||||||||||||||||||
Mario J. Gabelli et al.(8) | ||||||||||||||||||||||||||||||
Mario J. Gabelli et al.(8) | ||||||||||||||||||||||||||||||
Mario J. Gabelli et al.(8) | ||||||||||||||||||||||||||||||
Mario J. Gabelli et al.(8) | Class A Common | 5,099,516 | 12.5 | % | ||||||||||||||||||||||||||
GAMCO Investors, Inc. One Corporate Center Rye, NY 10580-1435 |
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GAMCO Investors, Inc. One Corporate Center Rye, NY 10580-1435 | ||||||||||||||||||||||||||||||
GAMCO Investors, Inc. One Corporate Center Rye, NY 10580-1435 | ||||||||||||||||||||||||||||||
GAMCO Investors, Inc. One Corporate Center Rye, NY 10580-1435 | ||||||||||||||||||||||||||||||
GAMCO Investors, Inc. One Corporate Center Rye, NY 10580-1435 |
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| * | Represents less than 1% of the outstanding shares of the class. |
| (1) | Includes the following shares of Class B Common Stock that the indicated person had the right to acquire on or within 60 days from |
| (2) | Includes the following shares of Class B Common Stock held through our 401(k) plan as of |
| (3) | Includes the following Class B Common Stock phantom units credited pursuant to, as applicable, our supplemental 401(k) plans or bonus deferral plans as of |
| (4) | Includes the following |
| (5) | Includes (a) the following Class A Common Stock phantom units and Class B Common Stock phantom units credited pursuant to the Director Deferred Compensation Plans (as defined below): |
| (6) | Ms. Redstone is a stockholder of National Amusements and has a minority indirect beneficial interest in the Company’s Class A Common Stock and Class B Common Stock owned by National Amusements (and |
| (7) | These shares are owned by National Amusements and |
Based on information received from National Amusements, National Amusements has pledged to its lenders a portion of shares of our Class A Common Stock and Class B Common Stock owned directly or indirectly by National Amusements. As of |
| (8) | The information concerning Mario J. Gabelli et al. is based upon a Schedule 13D/A filed with the SEC on |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
| on the Schedule 13D/A: Gabelli Funds, LLC (“Gabelli Funds”), |
DELINQUENT SECTION 16(A) REPORT
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of our Class A or Class B common stock to file reports of ownership and changes in ownership with the SEC. Such persons are required by the Exchange Act to furnish us with copies of all Section 16(a) forms they file. According to information received from National Amusements, the Form 4 filing for National Amusements dated December 27, 2023, to report the issuance of a warrant for 700,000 shares of the Company’s Class B common stock, was inadvertently filed late, on January 3, 2024, due to an administrative error.
| 24 PARAMOUNT GLOBAL |
|
Related Person Transactions
REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS
The Board has a written policy whereby the Nominating and Governance Committee reviews and approves, ratifies or takes other actions it deems appropriate with respect to related person transactions, as defined under the rules of the SEC. Under the policy, the Committee shall approve only related person transactions that are in, or are not inconsistent with, the best interests of the Company and its stockholders, as the Committee determines in good faith. In its review, the Committee considers the importance of the transaction to the Company and the related person; the related person’s relationship with the Company and interest in the transaction; the terms of the transaction, including the dollar amount involved; the impact on a director’s independence if the transaction involves a director; the availability of other sources of comparable products or services; whether the transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally; and any other information the Committee deems appropriate.
Any member of the Committee who is a related person with respect to a transaction under review may not participate in the review or vote respecting the transaction; however, that person may be counted in determining the presence of a quorum at a meeting of the Committee that considers the transaction.
Under the policy, management is primarily responsible for determining whether a related person has a direct or indirect material interest in a transaction with the Company. The determination will be made after a review of information obtained from the related person and information available from our records. Our legal and controller’s groups are responsible for establishing and maintaining policies and procedures to ensure implementation of the policy across the Company.
TRANSACTIONS WITH NATIONAL AMUSEMENTS
National Amusements licenses films in the ordinary course of business for its motion picture theaters from all major studios, including Paramount Pictures. Payments made to us in connection with these licenses for fiscal year 20222023 amounted to approximately $14,309,000$8,825,000 and are continuing in fiscal year 20232024 as a result of this ongoing relationship. National Amusements also licenses films from a number of unaffiliated companies, and Paramount Pictures expects to continue to license films to National Amusements on similar terms in the future. In addition, National Amusements and Paramount Pictures have had co-op advertising arrangements and occasionally engage in other ordinary course transactions (e.g., movie ticket purchases and various promotional activities) from time to time; Paramount Pictures paid National Amusements approximately $243,000$457,000 in connection with these arrangements in fiscal year 2022.2023. We believe that the terms of these transactions between National Amusements and Paramount Pictures were no more or less favorable to Paramount Pictures than transactions between unaffiliated companies and National Amusements.
OTHER TRANSACTIONS
In November 1995, we entered into an agreement with GAMCO pursuant to which GAMCO manages certain assets for qualified U.S. pension plans sponsored by us. For 2022,2023, we paid GAMCO approximately $228,000$237,000 for such investment management services. We believe that the terms of the agreement with GAMCO are no more or less favorable to us than we could have obtained from unrelated parties. Entities that are affiliated with GAMCO collectively own 3,997,5515,099,516 shares of our Class A Common Stock, according to a Schedule 13D/A filed with the SEC on September 16, 2022November 3, 2023 by such entities (the latest filing available), which shares, as of March 13, 2023,April 12, 2024, represented approximately 9.8%12.5% of the outstanding shares of the class.
Matthew Jafar, the brother-in-law of Julia Phelps, our Executive Vice President, Chief Communications and Corporate Marketing Officer, is employed by us as Senior Director, Corporate Insights.Vice President, Consumer Intelligence. Mr. Jafar served in his position prior to Ms. Phelps’ appointment to her current role, and Ms. Phelps was not involved in Mr. Jafar’s hiring. Mr. Jafar has never served in Ms. Phelps’ reporting line, and Ms. Phelps is not involved with decisions regarding Mr. Jafar’s compensation. Mr. Jafar received compensation in 20222023 in an amount consistent with the compensation paid to other employees at his level.
|
Item 1 — Election of Directors
The Board of Directors proposes the election of 11seven directors, 10all of whom are current members of our Board. Each director elected at the Annual Meeting will hold office, in accordance with our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, until the next annual meeting or until his or her successor is duly elected and qualified. The Board’s nominees for election are Robert M. Bakish, Barbara M. Byrne, Linda M. Griego, Robert N. Klieger, Judith A. McHale, Dawn Ostroff, Charles E. Phillips, Jr., Shari E. Redstone and Susan Schuman, Nicole Seligman and Frederick O. Terrell.Schuman. All of the nominees except Ms. Ostroff were elected at our 20222023 Annual Meeting of Stockholders. Ms. Ostroff is not currently a member of the Board.
For a description of certain arrangements relating to nominations of directors and the composition of the Board, see “Our Board of Directors — Board Committees — Nominating and Governance Committee.”
If, for any reason, any of the director nominees becomes unavailable for election, the proxy holders may exercise discretion to vote for substitute nominees proposed by the Board. Each of the director nominees has indicated that he or she will be able to serve if elected and has agreed to do so.
Each director nominee for our Board brings a diversity of skills and experiences to his or her service on the Board, as described below.
President and Chief Executive Officer, Director
Age:
Director since: 2019
Committees: • None
| ROBERT M. BAKISH
Mr. Bakish has extensive knowledge and a deep understanding of our business and the entertainment industry as our current President and Chief Executive Officer and through various leadership positions at Viacom spanning approximately 20 years, and has broad expertise overseeing global operations. |
| 26 PARAMOUNT GLOBAL |
|
ITEM 1 — ELECTION OF DIRECTORS
Director
Age:
Director since: 2018
Committees: • Audit Committee (Chair)
| BARBARA M. BYRNE
Ms. Byrne is the former Vice Chairman, Investment Banking at Barclays PLC. Ms. Byrne has served as a director of LanzaTech NZ, Inc. since 2023 and of Carta, Inc. and PowerSchool Holdings, Inc. since 2021. Ms. Byrne previously served as a director of Hennessy Capital Investment Corp. V and Slam Corp. Ms. Byrne also serves as a Lifetime Member of the Council of Foreign Relations, a Trustee of the Institute of International Education, a member of the Investment Committee of Catalyst and a member of the Audit Committee Leadership Network.
During her more than 35 years of financial services experience, Ms. Byrne served as team leader for some of Barclays’ most important multinational corporate clients and was the primary architect of several of Barclays’ marquee transactions. Widely recognized as a leading investment banker and strategic advisor, she is a member of various industry councils and participates as a forum leader on strategic issues and trends facing the financial services sector and global markets. Ms. Byrne has also gained deep experience in audit committee effectiveness and leadership, expertise in risk oversight, and thought leadership in finance through her participation on the boards and investment committees of various non-profit organizations. With this experience, Ms. Byrne brings to the Board important business and financial expertise in its deliberations on complex transactions, risk management, strategy and other financial matters. | |
Director
Age:
Director since: 2007
Committees: • Compensation Committee
| LINDA M. GRIEGO
Ms. Griego has served,
With the breadth of her leadership experience as a businesswoman, in the public sector through her multiple government appointments and extensive community-based participation in Los Angeles, an area where we have a significant presence, and on multiple not-for-profit boards, Ms. Griego provides the Board with financial and business acumen, as well as public policy expertise as it relates to business practices. Ms. Griego is also an experienced director, including through service on other audit, compensation and organization, and nominating and governance committees, with demonstrated expertise in the application of sound corporate governance principles. | |
|
ITEM 1 — ELECTION OF DIRECTORS
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| |
Director
Age:
Director since: 2019
Committees: • Audit Committee • Compensation Committee, Chair
| JUDITH A. MCHALE
Ms. McHale is President and Chief Executive Officer of Cane Investments, LLC, a private investment company, and served as a member of the board of Viacom from August 2016 to December 2019. Prior to joining Cane Investments in 2011, Ms. McHale served as the Under Secretary of State for Public Diplomacy and Public Affairs for the U.S. Department of State from 2009 to 2011. From 2004 to 2006, Ms. McHale served as the President and Chief Executive Officer of Discovery Communications, Inc., the parent company of Discovery Channel, and served as its President and Chief Operating Officer from 1995 to 2004. In 2006, Ms. McHale worked with private equity firm Global Environment Fund to launch the GEF/Africa Growth Fund, an investment vehicle focused on supplying expansion capital to small and medium-sized enterprises that provide consumer goods and services in emerging African markets. She has served on the board of Hilton Worldwide Holdings Inc. since 2013. She previously served on the
Ms. McHale has extensive experience leading a major media conglomerate with a background in operations and financial management, expertise in global affairs, experience in government affairs and extensive public company and corporate governance experience. | |
|
ITEM 1 — ELECTION OF DIRECTORS
|
| |
Director
Age:
Director since: 2019
Committees: • Nominating and Governance Committee
| CHARLES E. PHILLIPS, JR.
Mr. Phillips is a Co-founder and Managing Partner of Recognize, a technology investing and transformation company. Previously, he was Chief Executive Officer of Infor, Inc., a multi-billion dollar enterprise software company, from 2010 until 2019 and Chairman of Infor from 2019 until 2020. Mr. Phillips served on the board of Viacom from January 2006 to December 2019 and, prior to that, on the board of Viacom’s predecessor beginning in 2004. He was a President of Oracle Corporation from 2003 to 2010 and served as a member of its board of directors and executive management committee from 2004 to 2010. Prior to Oracle, Mr. Phillips was a managing director at Morgan Stanley in the Technology Group and served on its board of directors. He has served as a director of American Express Company and Compass, Inc. since 2020, and serves on the boards of the Apollo Theater, the New York City Police Foundation and the Black Economic Alliance. He previously served on the board of Oscar Health, Inc. He served on President Obama’s Economic Recovery Board, led by Paul Volcker, and is a member of the Council on Foreign Relations.
Mr. Phillips has extensive experience as a senior executive in a large, multinational corporation, financial industry background and financial and analytical expertise, significant public company and corporate governance experience, expertise in technology issues and familiarity with issues facing media, new media and intellectual property-driven companies and a deep knowledge of our business. | |
| 28 PARAMOUNT GLOBAL |
|
ITEM 1 — ELECTION OF DIRECTORS
Non-Executive Chair Age: Director since: 1994
Committees: • None
| SHARI E. REDSTONE
Ms. Redstone has been a member of our Board since January 1994 and served on the Viacom board from January 2006 to December 2019. She has served as Non-Executive Chair of our Board since December 2019 and prior to that served as Non-Executive Vice Chair of the Board beginning in June 2005 and Non-Executive Vice Chair of the Viacom board beginning in January 2006.
Ms. Redstone is Co-Founder and Managing Partner of Advancit Capital, an investment firm launched in 2011 that focuses on early stage companies at the intersection of media, entertainment and technology, with investments in over 75 companies. Ms. Redstone has been President of National Amusements since 2000 and Chief Executive Officer since 2020. She also serves on the National Amusements board as its Chairperson. Ms. Redstone serves on the Board of Trustees for the Paley Center for Media and is actively involved in charitable, civic and educational organizations. She is a member of the Board of Trustees of the Dana Farber Cancer Institute. She earned a BS from Tufts University, and a JD and a Masters in Tax Law from Boston University. She practiced corporate law, estate planning and criminal law in the Boston area before joining National Amusements.
Ms. Redstone brings to our Board her extensive experience in and understanding of the entertainment industry, broad experience and talent managing a large business, extensive legal experience and her experience as President of National Amusements, including as one of its significant stockholders. | |
Director
Age:
Director since: 2018
Committees: • Nominating and Governance Committee, Chair
| SUSAN SCHUMAN
Ms. Schuman is the Executive Chair and Co-Founder of SYPartners LLC, a consultancy firm that partners with chief executive officers and their leadership teams undergoing business and cultural transformation, and Vice Chair of the kyu Collective. Ms. Schuman serves on the board of
Over the past 20 years, Ms. Schuman has built and led SYPartners, working with executives at many high-profile companies and organizations. This experience in advising on business, organization and cultural transformation, including new value creation strategies, positions Ms. Schuman as a skilled advisor to the Board on the strategic and transformational direction of the Company. Ms. Schuman’s service on other public company board committees contributes to her broad understanding of public company governance. |
|
ITEM 1 — ELECTION OF DIRECTORS
|
| |
|
ITEM 1 — ELECTION OF DIRECTORS
|
| |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.
|
|
|
Director Compensation
OUTSIDE DIRECTOR COMPENSATION DURING 20222023
The following table sets forth information concerning the compensation of our Outside Directors for 2022.2023.
Name | Fees Earned or (1) | Stock (2) | Change in Pension Value and Compensation Earnings ($) (3) | All Other (4) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||||
Name | ||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Fees Earned or (1) | Stock (2) | Change in Pension Value and Compensation Earnings ($) (3) | All Other (4) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||
Beinecke, Candace K. |
| 110,000 |
| 200,032 |
| 72 |
| 25,000 |
| 335,104 | ||||||||||||||||||||||||||||||||||||||||
Beinecke, Candace K.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beinecke, Candace K.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beinecke, Candace K.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beinecke, Candace K.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beinecke, Candace K.(5) |
| 52,000 |
| 50,017 |
| 118 |
| 25,000 |
| 127,135 | ||||||||||||||||||||||||||||||||||||||||
Byrne, Barbara M. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Byrne, Barbara M. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Byrne, Barbara M. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Byrne, Barbara M. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Byrne, Barbara M. |
| 138,000 |
| 200,032 |
| – |
| 25,000 |
| 363,032 |
| 136,000 |
| 250,033 |
| – |
| 25,000 |
| 411,033 | ||||||||||||||||||||||||||||||
Griego, Linda M. |
| 114,000 |
| 200,032 |
| – |
| 25,000 |
| 339,032 | ||||||||||||||||||||||||||||||||||||||||
Griego, Linda M. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Griego, Linda M. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Griego, Linda M. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Griego, Linda M. |
| 126,000 |
| 250,033 |
| – |
| 25,000 |
| 401,033 | ||||||||||||||||||||||||||||||||||||||||
Klieger, Robert N. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Klieger, Robert N. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Klieger, Robert N. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Klieger, Robert N. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Klieger, Robert N. |
| 100,000 |
| 200,032 |
| 42 |
| 25,000 |
| 325,074 |
| 100,000 |
| 250,033 |
| 84 |
| 25,000 |
| 375,117 | ||||||||||||||||||||||||||||||
McHale, Judith A. |
| 152,000 |
| 200,032 |
| 19 |
| 25,000 |
| 377,051 | ||||||||||||||||||||||||||||||||||||||||
McHale, Judith A. | ||||||||||||||||||||||||||||||||||||||||||||||||||
McHale, Judith A. | ||||||||||||||||||||||||||||||||||||||||||||||||||
McHale, Judith A. | ||||||||||||||||||||||||||||||||||||||||||||||||||
McHale, Judith A. |
| 160,000 |
| 250,033 |
| 30 |
| – |
| 410,033 | ||||||||||||||||||||||||||||||||||||||||
Nelson, Ronald L. |
| 132,000 |
| 200,032 |
| – |
| 25,000 |
| 357,032 | ||||||||||||||||||||||||||||||||||||||||
Nelson, Ronald L.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nelson, Ronald L.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nelson, Ronald L.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nelson, Ronald L.(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nelson, Ronald L.(5) |
| 64,000 |
| 50,017 |
| – |
| – |
| 114,017 | ||||||||||||||||||||||||||||||||||||||||
Ostroff, Dawn | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ostroff, Dawn | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ostroff, Dawn | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ostroff, Dawn | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ostroff, Dawn |
| 74,836 |
| 200,016 |
| – |
| 7,000 |
| 281,852 | ||||||||||||||||||||||||||||||||||||||||
Phillips, Jr., Charles E. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Phillips, Jr., Charles E. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Phillips, Jr., Charles E. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Phillips, Jr., Charles E. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Phillips, Jr., Charles E. |
| 112,000 |
| 200,032 |
| 4,801 |
| – |
| 316,833 |
| 114,000 |
| 250,033 |
| 13,195 |
| – |
| 377,228 | ||||||||||||||||||||||||||||||
Redstone, Shari E. |
| 300,000 |
| 200,032 |
| 202 |
| 25,000 |
| 525,234 | ||||||||||||||||||||||||||||||||||||||||
Redstone, Shari E. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redstone, Shari E. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redstone, Shari E. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redstone, Shari E. |
| 300,000 |
| 250,033 |
| 372 |
| 25,000 |
| 575,405 | ||||||||||||||||||||||||||||||||||||||||
Schuman, Susan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schuman, Susan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schuman, Susan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schuman, Susan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schuman, Susan |
| 112,000 |
| 200,032 |
| – |
| 7,110 |
| 319,142 |
| 126,968 |
| 250,033 |
| – |
| 10,000 |
| 387,001 | ||||||||||||||||||||||||||||||
Seligman, Nicole |
| 132,000 |
| 200,032 |
| – |
| 25,000 |
| 357,032 | ||||||||||||||||||||||||||||||||||||||||
Seligman, Nicole | ||||||||||||||||||||||||||||||||||||||||||||||||||
Seligman, Nicole | ||||||||||||||||||||||||||||||||||||||||||||||||||
Seligman, Nicole | ||||||||||||||||||||||||||||||||||||||||||||||||||
Seligman, Nicole |
| 134,000 |
| 250,033 |
| – |
| 25,000 |
| 409,033 | ||||||||||||||||||||||||||||||||||||||||
Terrell, Frederick O. |
| 116,000 |
| 200,032 |
| 34 |
| 7,500 |
| 323,566 | ||||||||||||||||||||||||||||||||||||||||
Terrell, Frederick O. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Terrell, Frederick O. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Terrell, Frederick O. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Terrell, Frederick O. |
| 116,000 |
| 250,033 |
| 55 |
| – |
| 366,088 | ||||||||||||||||||||||||||||||||||||||||
| (1) | Reflects cash amounts earned by Outside Directors in |
| (2) | Amounts reflect the aggregate grant date fair value determined in accordance with FASB ASC Topic 718 of (i) the one-time transition grant to Outside Directors on March 1, 2023 that allowed us to align the annual grant date with annual director elections beginning in 2023, as described in our 2023 Proxy Statement, and (ii) the annual grant of RSUs to each Outside Director on May 8, 2023, in each case under the 2015 Equity Plan for Outside Directors. For a discussion of the assumptions made in calculating the grant date fair value amounts for |
| (3) | Interest accrues on cash in deferred accounts under the Director Deferred Compensation Plans at the prime rate in effect at Citibank, N.A. at the beginning of each calendar quarter. For |
| (4) | Amounts reflect the aggregate value of all matching contributions made by us on behalf of the director for |
| (5) | Ms. Beinecke and Mr. Nelson ceased to be Outside Directors on May 8, 2023. The grants reflected in the “Stock Awards” column above were unvested at the time of their departure and were forfeited. |
| 30 PARAMOUNT GLOBAL |
|
DIRECTOR COMPENSATION
DESCRIPTION OF DIRECTOR COMPENSATION
Directors who are not employees of the Company or any of its subsidiaries are “Outside Directors” as defined in the director plans described below. Outside Directors receive compensation for their service on the Board and are eligible to participate in these director plans. All of the directors identified in the “Outside Director Compensation During 2022”2023” table above were deemed Outside Directors during 2022.2023. Mr. Bakish was not compensated for serving on the Board and was not eligible to participate in any director plans, other than the Matching Gifts Program for Directors.
|
DIRECTOR COMPENSATION
Cash Compensation
We pay the following cash compensation to Outside Directors:
| • | The Non-Executive Chair of the Board receives an annual Board retainer of $300,000 and all other Outside Directors receive an annual Board retainer of $100,000, in each case payable in equal installments quarterly in advance; |
The Chairs of the Audit, Compensation and Nominating and Governance Committees each receive an annual retainer of $20,000, payable in equal installments quarterly in advance, and the members of those Committees receive a per meeting attendance fee of $2,000; and
The Chairs and members of any ad hoc committees of the Board that may exist from time to time will be paid as determined by the Board.
Deferred Compensation Plan
We maintain deferred compensation plans for Outside Directors (the “Director Deferred Compensation Plans”). Under the Director Deferred Compensation Plans, Outside Directors may elect to defer their Board and Committee chair retainers and Committee meeting fees. Deferred amounts are credited during a calendar quarter to an interest-bearing income account or a stock unit account in accordance with the director’s prior election. Amounts credited to an income account bear interest at the prime rate in effect at the beginning of each calendar quarter. Amounts credited to a stock unit account are deemed invested in phantom units for shares of our Class A Common Stock and Class B Common Stock on the first day of the calendar quarter following the quarter in which the amounts are credited, with the number of shares calculated based on the closing market prices on that first day. Until the amounts credited to the stock unit account are converted into phantom units, these credited amounts bear interest at the prime rate in effect at the beginning of the relevant calendar quarter.
Upon a director’s leaving the Board, the amounts deferred under the Director Deferred Compensation Plans are paid in cash in a lump sum or in three or five annual installments, based on the director’s prior elections, with the lump sum or initial annual installment becoming payable on the later of six months after the director leaves the Board or January 15th of the following year. The value of a stock unit account is determined by reference to the average of the respective closing market prices of our Class A Common Stock and Class B Common Stock on Nasdaq on each trading date during the four-week period ending five business days prior to the initial payment date. Amounts paid in installments accrue interest until the final installment is paid.
|
DIRECTOR COMPENSATION
Equity Compensation
We maintain the 2015 Equity Plan for Outside Directors (the “Director Equity Plan”). Under the Director Equity Plan, Outside Directors receive an annual grant of RSUs and, for Outside Directors who join the Board following the date of the annual RSU grant, and meet the eligibility requirements described below, a pro-rated RSU grant. In consultation with ClearBridge, the Nominating and Governance Committee recommended, and the Board determined, to modify the terms of our Outside Directors’ annual equity compensation, beginning in calendar year 2023, to align the annual grant date with Outside Directors’ election to the Board and to align the formula for determining the number of RSUs underlying the annual grant with that of our annual management grants. The terms of our Outside Directors’ equity compensation are summarized below.receive:
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| • | ||||
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| with a grant date value of $200,000 (the “Annual Grant
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| ||||
| • | ||||
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| Outside Directors joining following the date of the annual RSU grant, but more than one month before the next | |||
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2024 PROXY STATEMENT 31
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| ||||
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DIRECTOR COMPENSATION
RSUs are payable to Outside Directors in shares of the Company’s Class B Common Stock upon vesting unless the Outside Director elects to defer settlement of the RSUs to a future date. Outside Directors are entitled to receive dividend equivalents on the RSUs in the event the Company pays a regular cash dividend on its Class B Common Stock. Dividend equivalents will accrue on the RSUs (including deferred RSUs) until the RSUs are settled (and will be forfeited if the RSUs are forfeited).
In light of the transition to a new grant date in 2023, effective March 1, 2023, Outside Directors received a one-time pro-rated transition grant consisting of 2,169 RSUs, based on the number of months from February 15, 2023 to May 8, 2023 (rounded to the nearest whole month) and the average closing price of our Class B Common Stock on Nasdaq for the 20-trading day period immediately preceding and including such grant date.
Matching Gifts Program for Directors
All directors are eligible to participate in our Matching Gifts Program for Directors. Under the program, we match donations made by a director to eligible tax-exempt organizations at the rate of one dollar for each dollar donated up to $25,000 for each fiscal year. The purpose of the program is to recognize the interest of the Company and its directors in supporting eligible organizations.
Director Stock Ownership Requirement
Under the Guidelines, directors are expected to own shares of Paramount stock worth five times the standard annual Board retainer (or $500,000) within three years of becoming a director. Class A Common Stock phantom units and Class B Common Stock phantom units credited pursuant to the Director Deferred Compensation Plans, and vested RSUs for which settlement has been deferred under the Director Equity Plan and the Viacom Inc. 2011 RSU Plan for Outside Directors, count toward the requirement; unvested RSUs are counted at 50%. The Nominating and Governance Committee monitors compliance with these guidelines by receiving an annual progress report from senior management. During 2022,2023, senior management reported to the Committee that all directors subject to the guidelines met the guidelines as applied to each of them at that time.
Other
Expenses: Directors are reimbursed for expenses incurred in attending Board, committee and stockholder meetings and certain Company events (including travel and lodging) in accordance with the Company’s Board travel policies, and administrative expenses that may be approved by the Board from time to time.
Director Attendance at Certain Other Events: Paramount believes it is in its best interest for directors to participate in certain Company and other events, including to meet with management, customers, talent and others important to our business, and that such participation is, therefore, integrally and directly related to the performance of the directors’ duties. The Board has established a policy on director attendance at these events. Under the policy, tickets to these events are allocated to directors and we reimburse directors for travel and related expenses in accordance with our travel policies. Occasionally, a director’s partner or other guest may accompany him or her to events at our invitation or request. To the extent attendance at and/or travel to these events constitutes a reportable perquisite involving an incremental cost to us, we disclose it in the “All Other Compensation” column of the “Outside Director Compensation During 2022”2023” table.
| 32 PARAMOUNT GLOBAL |
|
Item 2 — Ratification of the Appointment of the Independent Registered Public Accounting Firm
The Audit Committee has appointed PwC as our independent registered public accounting firm for the year ending December 31, 2023,2024, subject to stockholder ratification. The Audit Committee has reviewed PwC’s independence from the Company as described in the “Report of the Audit Committee.” In appointing PwC as our independent registered public accounting firm for the year ending December 31, 2023,2024, and in recommending that our stockholders ratify the appointment, the Audit Committee has considered whether the non-audit services provided by PwC were compatible with maintaining PwC’s independence from the Company and has determined that such services do not impair PwC’s independence.
Representatives of PwC are expected to be present at the Annual Meeting and will be given an opportunity to make a statement if they desire to do so. They will also be available to respond to questions at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
|
|
Report of the Audit Committee
The following Report of the Audit Committee does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate such information by reference.
The Audit Committee Charter states that the purpose of the Audit Committee is to oversee our accounting and financial reporting processes and the audit of our consolidated financial statements. The Audit Committee also assists the Board of Directors’ oversight of:
The quality and integrity of our consolidated financial statements and related disclosures;
The evaluation of the effectiveness of our internal control over financial reporting and risk management;
Our compliance with legal and regulatory requirements;
The independent auditor’s qualifications and independence; and
The performance of our internal audit function and independent auditor.
Under the Audit Committee Charter, the Audit Committee’s authorities and duties include:
| • | Direct responsibility for the appointment, retention, termination, compensation and oversight of the work of the independent auditor, which reports directly to the Audit Committee, and the sole authority to pre-approve all services provided by the independent auditor; |
Reviewing and discussing our annual audited financial statements, quarterly financial statements and earnings releases with management and the independent auditor;
Reviewing the organization, responsibilities, audit plan and results of the internal audit function;
Reviewing with management and the independent auditor the effectiveness of our internal control over financial reporting and disclosure controls and procedures;
Reviewing with management material legal matters and the effectiveness of our procedures to ensure compliance with legal and regulatory requirements; and
Overseeing our compliance program and receiving periodic reports from the Chief Compliance Officer.
The Audit Committee also discusses certain matters with the independent auditor on a regular basis, including our critical accounting policies, certain communications between the independent auditor and management, and the qualifications of the independent auditor.
The full text of the Audit Committee Charter is available on the “Investors—Corporate Governance & ESG” page of our website at ir.paramount.com. The Audit Committee assesses the adequacy of its Charter at least annually, or more frequently as the Committee may determine.
Management is responsible for the preparation of our consolidated financial statements, the financial reporting processes and maintaining effective internal control over financial reporting. The independent auditor is responsible for performing an audit of the consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and expressing an opinion on the conformity of the audited consolidated financial statements to U.S. generally accepted accounting principles. The independent auditor also expresses an opinion on the effectiveness of our internal control over financial reporting. The Audit Committee monitors and oversees these processes.
As part of its oversight role, the Audit Committee has reviewed and discussed with management and our independent auditor, PricewaterhouseCoopers LLP (“PwC”), the audited consolidated financial statements and our disclosures under “Management’s Discussion and Analysis of Results of Operations and Financial Condition” included in our Annual Report on Form 10-K for the year ended December 31, 20222023 and matters relating to the effectiveness of our internal control over financial reporting as of December 31, 2022.2023.
The Audit Committee has also discussed with PwC all required communications, including the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. In addition, the Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with PwC the firm’s independence from the Company.
| 34 PARAMOUNT GLOBAL |
|
REPORT OF THE AUDIT COMMITTEE
Based on this review and these discussions, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022.2023.
Audit Committee
Barbara M. Byrne, Chair
Judith A. McHale
Ronald L. NelsonNicole Seligman
Frederick O. Terrell
|
Fees for Services Provided by the Independent Registered Public Accounting Firm
The following table sets forth fees for professional services rendered by PwC to the Company and its subsidiaries for each of the years ended December 31, 20222023 and 2021.2022.
|
| ||||||||||||||||
|
| 2022 | 2021 | 2023 | 2022 | ||||||||||||
Audit Fees(1) | $ | 17,848,187 |
| $ | 18,252,381 |
| ||||||||||
Audit Fees(1) | ||||||||||||||||
Audit Fees(1) | ||||||||||||||||
Audit Fees(1) | $ | 24,255,630 |
| $ | 17,848,187 |
| ||||||||||
Audit-Related Fees(2) | ||||||||||||||||
Audit-Related Fees(2) | ||||||||||||||||
Audit-Related Fees(2) | ||||||||||||||||
Audit-Related Fees(2) |
| 267,216 |
|
| 432,060 |
|
| 1,034,552 |
|
| 267,216 |
| ||||
Tax Fees(3) |
| 7,361,264 |
|
| 7,762,122 |
| ||||||||||
Tax Fees(3) | ||||||||||||||||
Tax Fees(3) | ||||||||||||||||
Tax Fees(3) |
| 8,316,230 |
|
| 7,361,264 |
| ||||||||||
All Other Fees(4) | ||||||||||||||||
All Other Fees(4) | ||||||||||||||||
All Other Fees(4) | ||||||||||||||||
All Other Fees(4) |
| 119,150 |
|
| 68,854 |
|
| 730,250 |
|
| 119,150 |
| ||||
Total | $ | 25,595,817 |
| $ | 26,515,417 |
| ||||||||||
Total | ||||||||||||||||
Total | ||||||||||||||||
Total | $ | 34,336,662 |
| $ | 25,595,817 |
| ||||||||||
| (1) | Audit fees principally related to the integrated audit of our financial statements, statutory audits and services provided in connection with our debt and equity offerings, comfort letters and SEC filings. In 2023, these fees also included audits of carve-out financial statements. |
| (2) | Audit-related fees principally related to system pre-implementation reviews, technical accounting advice, agreed-upon procedures and compliance, and domestic and foreign employee benefit plan audits. |
| (3) | Tax fees principally related to tax compliance and consulting. |
| (4) | All other fees principally related to research projects, license fees for the use of PwC reference materials and publications, access to various online tools and other permissible consulting services. |
AUDIT COMMITTEE PRE-APPROVAL OF SERVICES PROVIDED BY PWC
All audit and non-audit services provided to us by PwC for 20222023 were pre-approved by either the full Audit Committee or the Chair of the Audit Committee. Under the Audit Committee’s pre-approval policies and procedures in effect during 2022,2023, the Chair of the Audit Committee was authorized to pre-approve the engagement of PwC to provide certain specified audit and non-audit services, and the engagement of any accounting firm to provide certain specified audit services, up to a maximum amount of $200,000 per engagement, with the total amount of such authorizations outstanding that have not been reported to the Audit Committee not to exceed an aggregate of $1,000,000. The Audit Committee receives regular reports on the engagements approved by the Chair pursuant to this delegation. For 2023,2024, the Audit Committee has adopted the same pre-approval policies and procedures that were in effect for 2022.2023.
| 36 PARAMOUNT GLOBAL |
|
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy and objectives and the decisions of the Compensation Committee of our Board of Directors (“Compensation Committee” or, in this CD&A, “Committee”) regarding the fiscal year 20222023 compensation of our named executive officers (also referred to as “NEOs”) included in the compensation tables that appear after this CD&A.
| Our NEOs and Compensation Committee | ||||||
| Executive Summary | ||||||
| Compensation Philosophy and Objectives | ||||||
| Peer Group Composition | ||||||
| 44 | ||||||
| Fiscal Year | ||||||
| Fiscal Year | ||||||
| Stock Ownership Guidelines | ||||||
| Anti-Hedging and Anti-Pledging Policies | ||||||
| Clawback Policy | 54 | |||||
| Other Benefits and Programs | ||||||
| Tax Considerations | ||||||
OUR NEOS AND COMPENSATION COMMITTEE
Our Named Executive Officers
The following five executive officers are our NEOs for fiscal year 2022:2023:
 |   |  |  |  | ||||
Robert M. Bakish President and | Naveen Chopra Executive Vice President, | Christa A. D’Alimonte Executive Vice President, | Doretha F. Lea Executive Vice President, | Nancy Phillips Executive Vice President, | ||||
Our Compensation Committee
The Compensation Committee is made up entirely of independent directors and currently composed of Linda M. Griego, Judith A. McHale (Chair) and Nicole Seligman. During fiscal year 2023, Ronald L. Nelson, each of whom iswho was also an independent director.director, served on the Committee until his departure from the Board.
The Committee is made up entirely of independent directors and reviews and approvessets our compensation arrangements with our NEOs and certain other senior executives. For 2022,2023, the Committee reviewed and approved all elements of compensation, including base salary, short- andshort-and long-term incentives, severance arrangements and benefit programs for each senior
|
COMPENSATION DISCUSSION AND ANALYSIS
executive under its purview,incentives, severance arrangements and benefit programs for each specified employee, to ensure that they adhere to our core compensation philosophy and objectives, and approved any salary increases, annual bonusincentive payouts, long-term incentive award determinations and various other compensation actions.
EXECUTIVE SUMMARY
This CD&A describes our executive compensation philosophy and objectives and provides context for the 20222023 compensation actions approved by the Committee for the NEOs. In addition to reviewing and approving the compensation arrangements for our NEOs and certain other senior executives, the Committee adopts and periodically reviews our compensation philosophy, strategy, and principles, and oversees the administration of our cash-based and equity-based incentive plans.
Recent Compensation Committee Highlights
As further described elsewhere in this proxy statement, during 20222023 the Committee continued to support our executive compensation programs, as outlined below, which demonstratestrengthen our pay-for-performance linkage and provide alignment with peer and market practices.
| • | Executive Annual |
| • |
|
| • | Pay-for-Performance Linkage: The Committee recognizes the importance of having long-term performance incentives as a meaningful portion of our NEOs’ total long-term incentive compensation. |
| • | Enhanced Risk Mitigation: To further discourage imprudent risk taking and avoid undue emphasis on any one metric or goal, for fiscal year |
Our Strategic Growth Priorities
We are a leading global media, streaming and entertainment company that creates premium content and experiences for audiences worldwide. We offer popular streaming services and digital video products, broadcast and cable television programming, and powerful capabilities in production, distribution and advertising solutions, and have one of the industry’s most extensive libraries of television and film titles. As the entertainment industry continues to expand beyond linear-based platforms to streaming video, we have prioritized unlocking the incremental market opportunity in streamingstreaming.
Our strategy is grounded in producing world-class content with global appeal; distributing content across platforms to reach viewers globally; and continuemonetizing our content across multiple revenue streams to growmaximize return on investment. As we execute in line with this strategy, we are focused on driving to DTC profitability and maximizing cash flow from our global ecosystem of pay, free and premium streaming services.traditional businesses.
| 38 PARAMOUNT GLOBAL |
|
COMPENSATION DISCUSSION AND ANALYSIS
We execute against a differentiated multiplatform strategy, grounded in three key strengths: our broad range of popular content; our multiplatform distribution model and our global operating reach. The below outlines our approach in detail.
The Committee considers these strategic priorities in its comprehensive annual review of our compensation programs, including its design, and determination, of performance-based compensation. (See “Annual BonusIncentive Awards” for a discussion of how our annual bonusincentive program is intended to link performance to these priorities.)
Pay for Performance
We believe that those executives with significant responsibility and a greater ability to influence our results should have a significant portion of their total compensation tied directly to business results, and we have continued to shift our executive compensation packages to further emphasize performance-based compensation that is aligned with our business and operational strategy. Accordingly, a high percentage of our NEOs’ and other senior executives’ total target compensation is “at risk” — meaning that we do not intend for them to receive targeted pay amounts if performance does not meet expectations. For 2022, the Committee increased the percentage of Mr. Bakish’s and our other NEOs’ long-term incentive awards that was delivered in performance share units (“PSUs”) to 50% and 35%, respectively.
Consistent with this philosophy, our performance-based compensation programs provide for the opportunity to reward NEOs and other senior executives for contributing to annual financial and operational performance (through annual bonusincentive programs) and stock price appreciation (through long-term equity incentives). The only fixed component of pay is annual base salary. Annual cash incentive awards and long-term equity incentive awards are subject to companyCompany performance and/or stock price performance.
As illustrated below, approximately 90% of Mr. Bakish’s total target compensation as of December 31, 20222023 was at risk and thus strongly linked to our results. Similarly, on average, approximately 74%76% of total target compensation for the other NEOs as of December 31, 20222023 was at risk.
|
COMPENSATION DISCUSSION AND ANALYSIS
20222023 Target Compensation
Note: The amounts shown in these graphs reflect the target level compensation package for the NEOs as of December 31, 20222023 and may differ from actual compensation amounts reflected in the Summary Compensation Table in this proxy statement.
In selecting the financial performance metrics and goals for the performance-based compensation programs each year, the Committee considers our annual operating budget for the upcoming year, as approved by the Board. Our budgeting process reflects aggressive goal setting and considers the expected performance of the media industry for that year, as determined by media industry analysts. The Committee believes that this goal-setting process results in challenging, yet realistic, financial and operational goals that, if achieved, will lead to a successful return of value for shareholders.
For fiscal year 2022,2023, the Committee determined that it was appropriate to continue utilizing streaming-related metrics — Direct-to-Consumer Subscribers and Direct-to-Consumer Revenue — and our bottom-line financial metrics — budgeted adjusted Operating Income Before Depreciation and Amortization (“Adjusted OIBDA”) and Free Cash Flow (“FCF”) — when setting quantitative performance goals that reflect our core pay-for-performance philosophy. With respect to streaming-related metrics, the Committee determined that DTC Revenue and DTC Operating Income Before Depreciation and Amortization (“DTC OIBDA”) were the most appropriate performance metrics. See “Annual BonusIncentive Awards” for additional discussion of these goals.
| 40 PARAMOUNT GLOBAL |
|
COMPENSATION DISCUSSION AND ANALYSIS
COMPENSATION PHILOSOPHY AND OBJECTIVES
Introduction
We designed our executive compensation programs to motivate and reward business success and to increaseincreases in shareholder value, based on the following core objectives:
Pay for Performance Ensure plans provide reward levels that
|
Flexible Enable management and the Board to
| ||||
|
|
| |||
Market Competitive Consider compensation programs of our
|
Focused on Shareholder Value Align executives’ interests with shareholder
|
In determining our compensation policies and decisions for fiscal year 2022,2023, we considered the results of the previous votes held on the compensation of our NEOs, and as a result, continued to base our compensation programs on the above-listed core objectives.
Risk Oversight
The Compensation Committee has oversight over the design and administration of our compensation programs, including to ensure that such programs do not promote an environment that encourages unnecessary and excessive risk taking by our employees. Based on management’s assessment and input from the Committee’s independent compensation consultant, the Committee does not believe that our employee compensation policies and practices create risks that are reasonably likely to have a material adverse effect on us.
Our Compensation Strategies
We use a mix of cash and equity incentives. The Committee believes that both cash and equity incentives are important to an effective compensation structure. Annual cash incentives reward executives for short-term financial and operating results that serve as a foundation for creating long-term value, while equity incentives motivate executives to execute long-term financial and strategic objectives to increase shareholder value through stock price performance.
We consider multiple factors when structuring compensation packages. In deciding the amount of cash and equity incentives that our NEOs and other senior executives receive, the Committee does not use rigid guidelines to determine the mix of compensation elements (i.e., short-term versus long-term compensation and cash versus non-cash compensation) for each senior executive. The Committee considers a multitude of factors, including the executive’s total target compensation, the amount of compensation that is delivered in fixed versus variable, at-risk elements, of compensation, external and internal market data, our succession planning and retention needs, the scope of the executive’s role and the executive’s performance and length of time in the role.
We choose performance metrics and establish performance goals that are intended to further our long-term strategic goals.objectives. The Committee believes that a significant portion of our executives’ compensation should be subject to the achievement of performance goals that are objectively measurable and that represent aggressive performance standards that are reasonably attainable, and that any performance goals are based on easily understood metrics intended to drive shareholder value creation. Each year, the Committee selects the financial performance metrics and goals for the performance-based compensation programs and, to avoid distorted performance goals, approves adjustments to the
|
COMPENSATION DISCUSSION AND ANALYSIS
calculation of those goals, which adjustments generally are pre-approved. Each year, the Committee also establishes qualitative factors and weightings for the annual bonusincentive plan, in which our NEOs and other executives participate, with multiple pre-established objectives for the Committee to assess when evaluating management’s performance. The Committee believes this process results in performance
2024 PROXY STATEMENT 41 |
COMPENSATION DISCUSSION AND ANALYSIS
goals that are challenging, yet realistic, and that will not encourage senior executives to engage in overly risky business activities to achieve unattainable goals or overcome lower results caused by unforeseen events.
Elements of Our Executive Compensation Program
The table below outlines the key elements of the compensation arrangements with our NEOs and other senior executives, and describes their purpose, key characteristics and, if applicable, the type of performance measured and how we deliver the compensation.
Total Target Compensation:
Compensation Element | Purpose | Fixed or At Risk | Performance Measured | Cash or Equity | ||||
Base Salary | • Provide competitive compensation to attract and retain executive talent • Provide secure base of guaranteed cash for services rendered | Fixed | Individual | Cash | ||||
Annual | • Incentivize, and reward for, achievement of a combination of challenging annual financial and operational performance goals and individual contributions | At Risk | Corporate and Individual | Cash | ||||
Long-Term Incentives | • Align interests between executives and shareholders by linking realizable pay to stock price performance • Retain talent and build executive ownership | At Risk | Corporate | Equity | ||||
The table below sets forth the total target compensation packages for our NEOs as of December 31, 2022.2023.
NEO | Base Salary | Target Bonus | Target LTI Award | Total Target Compensation | ||||||||||||||||||||||||||||
NEO | ||||||||||||||||||||||||||||||||
NEO | ||||||||||||||||||||||||||||||||
NEO | Base Salary | Target Bonus | Target LTI Award | Total Target Compensation | ||||||||||||||||||||||||||||
Robert M. Bakish | ||||||||||||||||||||||||||||||||
Robert M. Bakish | ||||||||||||||||||||||||||||||||
Robert M. Bakish | ||||||||||||||||||||||||||||||||
Robert M. Bakish | $ | 3,100,000 |
| $ | 12,400,000 |
| $ | 16,000,000 |
| $ | 31,500,000 |
| $ | 3,100,000 |
| $ | 12,400,000 |
| $ | 16,000,000 |
| $ | 31,500,000 |
| ||||||||
Naveen Chopra | $ | 1,400,000 |
| $ | 2,100,000 |
| $ | 3,000,000 |
| $ | 6,500,000 |
| ||||||||||||||||||||
Naveen Chopra | ||||||||||||||||||||||||||||||||
Naveen Chopra | ||||||||||||||||||||||||||||||||
Naveen Chopra | $ | 1,400,000 |
| $ | 2,450,000 |
| $ | 4,150,000 |
| $ | 8,000,000 |
| ||||||||||||||||||||
Christa A. D’Alimonte | ||||||||||||||||||||||||||||||||
Christa A. D’Alimonte | ||||||||||||||||||||||||||||||||
Christa A. D’Alimonte | ||||||||||||||||||||||||||||||||
Christa A. D’Alimonte | $ | 1,350,000 |
| $ | 1,687,500 |
| $ | 2,700,000 |
| $ | 5,737,500 |
| $ | 1,350,000 |
| $ | 1,687,500 |
| $ | 2,700,000 |
| $ | 5,737,500 |
| ||||||||
Doretha F. Lea | $ | 1,000,000 |
| $ | 1,000,000 |
| $ | 1,000,000 |
| $ | 3,000,000 |
| ||||||||||||||||||||
Doretha F. Lea | ||||||||||||||||||||||||||||||||
Doretha F. Lea | ||||||||||||||||||||||||||||||||
Doretha F. Lea | $ | 1,000,000 |
| $ | 1,000,000 |
| $ | 1,000,000 |
| $ | 3,000,000 |
| ||||||||||||||||||||
Nancy Phillips | $ | 925,000 |
| $ | 925,000 |
| $ | 1,200,000 |
| $ | 3,050,000 |
| ||||||||||||||||||||
Nancy Phillips | ||||||||||||||||||||||||||||||||
Nancy Phillips | ||||||||||||||||||||||||||||||||
Nancy Phillips | $ | 925,000 |
| $ | 925,000 |
| $ | 1,200,000 |
| $ | 3,050,000 |
| ||||||||||||||||||||
| 42 PARAMOUNT GLOBAL |
|
COMPENSATION DISCUSSION AND ANALYSIS
Other Forms of Compensation:
Compensation Element | Purpose | |
Health and Welfare, Retirement and Deferred Compensation Plans | • Promote employee health and well-being, and financial security for retirement • Provide competitive benefits to attract and retain executive talent | |
Perquisites and Other Personal Benefits | • Provide business-related benefits • Assist in attracting and retaining executive talent | |
Post-Termination Arrangements | • Attract and retain executive talent in a competitive market by providing temporary income following an involuntary termination of employment • Provide continuity of management • Compensate executives for restrictive covenants and other obligations following a termination without cause or a resignation for good reason | |
WHAT WE DO AND DON’T DO | ||||
We design our executive compensation programs to create long-term | ✓ Include a relative market-based performance metric (i.e., Relative Total Shareholder Return) in our long-term
✓ Maintain robust stock ownership guidelines for officers and directors
✓ Cap payouts under our annual
✓ Vary performance metrics and measurement periods in our compensation programs to mitigate excessive risk-taking
✓ Structure overall target compensation so that a substantial majority of our NEOs’ annual compensation is at risk
✓ Conduct a robust annual risk assessment of our compensation programs, policies and practices | |||
We incorporate best practices in our compensation programs | ✓ Clawback Policy:
✓ Anti-Hedging Policy: Prohibit our employees from hedging our securities
✓ Anti-Pledging Policy: Prohibit our executive officers, Section 16 officers and all other employees who report to our CEO from pledging our securities or holding our securities in a margin account
✓ Re-evaluate our peer group on an annual basis
✓ Retain an independent compensation consultant
✓ | × No Tax Gross-Ups – We do not provide excise tax gross-ups in the event of a change in control in our executive employment agreements
× No payment of dividends or dividend equivalents on unvested equity awards
× No repricing of underwater stock options
× No single-trigger change in control agreements | ||
2024 PROXY STATEMENT 43 |
COMPENSATION DISCUSSION AND ANALYSIS
Role of Compensation Consultants
The Committee retains an independent compensation consultant to advise the Committee in its review of senior executive compensation. For fiscal year 2022,2023, ClearBridge served as the Committee’s independent compensation consultant was ClearBridge Compensation Group LLC (“ClearBridge”).consultant. The Committee has the sole authority to retain and terminate the independent compensation
|
COMPENSATION DISCUSSION AND ANALYSIS
consultant and to review and approve the firm’s fees and other retention terms. The Committee maintains a policy requiring that its independent compensation consultant not provide services to the Company other than its services to the Committee and its services to the Company with respect to the evaluation of non-executive director compensation. ClearBridge did not provide any such services in 2022.2023.
PEER GROUP COMPOSITION
Fiscal Year 20222023 Peer Group
In reviewing senior executive compensation, the Committee considers data regarding the competitive market for comparable senior executive talent. The Committee reviews the peer group to be used for benchmarking NEO and other senior executive compensation packages with ClearBridge annually. The Committee seeks to include companies with which we compete for executive and creative talent and with a business of similar scope andand/or complexity. The Committee also seeks to ensure that the number of companies in the peer group is sufficient to provide a degree of continuity year-over-year to avoid statistical distortion.
Following the Committee’s review for 2022,2023, the Committee determined thatto remove AT&T Inc. and News Corporation from the established peer group below, continued to reflect those companies with which we compete for talent and that are of a similar size to the Company when measured by revenue and enterprise value and no changes were necessary.add Altice USA, Inc.
| ||
Charter Communications, Inc.
Comcast Corporation
DISH Network Corp.
Fox Corporation
| Liberty Global plc
Lions Gate Entertainment Corp.
Netflix, Inc.
The Walt Disney Warner Bros. Discovery, Inc. | |
The Committee determinedconcluded that utilizing data from this peer group would continue to allow it to appropriately evaluate our NEO compensation to attract, retain and appropriately compensate ourtalented executives, while preserving sufficient year-over-year continuity of our peer group. The Committee used the publicly reported NEO compensation data from companies in this group as reference points in assessing the compensation levels for our NEOs. Consistent with its past practice and overall compensation philosophy, the Committee does not target a benchmark level of compensation and intends to continue to refrain from doing so. The Committee will also maintain its practice of considering the scope of each NEO’s responsibility and his or her length of time in the role, in addition to other factors.
Fiscal Year 20232024 Peer Group
In connection with its annual review of the Company’s compensation benchmarking peer group, the Committee found that the established peer group, above, continued to reflect appropriate comparison companies, with one exception. Due to the acquisition of DISH Network Corp. by EchoStar Corporation at the end of 2023 and after considering the combined company, the Committee determined that AT&T Inc. and Newsto include EchoStar Corporation were no longer aligned with the Company’s business and removed them fromin the peer group for fiscal year 2023. The Committee also determined to add Altice USA, Inc.,2024, finding its addition appropriate due to its size and business similarities to our other peers.
FISCAL YEAR 20222023 COMPENSATION
Changes in NEOs’ Compensation Arrangements in 20222023
In connection with the renewal of each of the following NEO’sMr. Chopra’s employment agreement, the Committee made the following changes to such NEO’s compensation arrangements:changes:
increased theMr. Chopra’s target bonus opportunity to 175% of his base salaries of Mses. D’Alimonte, Lea and Phillips to $1,350,000, $1,000,000 and $925,000, respectively;salary; and
increased the target value of the annual grant of equity compensation to each of Mses. D’Alimonte, Lea and PhillipsMr. Chopra to $2,700,000, $1,000,000 and $1,200,000, respectively.$4,150,000.
| 44 PARAMOUNT GLOBAL |
|
COMPENSATION DISCUSSION AND ANALYSIS
In keeping with the Committee’s pay-for-performance philosophy and to further align our NEOs’ interests with those of our stockholders, theseshareholders, all incremental compensation changes increasedreflected in Mr. Chopra’s renewal will be delivered in variable, at-risk pay, which increases the percentage of Mr. Chopra’s total target compensation delivered in variable, at-risk pay and performance-based long-term incentivesincentives.
In order to remain competitive in attracting and retaining top executive talent, the Committee adopted the Paramount Global Executive Change in Control Severance Protection Plan (the “CIC Plan”) on November 16, 2023. The CIC Plan provides severance benefits to certain senior executives designated by the Committee from time to time (including our NEOs) upon a qualifying termination within the six months preceding or two years following the consummation of a Change in Control (as defined in the CIC Plan). In adopting the CIC Plan, the Committee considered prevailing market practices and the recommendations of its independent advisors. See “Potential Payments Upon Termination and Certain Other Events” for eachadditional discussion of these three NEOs.the CIC Plan.
There were no other changes to NEO compensation in 2023.
Fiscal Year 20222023 Compensation Elements
The Committee’s decisions with respect to fiscal year 20222023 compensation are discussed below.
Base Salary
In reviewing proposals for changes to base salary for NEOs, the Committee considers the following:
Appropriate competitive compensation data for the position;
Individual performance;
Base salary level for the executive in relation to the executive’s total target compensation;
Base salary level as it relates to the allocation of fixed versus at risk compensation;
Input and recommendations of the Chief Executive Officer (for NEOs other than himself);
The level of the annual merit increase budget across the Company as a whole; and
Existing contractual obligations, if any.
Annual BonusIncentive Awards
We use annual cash bonuses to reward achievement of financial performance and individual strategic and operational objectives under our STIP, which is the same bonus program in which our broader bonus-eligible employee base participates.STIP. In establishing the bonus program for 2022,2023, the following process was utilized:
| 1. | At the beginning of the fiscal year: |
Approval of the 20222023 STIP Design. The Committee approved the framework under which individual bonus amounts for NEOs (and all other bonus-eligible employees) would be determined under the STIP, which consisted of two steps.
| • | Step 1: At or shortly following the end of fiscal year |
Step 2: The Committee has the opportunity to modify the preliminary bonus amount for each NEO based onAfter consideration of (i) the Committee’s assessmentevaluation, together with the Company’s Nominating and Governance Committee, of each NEO’s individualthe CEO’s performance for fiscal year 2022 after consideration ofand (ii) the CEO’s recommendation for all NEOs other than the CEO, subjectthe Committee determines each NEO’s “individual multiplier” based on the Committee’s assessment of each executive’s individual performance for fiscal year 2023. Each NEO’s respective individual multiplier is applied to their preliminary bonus amount to determine their final bonus payout. Through the maximum individual bonusmultiplier, the Committee may modify the final payout up or down within a range of 0% of target to 200% of target for each NEO.target.
2024 PROXY STATEMENT 45 |
COMPENSATION DISCUSSION AND ANALYSIS
This two-step approach reflects the Committee’s view that Company-wide quantitative and qualitative performance, in combination with individual performance, should be the factors used in determining bonuses for NEOs. To avoid undue risk taking, the Committee determined that the final STIP payout for any NEO may not exceed 200% of the NEO’s target bonus amount.
Setting the 20222023 STIP Performance Goals. The Committee established the quantitative performance goals applicable to the 20222023 STIP, which were not certain of achievement at the time they were set, and the qualitative performance factors for the year. The goals were developed to encourage and reinforce a “One Paramount” mindset, as well as incentivize maximizing our traditional businesses to help drive ourmaximize DTC streaming growth and profitability, while achieving our Company-wide bottom-line financial goals and continuing ourto progress on our strategic, organization development, and diversity, equity and inclusion initiatives.
In setting the 20222023 STIP quantitative performance goals, the Committee sought to establish performance goals that were meaningful, challenging, and designed to motivate collaborative performance, without encouraging senior
|
COMPENSATION DISCUSSION AND ANALYSIS
executives to engage in excessively risky business activities to achieve unattainable goals or overcome lower results caused by unforeseen events. The Committee determined to base 20222023 STIP bonus amounts on the following structure:
| • | 80% based on the degree of achievement of pre-established quantitative performance goals (i.e., collectively, the quantitative performance factor, calculated using weighted average of the payout percentage set for the applicable achievement level). The threshold, target and maximum goals associated with each metric are established annually so that they remain rigorous and in line with our strategic plan. The target established for each metric was set as follows: Adjusted OIBDA, |
The following chart explains the Committee’s rationale in selecting Adjusted OIBDA, FCF, DTC SubscribersOIBDA and DTC Revenue as the applicable quantitative performance metrics, and the manner in which each such metric is calculated:
Performance Metric | Why Chosen | How Calculated | ||||
| Adjusted Operating Income Before Depreciation and Amortization (Adjusted OIBDA) Weighting: | An important indicator of our operational strength and performance, as it measures efficiency and profitability and incentivizes management to better control
| Using our
| |||
Free Cash Flow (FCF) Weighting: 15% | Provides a clear view of our ability to generate cash (and thus profits), which allows us to pursue opportunities that enhance shareholder
| Using our | ||||
DTC Weighting: | An important indicator of the | Using our
| ||||
DTC Revenue Weighting: | An important driver of our valuation and a key indicator of the future profitability of our | Using our | ||||
20% based on the Committee’s assessment of management’s qualitative performance as a whole with regard to the following factors:
| o | Execution of our fiscal year |
| o | Organization Development (5%), |
| 46 PARAMOUNT GLOBAL |
|
COMPENSATION DISCUSSION AND ANALYSIS
| o | Diversity, Equity & Inclusion (5%), |
In all cases the maximum amount of STIP funding on a Company-wide basis was capped at 200% of the STIP pool at target.
|
COMPENSATION DISCUSSION AND ANALYSIS
In setting the qualitative performance factors for 2022, the Committee determined to exclude the synergy goal included in the 2021 STIP design and reallocate its 5% weighting to the strategy goal described above, as, three years post-merger, the importance of enforcing the Company’s overarching strategy increased relative to the importance of post-merger synergies. Multiple risk mitigation concepts were maintained as part of the 20222023 STIP design to strike the appropriate balance in management’s focus on our bottom-line financial goals and our DTC streaming growth strategy. Adjusted OIBDA and FCF achievement were each subject to a maximum payout belowpayouts of 200% of target to incentivize a shift in efforts towards driving streaming growth. The DTC streaming factors were subject to maximum payouts of 300% for achievement of maximum performance, provided that if threshold performance for either of the Adjusted OIBDA or FCF metric was not achieved, both DTC streaming metrics would be capped at a maximum payout percentage of 150%. The Committee determined that these limitations on DTC streaming metric payouts were appropriate to ensure that our bottom-line financial goals continued to remain a priority for management.
| 2. | At or shortly following the end of the fiscal year: |
Determining Actual Bonus Payments. In accordance with the framework described above, the Adjusted OIBDA, FCF, DTC SubscribersOIBDA and DTC Revenue results were calculated by starting with our 20222023 results for each metric and then adjusting for items approved by the Committee that would otherwise have distorted the calculation of the performance goals. The Committee determined to adjust our quantitative performance to account for the impact of Russia’s invasionforeign currency rate fluctuations and reduced amortization expense. Further, the Committee determined to reduce the payout for the FCF metric to 100% of Ukrainetarget to account for the unbudgeted positive cash flow impact of the Writers Guild of America and our decision to suspend operationsScreen Actors Guild-American Federation of Television and pause the supply of content in Russia.Radio Artists strikes. Performance results, including such adjustments, were as follows: with respect to Adjusted OIBDA, $3.314$2.296 billion, with respect to FCF, $(129)$(400) million, with respect to DTC Subscribers, 80.6 millionOIBDA, $(1.804 billion) and with respect to DTC Revenue, $4.931$6.694 billion.
Adjusted Quantitative Performance Results (80%) |
Adjusted Quantitative Performance Results (80%) | |||||||||||||||||||||||||||||||||||||||
(in millions) | Adjusted (25%) | Free Cash Flow (15%) | DTC Subscribers (20%) | DTC Revenue (20%) | ||||||||||||||||||||||||||||||||||||
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(in millions) | Adjusted (20%) | Free Cash Flow (15%) | DTC OIBDA (15%) | DTC Revenue (30%) | ||||||||||||||||||||||||||||||||||||
Unadjusted Result | ||||||||||||||||||||||||||||||||||||||||
Unadjusted Result | ||||||||||||||||||||||||||||||||||||||||
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Unadjusted Result | ||||||||||||||||||||||||||||||||||||||||
Unadjusted Result | $ | 3,237 | $ | (206 | ) |
| 77.3 | $ | 4,904 | $ | 2,378 | $ | 289 | $ | (1,659 | ) | $ | 6,736 | ||||||||||||||||||||||
Adjustment | $ | 77 | $ | 77 |
| 3.3 | $ | 27 | ||||||||||||||||||||||||||||||||
Adjustment | ||||||||||||||||||||||||||||||||||||||||
Adjustment | ||||||||||||||||||||||||||||||||||||||||
Adjustment | ||||||||||||||||||||||||||||||||||||||||
Adjustment | $ | (82 | ) | $ | (689 | ) | $ | (145 | ) | $ | (42 | ) | ||||||||||||||||||||||||||||
Adjusted Result | $ | 3,314 | $ | (129 | ) |
| 80.6 | $ | 4,931 | |||||||||||||||||||||||||||||||
Adjusted Result | ||||||||||||||||||||||||||||||||||||||||
Adjusted Result | ||||||||||||||||||||||||||||||||||||||||
Adjusted Result | ||||||||||||||||||||||||||||||||||||||||
Adjusted Result | $ | 2,296 | $ | (400 | ) | $ | (1,804 | ) | $ | 6,694 | ||||||||||||||||||||||||||||||
* OIBDA was adjusted to exclude the impact of STIP expense on the calculation of percentage achievement.
In accordance with step one of the two-step STIP design process discussed above, in February 2023,2024, the Committee evaluated our adjusted performance for 20222023 against the pre-established quantitative performance goals. Based on the adjusted results, DTC Subscribers, DTC Revenue and Adjusted OIBDA results were determined to be between threshold and target, resulting in a below target payout for such factors,factor, and adjusted FCF results were determined to be below threshold,above maximum achievement, but the payout was capped at target, as noted above. Based on the adjusted results, DTC OIBDA and DTC Revenue were determined to be above target, resulting in noa payout between target and maximum for such factor.factors.
The Committee then evaluated our qualitative performance after receiving the Chief Executive Officer’s overall assessment of the Company’s 20222023 qualitative performance goals, which included the following highlights:
We demonstratedcontinued driving the continued breadth and depthevolution of our multiplatformParamount into a leading global, multi-platform, premium content capabilities in alignment with our long-term strategy goals;company;
| • | With major Hollywood movies, top-tier sports and world-class entertainment, Paramount+ remains one of the fastest growing streaming services. We made significant progress in building a scaled streaming business with narrowed losses and that delivered growth in engagement and revenue. We increased its global subscribers and revenue by 21% and 61% over the prior year, respectively, and Pluto TV remained the most widely distributed FAST service; |
For 2022, our global streaming subscribers grew 38% year-over-yearWe launched the integration of Paramount+ with SHOWTIME, enabling significant cost savings, a successful price increase and, Paramount+ subscribersmost importantly, a stronger product for consumers and revenue grew 70% and 105% year-over-year, respectively; Pluto TV global monthly active users (MAUs) increased 22% year-over-year; and we successfully launched a Paramount+/SHOWTIME bundle;partners;
2024 PROXY STATEMENT 47 |
COMPENSATION DISCUSSION AND ANALYSIS
CBS finished the 2021-20222022-2023 season as America’s number one broadcast network in primetime for the 14th15th consecutive season, with the top four and eight of the top 10 most-watched series in entertainment wasprimetime, including the number one across multiple genres in 2022; CBS Sports delivered its most-watched National Football League (the “NFL”) regular season in seven years, while Paramount+ had its most-streamed NFL regular season ever, recording double-digit year-over-year growth;series, scripted series and fordrama, the 14th consecutive year, CBS Sports maintained college football’s highest average viewership;top three dramas, the number one new series, the top four sitcoms and the number one news program;
| • | Paramount Pictures |
We delivered on other cost savings opportunities through various transformation and cost management initiatives;
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COMPENSATION DISCUSSION AND ANALYSISWe continued working to streamline our asset portfolio, including the divestiture of Simon & Schuster; and
| • | We |
We extended our successful track record in distribution, finalizing key platform and distribution agreements domestically, including with DirecTV, fuboTV, Philo, Mediacom, TEGNA and Scripps;
We continued to focus on creating operational efficiencies and on portfolio management, including, most recently, our planned integration of SHOWTIME into Paramount+;
We made progress on our diversity, equity and inclusion representation goals and improved the diverse representation within our talent pipelines, in our writer’s rooms, and on our production sets;
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We continued to build and further develop our management team to support our long-term strategic business goals, emphasize global collaboration and look for opportunities to capitalize on efficiencies across the organization.
Based on its quantitative and qualitative assessments, the Committee determined the preliminary bonus funding percentage for 20222023 to be 86.5%102.5% of target.
In accordance with step two of the two-step STIP design process discussed above, the Committee then modified the 86.5%102.5% preliminary bonus funding percentage for each NEO based on the Committee’s assessment of each NEO’s individual performance after consideration of management’s recommendation. When making its 20222023 bonus determinations, the Committee considered the input and recommendations of Mr. Bakish with respect to NEOs other than himself. With respect to Mr. Bakish, the Committee took into account his performance evaluation conducted by the Committee, together with the Nominating and Governance Committee, after the close of the fiscal year. The Committee’s determination of the NEOs’ annual bonusincentive amounts, as set forth in the Summary Compensation Table for Fiscal Year 20222023 following this CD&A, took into account each NEO’s contributions toward the qualitative performance factors described above, as well as a variety of factors it deemed appropriate, with no pre-determined emphasis on any individual factor. The Committee also considered each NEO’s target bonus amount for 2022,2023, which amounts are based on competitive practice and are included in the table below. The differences in the target bonus amounts set forth in the NEOs’ agreements partly reflect the level of relative impact of each of their positions on our performance.
Because of our NEOs’ performance, we continued to deliver on our streaming strategy.strategic objectives. In addition to the accomplishments and other considerations discussed earlier in this CD&A, the Committee noted the following accomplishments within this context:
Mr. Bakish continued to provide strategic leadership and management for our Company during a time of tremendous challenges and opportunities. He and his senior executive team:
| o | continued |
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| o | oversaw |
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| ◾ | in Filmed Entertainment, achieved five number one opening titles at the domestic box office for Paramount Pictures and a worldwide box office total of $2 billion, and extended powerful franchises like PAW Patrol: The Mighty Movie and Teenage Mutant Ninja Turtles: Mutant Mayhem, both of which also drove a broader ecosystem of consumption on linear and streaming and at retail; |
| 48 PARAMOUNT GLOBAL |
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