DreamWorks Animation SKG Inc. Chief Executive Jeffrey Katzenberg has renewed his contract with the company until 2017 and significantly changed his compensation mix, ending a longtime practice of taking his pay in the company’s stock and options.
The Glendale animated film studio said in a regulatory filing late Tuesday that Katzenberg now will collect a $2.5 million annual salary, whereas traditionally he has taken only a token $1. His annual equity incentive award is reduced to $4.5 million from a previous $8 million, and he now will be eligible for an annual cash incentive bonus of $4 million.
In the Business Journal’s most recent annual executive compensation list, Katzenberg was the only chief executive on the 50-person list not to take a base salary. His compensation in 2011 totaled $3.9 million in restricted stock. In previous years, stock options also were part of the mix, boosting the estimated value of his annual compensation in 2009 as high as $23.4 million, according to the company’s most recent proxy statement.
Katzenberg has been chief of DreamWorks Animation SKG, known for its “Shrek” and “Madagascar” film franchises, since the company in 2004 separated from the old DreamWorks Studios, the live and animated film studio founded in 1994 by Katzenberg, Steven Spielberg and David Geffen.
His contract extension comes just weeks after the company announced that Geffen had swapped his super-voting Class B shares for regular Class A shares, making him the largest non-institutional common shareholder. That left Katzenberg controlling about 61 percent of total voting power, with 7.8 million Class B shares and 1 million Class A shares according to his most recent filings.
DreamWorks Animation’s share price, which closed at $20.60 on Wednesday, has rebounded from a low of $16.97 on Aug. 31. The stock is up 25 percent from the beginning of the year.
The company is scheduled to report third quarter earnings on Thursday. The Wall Street consensus is for revenue to fall 17 percent to $133 million, with net income down 48 percent to 12 cents a share compared with the same period a year earlier.