Warner Bros Discovery Inc

We believe that our executive compensation program plays a key role in our operating and financial success. We place great importance on our ability to attract, retain, motivate and reward talented executives in our highly competitive industry who can continue to grow our business and engage audiences around the world.

We seek to design compensation packages for individual executives based on the scope of the executive’s responsibilities, the executive’s proven performance, and a determination of what is competitive compensation in the market for similar roles, if such data is available. We continue to refine our compensation programs to strengthen the link between pay and performance and to effectively balance and align executive and stockholder interests.

The Committee seeks to deliver the majority of target total direct compensation for each NEO in performance-based pay, with the balance between the annual cash bonus and LTI awards determined by the Committee as appropriate for each role. Approximately 94% of the CEO’s target total compensation under his employment agreement is performance-based and

approximately 71% of the 2023 target total compensation for our other NEOs was performance-based. The Committee has typically awarded a significant portion of each NEO’s performance-based compensation in the form of LTI awards, including stock options and PRSUs. The Committee believes the use of stock options and PRSUs aligns the interests of our NEOs with our stockholders and will motivate the NEOs to achieve our business goals and strategies and increase stockholder value. We believe the mix of compensation for our NEOs is competitive with the compensation practices specific to our industry and appropriately balanced to benefit WBD in both the short- and long-term so as not to encourage our NEOs to take undue risks.

When determining compensation payouts for 2023 performance, the Committee considered that 2023 was an extraordinarily challenging year which included: the continued integration of two large, global media companies following the closing of a transformational merger, a historic work stoppage due to strikes by WGA and SAG-AFTRA, and a volatile macroeconomic environment with considerable pressure on ad sales and increased disruption in the media and entertainment industry. Despite these challenges, the Committee believed our CEO and NEOs performed well in 2023, both in terms of the leadership they provided with respect to delivering against WBD's 2023 financial priority of driving free cash flow to reduce our debt burden and their individual performance versus the strategic metrics established by the Committee for the CEO's and CFO's 2023 cash bonus awards, the CEO's 2023 LTI awards and other key business objectives and priorities. The Committee believes the 2023 compensation to our CEO and NEOs is appropriate in light of WBD's financial performance in the face of this year's challenges, particularly our over-delivery of free cash flow and significant debt reduction efforts in 2023, recognizes their exceptional leadership during a year with many challenges and is aligned with our pay-for-performance philosophy. Annual cash bonus awards are more fully described in "NEO Compensation in 2023—Annual Cash Bonus Awards," beginning on page 57, and our LTI compensation program is more fully described in "NEO Compensation in 2023—Long-Term Incentive Compensation," beginning on page 64.