Jeffrey Katzenberg extends contract
DreamWorks Animation CEO signs on for four more yearsDreamWorks Animation CEO Jeffrey Katzenberg on Wednesday announced the company's strongest first quarter ever, then said he has extended his employment contract another four years.
Katzenberg's pact was set to expire at the end of the year, but he'll remain CEO through April 22, 2014, with much of his pay dependent on DWA's stock price.
He earns just $1 a year in salary but can earn more via stock grants if he can get DWA shares to trade for a yearly average of about $32.32, and more still if it goes to an average $36.53 for a year.
Based on Monday's close, Katzenberg must get the stock price to improve 72% over three years to reap rewards on the first half of 2.5 million shares and 95% for the second half.
Delivering what one analyst called "stellar results" in the first quarter helped Katzenberg's cause. The stock was up fractionally to $19.07 during Tuesday's regular session but leaped 15% in after-hours trading.
If those share-price goals are met, DWA's compensation committee also might award Katzenberg as much as $8 million more in equity-based compensation in October 2010, according to a regulatory filing.
DreamWorks Animation earned $62.3 million in the quarter, up from $26.1 million a year ago, on revenue that jumped 68% to $263.5 million.
"Madagascar: Escape 2 Africa" gets most of the credit, bringing in $147.5 million in revenue. The movie has reached $595 million at the worldwide boxoffice and has sold 6.7 million DVDs.
Next was "Kung Fu Panda," which brought in $34.1 million during the quarter. The company said DVD sales of that film have reached 14.3 million. "Bee Movie" delivered $21.2 million, and "Flushed Away" was good for $12.2 million.
The company's current release, "Monsters vs. Aliens," contributed $10.5 million, mostly from consumer products. Katzenberg said it's too early to say whether there will be a theatrical sequel, but it's definitely a franchise as "Monsters vs. Aliens: Mutant Pumpkins From Outer Space" is scheduled as an NBC Halloween special in October, and DWA is trying to develop a TV series based on the film.
Katzenberg did, though, express frustration that the "Monster vs. Aliens" film has been underperforming in Germany, France and Italy.
"Over the Hedge" and "Shrek the Third" contributed $8.8 million and $5.3 million, respectively, during the quarter as library and other revenue -- including $9.8 million from the Broadway hit "Shrek the Musical" -- was at $23.9 million. The production cost of "Shrek the Musical" was about $24 million.
Katzenberg said U.S. consumers have paid an average premium of more than $3 a ticket to see "Monster's vs. Aliens" in 3-D and that polling indicates 88% of them thought it was more than worth it. 3-D has accounted for about 60% of the domestic boxoffice for that film.
DWA also benefited during the quarter -- to the tune of $18.8 million -- from of a tax-sharing agreement with Paul Allen, who no longer owns DWA shares.