Katzenberg
NEW YORK -- DreamWorks Animation said CEO and co-founder Jeffrey Katzenberg has renewed his contract through 2013, as the company's profits surged last quarter to more than double those of a year ago.
Katzenberg will continue to work for a nominal paycheck of $1 a year, with any additional compensation in the form of restricted and performance-based stock awards tightly linked to the company's share price.
The contract stipulates that DWA's stock would have to rise by 72% and stay there a year for the first tranche to vest. The share price would need to jump at least 95% for the rest. The figures are based on the stock's $18.76 closing price on April 22. Katzenberg would need to stay in the job for three years to receive the payouts.
"It's clear to see from the board perspective that we think Jeffrey is very, very valuable, and we think he brings creative vision," board member Mellody Hobson told
Daily Variety. "But when we put the contract together, we wanted the performance and his compensation to line up exactly. The shareholders have all the upside and no downside."
Katzenberg said it's "an exciting time here" as the creative team at the 15-year-old studio has "really come into (its) own as great storytellers, as great moviemakers, taking the best of state-of-the-art technology and pioneering out from that."
The shares closed up 0.85%, or 16¢, at $19.07 on Tuesday. They jumped to $21.46 in after-hours trading on the strong results.
The company had its best first quarter even with income jumping to $62 million from $26 million the year before. Revenue rose to $263 million from $157 million.
DWA cited the success of "Madagascar: Escape 2 Africa" at the international box office and on homevideo. The pic contributed $147 million in revenue and has reached nearly $600 million in worldwide box office. "Kung Fu Panda" ponied up $34 million in revenue.
"Monsters vs. Aliens," released late in the quarter, contributed $10 million, mostly from consumer product sales. The film has gone on to garner about $320 million in worldwide box office.
Katzenberg said, "It's too early to tell" if "Monsters vs. Aliens" will spawn a sequel or join the studio's growing stable of franchise properties. The picture proved to be a groundbreaking rite of passage for digital cinema, with 60% of domestic ticket sales coming from 3-D screenings. But it also hit bumps overseas, with disappointing box office in some big territories like France and Germany.
"It's proving the catalyst the industry needs (and has) accelerated the installation of 3-D screens worldwide," he said, "while ticket sales did not reach the level we'd anticipated." As for why, he said, "We're a little befuddled. Genuinely surprised. We don't have an answer yet, but we're on the case."
Asked if the 3-D experience could be replicated at home, he said, "We have some fun ideas up our sleeves" for the homevideo release of "Monsters," but he wouldn't elaborate.
Katzenberg reiterated that the company's product seems largely immune from woes affecting overall homevideo sales. With times hard, consumers are back to renting more and buying less.
"People usually don't want to rent our titles. Either they don't want them or they want to own them," he said.
DWA's TV biz is flush with the success of the "Penguins of Madagascar" series on Nickelodeon.
And the company's rocky Broadway debut was vindicated as "Shrek the Musical" received a flurry of nominations over the past week from the Outer Critics Circle and the Drama Desk. The first touring company will hit the road in the summer of 2010, starting in Chicago. The production still operates at a loss but won't have much impact on earnings for the year, said chief financial officer Lewis Coleman.
Contact Jill Goldsmith at
jill.goldsmith@variety.com