DreamWorks executives to share $45m

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The Independent Online

Five senior executives at DreamWorks Animation will share a windfall of almost $45m (£25m) as a result of the $650m flotation of part of the Hollywood studio group next month.

Five senior executives at DreamWorks Animation will share a windfall of almost $45m (£25m) as a result of the $650m flotation of part of the Hollywood studio group next month.

The prospectus, which was filed with the Securities and Exchange Commission in the United States, shows the biggest payment will go to Jeffrey Katzenberg, DreamWork's chief executive, who will collect stock-based compensation of $20.5m. Mr Katzenberg founded DreamWorks with the director Steven Spielberg and the Hollywood executive David Geffen in October 1994.

Under the terms of the IPO, Ann Daly, the company's chief operating officer, will receive $14m, and the chairman, Roger Enrico, will be paid $4m.

DreamWorks is being advised by Goldman Sachs and JP Morgan. The prospectus says the company may follow up its issuance of shares next month with a secondary offering, which would allow DreamWorks' founders to sell shares 12 months after the IPO.

Plans by DreamWorks to demerge its animation business and to float it on the stock market have been fuelled by a string of box office hits. Its latest blockbuster was Shrek 2 which, according to the SEC filing, has been the third-highest grossing film of all time in the US. The film broke the single-day box office sales record by grossing $44.8m. It had generated total revenues of $235m by 30 June, DreamWorks said.

The success of Shrek helped DreamWorks return to profitability in the first six months of the year, notching up net income of $119.4m after a loss of $115.5m in the period last year. The last time DreamWorks was in the black was in 2001, when it made $3.7m for the whole year.

DreamWorks' parent studio business will remain in private hands. As part of the demerger it will receive a distribution fee. The animation business said it would use the cash from the IPO to repay debt and to fund development. DreamWorks said it would retain about $175m from the flotation as working capital to develop more computer-generated films for its pipeline.

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