With new board in place, CBS to decide Moonves' exit pay
The newly elected CBS board faces daunting tasks: deciding whether former CEO Les Moonves gets a $120 million exit package following a sexual-misconduct investigation and charting a path for CBS to recover after the scandal.
CBS shareholders ratified the 11 board members, including six new ones, at an annual meeting Tuesday. The board now has until the end of January to decide whether CBS fired Moonves with or without cause, a determination that will affect his eligibility for severance. An investigation by two outside law firms could conclude this month.
Meanwhile, a search for a new CEO is ongoing. Strauss Zelnick, filling Moonves' role as board chairman on an interim basis, said that a recruiting firm has been hired to conduct the search and that a decision will be made in due course. CBS hasn't announced a timetable.
Moonves was ousted in September after The New Yorker published allegations from 12 women who said he subjected them to mistreatment that included forced oral sex, groping and retaliation if they resisted.
The New York Times said a draft report on the outside investigation found Moonves committed "multiple acts of serious nonconsensual sexual misconduct." Citing the report, the Times said he deleted numerous text messages and was "evasive and untruthful at times." The investigators issued a statement saying their work was still in progress, and a lawyer for Moonves denied any wrongdoing.
Tuesday's shareholder meeting wrapped up in less than 30 minutes without discussion of Moonves.
Because the investigation is ongoing, there was really no point in the board or company executives bringing up the allegations, said Porter Bibb, a former media executive now with the advisory firm Mediatech Capital Partners. He said any mention of Moonves would have put pressure on the board to remark on the severance before the investigation results were in.
Though no shareholder raised the issue at the meeting, about a dozen protesters gathered outside as shareholders arrived. The protesters held such signs as "CBS don't reward sexual abuse" and "$120M?! Les doesn't deserve more."
"The board of directors has all the information they need to fire him with cause and to deny him the $120 million golden parachute," said Natalie Green of the UltraViolet, an online organization dedicated to fighting sexism in the public and private sectors.
Moonves had been one of the most admired powerbrokers in the entertainment industry. He was hailed for turning around the fortunes of CBS when he took over as entertainment chief in 1995, as he churned out such hits as "Two and a Half Men" and "Survivor." He was also one of the highest-paid executives in the nation, making about $70 million in each of the past two years.
The official agenda for Tuesday's meeting had glowing praise for Moonves' 2017 performance, his last full year as CEO. The board lauded Moonves for positioning CBS "for the digital future," growing its direct-to-consumer streaming business and lessening its dependence on traditional advertising.
It also described a management style that seems awkwardly at odds with the emerging allegations of his attempted interference in the sexual-misconduct investigation. The agenda document lauded Moonves for his successes in "management development and human resources," including developing "diversity and inclusion programs."
But Fatima Goss Graves, president and CEO of the National Women's Law Center, said CBS must determine if the scandal is symptomatic of a broader culture "that allowed this abuse to continue in the first place."
"Let's get at the root of the problem," said Goss Graves, a co-founder of the Time's Up Legal Defense Fund, which provides legal assistance to victims of assault, harassment or abuse.
Dan Eaton, an expert on severance issues and a professor at San Diego State University, said that given the reported findings of the investigation, the board would face backlash if it awards Moonves his $120 million severance.
Under the terms of his employment contract, Moonves is entitled to the payout only if the investigation finds he was terminated without cause.
Though Moonves could challenge a denial in arbitration, "does he really want to prolong these steamy allegations in the public mind?" Eaton said. "The longer this drags on, the greater a percentage of his obituary will be devoted to this, and not to his impressive professional accomplishments."
The Moonves scandal aside, the board will have a longer-term challenge determining the company's future. Shari Redstone, who controls both CBS and Viacom with her father, Sumner Redstone, attended Tuesday's meeting but did not speak.
Shari Redstone has long advocated for a combination of CBS and Viacom. CBS opposes that because it is financially stronger than Viacom. As part of the agreement that led to Moonves' ouster and the board reshuffling, she agreed not to push for a combination for two years. That doesn't mean a surrogate couldn't take her place, however. So the board will have to decide if this is the best move for CBS.
Mae Anderson reported from Atlanta.