CBS Directors, Les Moonves Negotiating His Exit as CEO

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Unbiased board members of

CBS
Corp.

CBS three.13%

are negotiating a doable exit for Chief Govt Leslie Moonves and asking for assurances of autonomy from controlling shareholder Nationwide Amusements Inc., individuals accustomed to the matter mentioned.

The fast-moving talks come as CBS and Nationwide Amusements, led by Shari Redstone, try to settle a authorized dispute over management of the media firm that’s scheduled for trial in Delaware subsequent month.

If phrases will be reached on an exit for Mr. Moonves, CBS Chief Working Officer Joe Ianniello would turn into interim chief govt whereas a seek for a everlasting substitute is launched, the individuals mentioned.

Mr. Moonves is being investigated by regulation corporations appointed by CBS’s board over sexual-harassment allegations reported by the New Yorker. His relationship with Ms. Redstone has turn into antagonistic over the previous yr as the 2 have battled over her want to merge CBS and

Viacom
Inc.

One of many key points within the talks, one of many individuals accustomed to the matter mentioned, are the phrases of the Redstone household belief, which restrict the flexibility of CBS and company sibling Viacom to be bought to a big purchaser after the loss of life of Ms. Redstone’s father, 95-year-old Sumner Redstone. Nationwide Amusements has mentioned the belief will be amended.

CBS desires assurances that it might pursue offers with out concern that Ms. Redstone would stand in the way in which, the particular person mentioned.

Nationwide Amusements has denied standing in the way in which of offers, and is open to all alternatives which are in one of the best curiosity of CBS shareholders, one other particular person accustomed to the scenario mentioned.

CNBC earlier reported the board’s exit negotiations with Mr. Moonves.

The exit of Mr. Moonves, who has been on the broadcaster’s helm since 2006, could be a surprising downfall for an govt who has earned reward from Wall Road and rivals within the business for guiding CBS to turn into the preferred community whereas navigating turmoil within the TV business. On his watch, CBS’s premium cable channel Showtime has additionally grown and the corporate has launched new digital properties resembling subscription streaming service CBS All Entry.

The New Yorker article revealed final month included allegations from a number of girls that Mr. Moonves sexually harassed them throughout his profession. He has mentioned he regretted any conduct that made girls uncomfortable however denied any bodily assaults or retaliating or harming anybody’s profession when his advances have been rebuffed.

The scale of a possible payout to Mr. Moonves wasn’t clear. Any exit settlement is prone to comprise a means for CBS to recoup among the compensation if the regulation corporations’ investigation—which can proceed even when Mr. Moonves leaves—finds proof of enough wrongdoing, in keeping with an individual accustomed to the matter.

His contract requires a severance package deal of greater than $180 million if he have been terminated “with out trigger,” together with $117.5 million in wage and bonus awards, plus vesting of inventory value one other $65 million, in keeping with a securities submitting. This consists of $10 million that might be payable until Mr. Moonves elects to offer providers as a producer.

The phrases could be comparable if he have been terminated “with good motive,” besides he would get $115 million in wage and bonus awards. Mr. Moonves’s contract is up in June of 2021.

Whereas the talks are progressing and an settlement might come inside the subsequent a number of days, individuals near the matter warned there is no such thing as a assure of a decision.

Ms. Redstone has expressed issues about Mr. Ianniello as a possible successor to Mr. Moonves, however the unbiased board members are advocating that he not less than take the reins on an interim foundation. Mr. Ianniello has been one in all Mr. Moonves’s high lieutenants for practically a decade.

The unbiased board members need assurances that Ms. Redstone received’t use her household’s possession of practically 80% of CBS’s voting inventory to overrule the need of the CBS board, in keeping with the particular person. That overwhelming management provides her household the facility to switch the complete CBS board.

In Could, CBS sought to dilute Nationwide Amusements’ voting management to nearer to 20% by a dividend of voting inventory to all shareholders. Nationwide Amusements thwarted that transfer by altering CBS’s bylaws in order that such a maneuver would require a 90% supermajority vote. A trial to resolve the problems round management of CBS is about to start in Delaware Chancery Court docket on Oct. three.

The CBS board and the Redstones are also discussing settling that litigation as a part of their broader detente, The Wall Road Journal reported Wednesday.

As a part of the talks to finish the authorized dispute, Ms. Redstone and Nationwide Amusements are looking for to switch a number of CBS board members with new unbiased members, in keeping with individuals accustomed to the matter. Dick Parsons, a well-regarded media govt who has been nominated to the CBS board, is concerned in a seek for new administrators.

There was concern at CBS and inside its board that Ms. Redstone would attempt to stack the board with individuals near her, in keeping with individuals accustomed to the matter. At the moment, there are three CBS board members with ties to Ms. Redstone or Nationwide Amusements on the CBS board.

Individuals near CBS and the unbiased board members say Ms. Redstone and Nationwide Amusements have indicated that the brand new members could be really unbiased, from each administration and the controlling shareholder.

CBS unbiased board members have additionally been involved concerning the revelation, first reported by the Journal, that the belief that can management Viacom and CBS when Mr. Redstone dies or is deemed incapacitated prohibits the trustees from getting into into any merger that would depart Nationwide Amusements with lower than 30% of the voting management of the ensuing enterprise.

Nationwide Amusements has mentioned that the belief will be amended, however the board members need extra assurances, in keeping with one of many individuals accustomed to the matter.

Write to Joe Flint at joe.flint@wsj.com and Keach Hagey at keach.hagey@wsj.com



Supply hyperlink – https://www.wsj.com/articles/cbs-directors-les-moonves-negotiating-his-exit-as-ceo-1536248559?mod=pls_whats_news_us_business_f

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