Today’s news that CBS Inc has extended CEO Les Moonves’ contract through September 2011 has set off a spate of rumors that Sumner Redstone will resign soon. I find that hard to believe since the old coot keeps claiming at age 84 he’ll live forever and they’ll have to carry him out of his Viacom office feet first. Or was it that people merely misinterpreted the headline saying “Redstone Re-Signs Moonves”?
Redstone is linking Les’ compensation to stock performance. Moonves gets an option to buy 5 million CBS shares over four years. He’ll also receive $7.6 million a year in restricted stock. Moonves’s salary rises to $3.5 million a year from $3 million, excluding $2.9 million in deferred pay. CBS is also providing Moonves with unspecified incentives to stay with the company beyond his employment contact. Moonves has overseen a 22% rise in CBS shares since the company split from Viacom in January 2006. CBS has more than tripled the quarterly dividend to $.25 a share from $.07 and repurchased at least $3.1 billion of stock.
Moonves’ new contract comes after Redstone cut his own salary and linked his total pay to the stock price at Viacom Inc. CBS rose 7 cents to $29.36 at 4:17 p.m. in New York Stock Exchange composite trading. The shares have fallen 5.8% this year.