As Viacom and CBS continue their discussions about a reunion tour, which are going about as harmoniously as the ones before Guns ‘N’ Roses got back together, the financial stakes of theoretical management change are becoming more clear.
If one extreme scenario reported yesterday actually did come to pass and National Amusements chief Shari Redstone, the controlling shareholder of CBS and Viacom, removed Leslie Moonves as CEO of CBS, the exec would collect an eye-opening $184 million from the company. Details of executive severance compensation packages are spelled out in the company’s SEC filings and proxy statement, and the payout could go even higher depending on stock performance, reaching $280 million or more, according to Bloomberg.
Fox Business Network’s Charlie Gasparino even went so far as to suggest Moonves would almost welcome the ouster, “because of that compensation package and the pain that will be felt on Shari Redstone.”
CBS reacted swiftly to yesterday’s CNBC report that Redstone was weighing dramatic action by issuing a one-line statement. “The industry and the marketplace know Leslie Moonves’ record and we think it speaks for itself,” it read.
As the companies have exchanged merger proposals, Viacom has included a stipulation that Moonves would run the combined company for at least two years. CBS has obviously also pushed for Moonves, but its preferred No. 2 exec would be Chief Operating Officer Joseph Ianniello, instead of Viacom CEO Bob Bakish. That has ruffled feathers at Viacom and also reportedly irked Redstone, who supported Bakish getting the top job in December 2016. A 21-year company veteran, Bakish has led Viacom’s effort to crawl out of a deep hole created by years of infighting and strategic errors by former chief Philippe Dauman. Ianniello, who came up through the business development ranks, has been a key lieutenant who has helped engineer several lucrative distribution and licensing deals for CBS in recent years.
Ianniello, whose contract at CBS runs through 2022, stands to receive $60.5 million were he to be removed, using the same formula of salary, bonus, pension, medical contributions and the value of long-term (stock) awards.
In the SEC filings, CBS stipulates that the stock awards are based on the company’s Class B share price as of December 31, which was $59. (It closed today at $50.07, down nearly 2%.) Ianniello’s agreement does not provide for payments and benefits solely in the event of a change in control. Moonves’ agreement provides for acceleration of his outstanding equity awards in the event that CBS stock ceases to be publicly traded. If such event had occurred on December 31, 2017, Moonves would have gotten nearly $131.2 million.