CBS Extends Les Moonves’ Contract 2-Years To Mid-2021

Leslie Moonves

CBS just announced that it has extended CEO Les Moonves’ contract by two years to June 30, 2021 — with terms that guarantee he’ll continue to be one of the nation’s highest paid executives.

His salary will stay constant and, the release says, he’ll “continue to be eligible for an annual bonus and will receive long-term, performance-based incentives that further tie the value of the agreement to the success of the Company and its stock.”

The company hasn’t yet disclosed the estimated dollar value of the incentives.

When his term is up, he will become a senior advisor for five additional years with an option to “include an option to establish a production company under CBS’ auspices.”

Moonves’ contract was extended in 2014, and amended last year when he was also named Chairman — replacing Sumner Redstone, who turns 94 next week. Redstone’s National Amusements controls 80% of CBS’ voting shares; those interests are now controlled by his daughter, Shari.

Moonves was one of the nation’s 10 highest paid CEOs last year, making $69.6 million — a 22.5% increase vs. 2015 — according to CBS’ latest proxy. His latest package included a $3.5 million salary, a $32.0 million bonus, and $31.9 million in stock awards.

Over the last 12 months CBS shares have appreciated nearly 17%, roughly in line with the Standard & Poors’ 500. The company benefited from Moonves’ decision to sell its radio division, and investors’ belief that the Trump administration will relax restrictions on TV station ownership — potentially enabling the broadcaster to grow.

Investor advisory firms say that CBS’ board is overly generous with Moonves.

Glass Lewis gave the company a “D” grade for its pay-for-performance standards. Among other things, the firm dings directors for focusing too much on short term gains, and paying the CEO vastly more than other executives — suggesting that he, alone, is responsible for CBS’ successes.

Institutional Shareholder Services gave CBS its lowest corporate governance grade, and urged investors to oppose all but one of the candidates for director who were elected at the company’s annual meeting on Friday.

It endorsed a newcomer, Harvard Law School Dean Martha Minow, but said the incumbent board members showed “persistent poor stewardship of the company’s executive compensation programs and practices.”

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