In the wake of sexual assault and harassment allegations – of which six more were revealed over the weekend by The New Yorker – CBS Corp. Chairman, President and CEO Leslie Moonves resigned on Sept. 9.
His exit package was reduced by $20 million, which will go to one or more organizations that support the #MeToo movement and equality for women in the workplace, which organizations have been designated by Moonves in consultation with the company, according to a more-detailed 8-K SEC filing. The other $100 million may be withheld pending completion of an independent investigation into the allegations being led by Covington & Burling LLP and Debevoise & Plimpton LLP.
As part of a settlement between Shari Redstone-led National Amusements Inc. (the controlling stockholder), members of the CBS Board of Directors and related parties, CBS rescinded the previously announced Class A share dividend, and NAI has amended the bylaws to undo the previous amendments that it adopted following filing of the Delaware Chancery Court litigation.
Moonves, who took the chairmanship in 2006, became president and CEO of CBS also in 2006 after Sumner Redstone split the company from Viacom Corp. Joseph Ianniello, a 13-year veteran who has been the chief operating officer since June 2013, will serve as president and Acting CEO while the board conducts a search for a permanent successor. The chairman position will remain open pending the appointment of a permanent CEO.
In addition, five current independent directors and one NAI-affiliated director have stepped down from the board, and six new independent directors have been elected. The new board will be comprised of 11 independent directors and 2 NAI-affiliated directors. The new independent board members are Candace Beinecke, Barbara Byrne, Brian Goldner, Richard D. Parsons, Susan Schuman, and Strauss Zelnick. The following independent directors will remain on the board in addition to Gordon: William Cohen, Gary Countryman, Linda Griego, and Martha Minow. On behalf of NAI, in addition to Shari Redstone, Robert Klieger remains on the board.
On the deal side, according to a press release, NAI confirmed that it has no plans to propose a merger of CBS and Viacom and has agreed that it will make no such proposal for at least two years after the date of the settlement. NAI reaffirmed that it will give good faith consideration to any business combination transaction or other strategic alternatives that the independent directors believe are in the best interests of the Company and its stockholders.
The board will schedule the company’s annual meeting of shareholders for no later than Nov. 30. The Board will decide on whether CBS has grounds to terminate Moonves’ employment “for cause” under his employment agreement within 30 days following completion of the final report of the independent investigators but in no event later than Jan. 31.