CBS Corp. shares rebounded following a report that Chief Executive Officer Les Moonves is negotiating an exit package, a sign investors have made peace with the embattled longtime leader parting ways.
CNBC said on Thursday that the board has offered Moonves a roughly $100 million package, comprised almost entirely of company stock. The story sent the shares sliding in early trading, but they soon rallied. By late morning in New York, they were up as much as 5.1 percent to $55.66, marking the biggest gain in almost four months.
Under Moonves’s contract, the 68-year-old could be owed as much as $180 million in severance — as well as a production deal — but the CEO is facing challenges on a number of fronts. He’s been battling CBS controlling shareholder National Amusements Inc. over board control, as well as allegations that he sexually harassed several women and fostered a toxic culture.
Joseph Ianniello, CBS’s chief operating officer, is in line to take the helm — at least for now — if Moonves is out the door. The company wants the right to claw back some of Moonves’s exit package if an ongoing internal investigation finds that Moonves committed inappropriate acts, CNBC reported.
A representative for New York-based CBS didn’t respond to a request for comment.
A New Yorker article alleged that Moonves harassed women and allowed such incidents to be covered up. CBS has said it takes the claims seriously and that independent directors of the company are investigating.
CBS and National Amusements also are negotiating to end the board dispute, which is set to go to trial next month. The resolution would let National Amusements President Shari Redstone appoint new directors to CBS’s board. Redstone would also pledge not to pursue a merger between CBS and Viacom Inc., which is also controlled by NAI, the people said.
While it’s possible this settlement and CBS’s pact with Moonves could be announced simultaneously, they aren’t linked, CNBC reported.
A representative for Shari Redstone declined to comment.
CBS and NAI are set to face off in a Delaware court over whether CBS directors, led by Moonves, can strip NAI of its controlling interest in the company. CBS has opposed a merger with Viacom, the owner of cable networks such as MTV and Nickelodeon. The two sides disagreed over who will run the combined entity.
NAI had asked independent directors of CBS and Viacom to explore a merger between the companies. The directors eventually reached agreement on economic terms of a deal, but they couldn’t settle the issue of leadership: CBS had pushed for Moonves and Ianniello to lead the merged entity, while NAI wanted Viacom boss Bob Bakish to also be part of the team.
But in May, NAI told Viacom directors it was no longer interested in merging the two companies, according to court filings. NAI didn’t “intend to force a CBS/Viacom merger, whether by removing and replacing CBS directors or otherwise,’’ NAI executives said in the Delaware Chancery Court suit. That decision was made before CBS’s board approved a plan to dilute the Redstone’s voting control as a defensive measure against the Viacom merger, NAI said.