CBS Directors, Les Moonves Negotiate Release as CEO

The quick talks are taking place as CBS and National Amusements, led by Shari Redstone, attempt to settle a legal dispute over control of the media company to be tried in Delaware next month.

If conditions are reached for an exit for Mr. Moonves, CBS COO Joe Ianniello will become the interim CEO while a search for a permanent replacement is launched.

Mr. Moonves is being investigated by law firms appointed by the CBS Board of Directors for allegations of sexual harassment reported by the New Yorker. His relationship with Ms. Redstone became antagonistic over the past year as both men struggled with her desire to merge CBS and

Viacom
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One of the key issues in the discussions, one of the people aware of the matter, are the terms of the Redstone family trust, which limit the ability of CBS and the fraternal enterprise Viacom to be sold to a big buyer after the death of Redstone's 95-year-old father, Sumner Redstone. National Amusements stated that the trust can be changed.

CBS wants assurances that it can continue the transactions without fear that Mrs. Redstone will embarrass him, said the person.

National Amusements has denied any impediment to trading and is open to any opportunities that are in the best interests of CBS shareholders, said another person familiar with the situation.

The CNBC had previously announced the exit negotiations of the board with Mr. Moonves.

The release of Moonves, who has been at the helm of the channel since 2006, would be an incredible fall for a leader who has been praised by Wall Street and its rivals for helping CBS become the most popular network in the world. TV industry. CBS's premium cable channel, Showtime, has also grown and the company has introduced new digital properties, such as the CBS All Access subscription streaming service.

The New Yorker article released last month contained allegations by several women that Mr. Moonves had sexually harassed them during his career. He said he regretted any behavior that made women feel uncomfortable, but denied any physical aggression, retaliation, or career damage to anyone when his advances were postponed.

The size of a potential payment to Mr. Moonves was unclear. Any exit agreement should allow CBS to recover some of the compensation if the law firm's investigation – which will continue even if Mr. Moonves leaves – finds evidence of wrongdoing sufficient, according to a report. familiar person.

His contract provides for severance pay of more than $ 180 million if he was fired "without cause", including $ 117.5 million in premiums and bonuses, plus the acquisition of shares with a value of 65 millions of dollars. That includes $ 10 million that would be payable unless Mr. Moonves chooses to provide services as a producer.

The terms would be similar if he was fired "with good reason" except that he would receive $ 115 million in salaries and bonuses. Mr. Moonves' contract is up in June 2021.

As talks progress and an agreement could be reached in the coming days, people close to the case warned that there was no guarantee of resolution.

Redstone has expressed her concerns about Mr. Ianniello as a potential successor to Mr. Moonves, but the independent board members at least advocate taking the lead. Mr. Ianniello has been one of Mr. Moonves' senior lieutenants for nearly a decade.

The independent board members want assurances that Redstone will not use her family's ownership of nearly 80% of CBS's voting stock to override CBS's board, depending on the individual. This overwhelming control gives his family the power to replace the entire CBS board.

In May, CBS sought to reduce control of National Amusements' vote to nearly 20% through a dividend on voting shares for all shareholders. National Amusements thwarted this decision by amending CAS regulations, so that such a move would require a qualified majority vote of 90%. A trial to resolve the issues surrounding the CBS check is scheduled to begin on October 3 at the Delaware Chancery Court.

The Wall Board Journal reported Wednesday that the CBS board of directors and the Redstones were also discussing the settlement of the dispute as part of their general relaxation.

As part of the talks to end the legal dispute, Redstone and National Amusements are seeking to replace several members of the CBS board with new independent members, according to familiar people. Dick Parsons, a well-known media director who has been appointed to the CBS board of directors, is involved in finding new directors.

CBS and its board of directors feared that Ms. Redstone would try to stack the table with people close to her, according to people familiar with the subject. At present, three members of the CBS Board of Directors have links with Ms. Redstone or national entertainment on the CBS Board of Directors.

People close to CBS and independent board members say Redstone and National Amusements have said the new members would be truly independent, both from management and the majority shareholder.

The independent members of the CBS Board of Directors were also concerned about the disclosure, reported for the first time by the Journal, that the trust that will control Viacom and CBS upon the death of less than 30% of the voting control of the resulting enterprise.

National Amusements said that trust can be changed, but council members want more assurance, according to one of the people familiar with the issue.

Write to Joe Flint at [email protected] and Keach Hagey at [email protected]