CEO stays at helm until 2011

CBS Corp. has struck a new long-term employment contract with prexy and CEO Leslie Moonves that will keep him at the helm of the Eye through 2011.

Pact reduces his base annual compensation to $3.5 million from $5.9 million but adds incentives that will allow him to pull down more coin if CBS Corp. stock does well. Moonves’ previous rich pay package — the Associated Press estimated his total 2006 haul at $24.5 million, including a $15 million bonus — had been a lightning rod for corporate governance watchdog groups.

Under the new agreement, Moonves will have the opportunity to buy 5 million shares in CBS stock options that will vest in installments over the next four years. He will also be eligible for a performance-based bonus on top of his base salary.

CBS Corp. executive chairman Sumner Redstone was effusive in his praise of Moonves.

“What he has accomplished since we unleashed the new CBS Corp. has exceeded all my expectations,” he said. “There is no better CEO in America, and I have no doubt that his success will only continue as he leads CBS into the next decade.”

Decision to reup Moonves comes as no surprise. He’s cultivated a close relationship with Redstone, and most of the Eye’s key assets remain in solid shape.

Broadcast network has been the most watched of the webs for the past four seasons, though reaching young adults has proved more difficult. The Eye’s programming team is in the process of freshening up the net’s lineup, adding edgier fare in an effort to expand CBS beyond its core crime drama sked.

So far this fall, those efforts have met with mixed results. New laffer “The Big Bang Theory” appears to be off to a good start, while there are promising signs for “Moonlight.” New sudser “Cane” is struggling a bit, however.

Under Moonves, the Eye has also started expanding into the music and film businesses, launching a record label and nascent movie unit. It also has become a leader in digital distribution.

Moonves’ previous package, granted after the split of Viacom into two companies in 2006, included $2.9 million per year in deferred compensation. He also earned a $14 million bonus at the time of the Viacom-CBS split.

The company said the new agreement also provides Moonves with up to $7.6 million in “restricted stock units” per year and “incentives for Moonves to continue his relationship with the company upon the end of his employment term.”

CBS Corp. closed at $29.36 on Tuesday, up a tad from Monday.

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