CBS makes case for $69.9 mil haul even as scrutiny of exec pay rises
Leslie Moonves earned his $69.9 million 2011 pay package for diversifying the company’s revenue base, for stock growth that outperformed CBS’ media peers and for his leadership in developing hits for the Eye network. So said the Eye’s corporate stewards Friday in a Securities and Exchange Commission filing.
The disclosure of Moonves’ blockbuster paycheck comes as a time when exec pay is drawing renewed scrutiny from investors and shareholder activists.
The Eye’s chief exec brought home more coin last year than most of his showbiz CEO peers, including Disney’s Bob Iger, Time Warner’s Jeffrey Bewkes and News Corp.’s Rupert Murdoch. Moonves’ compensation climbed from $57.7 million in 2010 and from $43.2 million in 2009.
The rationale for Moonves’ haul was laid out in the proxy statement filed in advance of the Eye’s May 24 annual shareholders meeting.
Among the details offered to bolster the case is that the digital licensing deals CBS struck last year with Netflix and Amazon have generated more than $250 million in incremental revenue — aka found money. Better still, the filing noted, those pacts involve less than 10% of the company’s library titles, suggested that there’s still more money to be mined.
CBS’ senior management has succeeded in the “revenue diversification strategy” designed to make CBS Corp. less dependent on advertising revenue and thus less exposed to the gyrations of the economy. The proxy statement cited that CBS’ non-advertising revenues grew to 37% of its total revenue last year, up from 28% four years ago.
“This dramatic shift principally resulted from the company’s continued accomplishments during 2011 in content monetization and international expansion,” the filing stated.
The rebounding stock market also lifted all boats at CBS. The Eye’s share price soared 42.5% in 2011, far exceeding the average 11% growth rate of its media peers, according to the filing.
Moonves’ “leadership in connection with the creation of premium content” earned him a special $7.5 million cash payment for 2011. That was on top of his regular $20 million bonus and $3.5 million base salary. The seven-figure nod for premium content is a recognition of the Eye’s strong perf in the 2011-12 TV season, with frosh hits “2 Broke Girls” and “Person of Interest” added to its primetime arsenal.
The biggest chunk of Moonves’ earnings, however, came from stock and option awards valued at nearly $36 million. He also received $1.6 million in “other compensation,” which included $557,000 for travel expenses, $500,000 to build a screening room in his home and $383,000 for security services.
Although shareholder complaints about swelling exec pay packages are on the rise, there won’t be any drama on the issue at CBS’ meeting in Gotham next month. CBS chairman Sumner Redstone controls 79.1% of the Class A voting shares in CBS, while the vast majority of Eye shareholders (including Moonves) hold non-voting Class B stock.
In his capacity as chairman of CBS’ board of directors, the 88-year-old Redstone, who holds the same post at Viacom, earned a salary of $1.7 million, a $10 million bonus and stock and option awards valued at $8.5 million.