CBS has made it official: Leslie Moonves is stepping down as chairman-CEO amid a cascade of sexual assault allegations, and CBS and National Amusements Inc. have settled the legal battle that erupted in May over control of the company.
CBS chief operating officer Joe Ianniello has been named interim CEO of the company. The shakeup at the top includes the addition of six new board members to the 13-member CBS board, which has been at odds with NAI.
“CBS is an organization of talented and dedicated people who have created one of the most successful media companies in the world,” said Shari Redstone, CBS vice chair and president of NAI. “Today’s resolution will benefit all shareholders, allowing us to focus on the business of running CBS – and transforming it for the future. We are confident in Joe’s ability to serve as acting CEO and delighted to welcome our new directors, who bring valuable and diverse expertise and a strong commitment to corporate governance.”
The new board members are: Candace Beinecke, Barbara Byrne, Brian Goldner, Richard D. Parsons, Susan Schuman and Strauss Zelnick. Board members leaving CBS are: Arnold Kopelson, Leonard Goldberg, Charles Gifford, David Andelman and Doug Morris.
The settlement agreement calls for CBS and Moonves to donate $20 million to organizations that support the #MeToo movement and equality for workplace in the women — a recognition of the disturbing allegations leveled against Moonves by a dozen women, as reported in two exposes by investigative reporter Ronan Farrow for the New Yorker.
The size of the potential $100 million-plus Moonves severance package has generated criticism from advocacy groups, including Time’s Up, given the severity of the allegations against him.
“The donation, which will be made immediately, has been deducted from any severance benefits that may be due Moonves following the Board’s ongoing independent investigation led by Covington & Burling and Debevoise & Plimpton,” CBS said. “Moonves will not receive any severance benefits at this time (other than certain fully accrued and vested compensation and benefits); any payments to be made in the future will depend upon the results of the independent investigation and subsequent Board evaluation.”
The agreement further includes a commitment from NAI to back off proposals to merge CBS and Viacom, which NAI also controls, for at least two years. The push to reunite CBS and NAI was part of the friction that led to the legal battle.
“In addition, 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,” the settlement announcement said. “NAI reaffirmed that it will give good faith consideration to any business combination transaction or other strategic alternative that the independent directors believe are in the best interests of the Company and its stockholders.”
Board member Gordon emerged as the dealmaker as CBS became engulfed by the Moonves scandal and the litigation. As the Oct. 3 start date of the trial over the lawsuit approached, Gordon is credited with stepping up efforts to bring the sides to consensus and address the growing problem created by the Moonves controversy.
“We thank Les for his 24 years of service. Among his achievements, he established a strong management team, giving us great confidence as we accelerate our succession plans and provide continuity of leadership,” Gordon said. “This agreement maintains an independent board that is charged with determining the best course for the future of CBS on behalf of all shareholders.”
The upheaval at CBS during the past few month has left insiders reeling, particularly as the company has been a bastion of management stability during Moonves’ 24-year tenure. Moonves has long been a well-liked and respected figure by the rank-and-file, but the sexual assault allegations have taken a huge toll. There has been simmering anger in some quarters that Moonves did not step down earlier in order to spare the company the turmoil of the investigation and the growing public criticism.
Women’s advocacy group UltraViolet, which had called on the board of directors fire Moonves back in July, declared the news of the settlement “a victory,” in a statement Sunday night.
“This is proof that the era where powerful men abused and harassed women without consequence is starting to come to an end, and a testament to the enduring strength and power of the #MeToo movement,” said the statement.
The group also called on CBS to expand the investigation into the culture of CBS, particularly “60 Minutes” executive producer Jeff Fager, who has also been accused of misconduct.
Moonves has been with CBS since 1995. He led the network’s turnaround with such hits as “CSI,” “Survivor,” “Everybody Loves Raymond” and “Two and a Half Men.” He advanced up the corporate ranks, ascending to chairman of CBS Television in 2003 and to CEO of CBS Corp., after it separated from Viacom, in 2006. Moonves was lauded for deftly steering CBS through the digital transition. He led CBS to new heights as it expanded its content operations, transformed its revenue base by pushing hard for retransmission consent fees from MVPD, and as it strategically divested non-core divisions such as its outdoor advertising unit and radio stations.
But Moonves’ legacy has been forever tainted by the revelations of the past few months. This shakeup is hardly the send-off that Moonves, 68, would have hoped for as he prepared to segue out of the CEO role in the coming years. Concerns about succession planning within CBS was another source of concern for Redstone and CBS’ NAI-affiliated board members.
The new CBS board will have Redstone’s imprint with the transition of nearly half of the directors. There is trepidation within CBS about Redstone’s intention for the company and the fates of the many executives who were closely aligned with Moonves.