Photo Credit: Kathy Hutchins
On Wednesday, developments behind the scenes at CBS began to take shape when it was announced that ailing 92-year-old CBS Corporation chairman Sumner Redstone was stepping down from this position due to health concerns. His replacement is CBS Chief executive, Les Moonves, who will assume the role of chairman.
According to the New York Times: “a lawsuit challenging Mr. Redstone’s mental competance raised questions among analysts and investors about whether Mr. Redstone should continue as executive chairman of CBS and Viacom. Mr. Redstone controls about 80 percent of the voting stock in the two companies.”
The shift at CBS came after Mr. Redstone sent a letter Tuesday to Mr. Moonves and CBS directors announcing his resignation, according to one person briefed on the developments who requested anonymity because they were private.
The board subsequently met Wednesday and first offered the chairman position to Mr. Redstone’s daughter, Shari. Ms. Redstone, who now is vice chairwoman of CBS and Viacom, declined and nominated Mr. Moonves for chairman of CBS corporation.. The board voted unanimously for the appointment.
“I have been fortunate to work with Les and he has clearly established himself as a creative and effective leader who understands both the challenges and the opportunities that are shaping today’s media landscape,” Ms. Redstone said in a statement. “I am sure he will make a great chair and I look forward to working with him for many years to come.”
Mr. Moonves, one of the most highly regarded TV executives, has been president and chief executive of CBS since 2006. He will continue in those positions. “I want to thank Sumner for his guidance and strong support over all these years,” Mr. Moonves said in a statement.
Mr. Redstone controls the voting stock in Viacom and CBS through his private holding company, National Amusements. If Mr. Redstone dies or is found to be incapacitated, his stake in National Amusements is to be held by a trust. Voting control will go to seven trustees. Those trustees include Ms. Redstone and Philippe P. Dauman, chief executive of Viacom.
In a separate statement, Ms. Redstone confirmed that the terms of her father’s trust state that she succeed him as nonexecutive chairwoman at both CBS and Viacom. Separately, Ms. Redstone had made a deal with Mr. Moonves for him to take on the chairmanship at CBS, according to people briefed on the discussions.
Moonves is one of the nation’s highest paid executives. He saw $57.2 million in compensation in 2014, CBS reported in its proxy. His packages averaged $62.8 million a year in the five years that ended in 2014. In late 2014, the company extended Moonves’ contract by two years to mid-2019. The agreement included incentives to keep him on board as a “Senior Advisor and/or Producer” for an additional five years after the term ended.
The new CBS chairman is married to The Talk and Big Brother host, Julie Chen.
So, what do you think about Les Moonves position with CBS? With this shift in power at the corporation of CBS, Moonves becomes even more powerful within the industry and more.