CBS Corporation announced a settlement agreement with major shareholder National Amusements, Inc. and its owners, the Redstone family after the bitter battle that had moved to Delaware Chancery Court.
The settlement includes the exit of CBS CEO Les Moonves, who has been facing allegations of sexual misconduct, and a big contribution to organizations affiliated with the “#Me Too” movement.
Moonves had been fighting efforts to merge the Redstones’ Viacom with CBS, but faced a growing number of sexual harassmen allegations.
The Boards of Directors of CBS and NAI agreed to dismiss their pending litigation in Delaware.
The full Board of CBS (following the unanimous recommendation of the Special Committee of the Board) has unanimously rescinded the previously announced Class A share dividend, and NAI has amended the bylaws to undo the previous amendments that it adopted following filing of the Delaware litigation.
CBS Chief Operating Officer Joseph Ianniello will serve as President and Acting CEO while the Board conducts a search for a permanent successor. Ianniello, who joined the Company in 2005, has been COO of CBS since June 2013. The Chairman position will remain open pending the appointment of a permanent CEO.
Moonves and CBS will donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace.
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.
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 board evaluation.
In keeping with CBS’ and NAI’s commitment to Board independence, five current independent directors and one NAI-affiliated director have stepped down from the board, and six new independent directors have been elected to the board.
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.
Vice Chair Shari Redstone said, “CBS is an organization of talented and dedicated people who have created one of the most successful media companies in the world. 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.”
Lead Independent Director Bruce Gordon said, “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. This agreement maintains an independent Board that is charged with determining the best course for the future of CBS on behalf of all shareholders.”
