Moonves inks through '11
Stock performance key to new dealLeslie Moonves is staying with CBS Corp. at least through Sept. 30, 2011, under a new employment agreement that extends his contract and ties his compensation closer to the company's stock performance.
The arrangement supersedes his previous contract, which was set to expire in June 2009.
Under the terms of the deal, Moonves, the president and CEO, will make an annual salary of $3.5 million, down from $5.9 million in the previous contract, which included $2.9 million in deferred compensation.
However, Moonves now will be eligible for an annual performance-based bonus, and he will receive equity-based compensation.
Moonves will get restricted stock units with a value of $7.6 million per year. The company this week will grant him a one-time option to purchase 5 million shares of CBS Class B common stock.
Redstone, who controls CBS Corp. and Viacom, also recently shifted his compensation to a more performance-based model.
It is hard to predict whether Moonves will end up earning more or less under his new employment deal as things will largely depend on how the stock performs. Observers, however, said Tuesday's announcement comes after a recent pullback in CBS shares, which could allow for future upside.
The company's Class B common stock closed Tuesday at $29.36, closer to its 52-week low of $27.33 than its high of $35.75. Some analysts have reduced their third-quarter financial projections, citing potential advertising challenges amid an uncertain U.S. economic outlook and the like.
CBS Corp. said Tuesday that it also has provided incentives for Moonves to continue his relationship with the company upon the end of the new employment agreement.
"I look forward to working with Les for many years to come," CBS executive chairman Redstone said. "What he has accomplished since we unleashed the new CBS Corp. has exceeded all my expectations. 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."
Said Moonves: "I love this great company and the talented people with whom I am privileged to work. I am very excited about our future together and confident in our continued success."