ViacomCBS CEO Bob Bakish's Pay to Rise to $31M After Merger

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Viacom CEO Bob Bakish

An SEC filing also discloses steep termination fees if Viacom or CBS calls off the deal.

Viacom CEO Bob Bakish will see his compensation rise by about 50 percent once he assumes control of a combined ViacomCBS.

According to a merger filing with the Securities and Exchange Commission on Monday, Bakish will be eligible for $31.5 million in compensation, split between a $3.1 million salary, annual equity grants valued at $16 million and an annual bonus valued at $12.4 million. 

The final compensation will fluctuate based on performance and stock price. Bakish will also receive a one-time RSU grant valued at $5 million. (Bakish's 2018 compensation was $20.3 million.

In addition, CBS has signed CEO Joe Ianniello to a new contract covering his role overseeing the CBS assets of the combined company. The contract extends his role as acting CEO of CBS through the completion of the merger or February 2020, whichever comes first, though the company has the option to extend his contract on a month by month basis beyond February.

Bakish’s contract will extend for four years from the closing of the deal, and will be subject to one-year extensions. Ianniello, meanwhile, will have a fixed term commencing on the deal's closing date, lasting for 15 months.

Ianniello will also receive a one-time grant of 450,000 RSUs. The company also entered into a new contract with CFO Christina Spade, who will assume the same role with the combined company.

The board of ViacomCBS will include six current CBS board members — Candace K. Beinecke, Barbara M. Byrne, Brian Goldner, Linda M. Griego, Susan Schuman and Frederick O. Terrell — and four current Viacom board members — Judith McHale, Ronald Nelson, Charles E. Phillips, Jr. and Nicole Seligman — as well as Bakish and National Amusements' Robert N. Klieger. Shari Redstone will be non-executive chair of the board.

The agreement also notes the termination fees that each company will need to pay if the deal is unable to be closed. If Viacom terminates the agreement, it will need to pay CBS $373 million, and if CBS terminates the agreement, it will need to pay Viacom $560 million. For comparison, Disney agreed to pay 21st Century Fox $2.5 billion if that merger was blocked.

The merger agreement also includes an "Extraordinary Transactions" clause in a governance agreement signed between the companies and National Amusements. The clause says that the "NAI Entities acknowledge and affirm they are open to exploring expressions of interest by third parties in potential business combinations or other strategic alternatives," and adds that until the second anniversary of the closing, "the NAI Entities hereby agree to give good faith consideration to any business combination transaction or other strategic alternative involving the Surviving Corporation that the Unaffiliated Directors determine may be in the best interests of the Surviving Corporation and its stockholders."