By Benjamin Mullin
The merger of Viacom Inc. and CBS Corp. will be lucrative for
the top executives of both companies.
Viacom Chief Executive Bob Bakish, who will become president and
CEO of the combined company, ViacomCBS, has signed a new contract
ending four years after the deal closes. The contract lists salary,
bonuses and other incentives worth about $31 million a year,
roughly 55% higher than Mr. Bakish's total compensation in the most
recent fiscal year, the company said in a securities filing.
Acting CBS Chief Executive Joe Ianniello, who will be chairman
and CEO of CBS at ViacomCBS reporting to Mr. Bakish, will receive a
payout of about $70 million when the deal closes. That payment
resulted from a provision in his old contract at CBS that entitled
him to a lump sum if he wasn't named CEO of the combined company in
the event of a merger.
Viacom and CBS -- codenamed "Venus" and "Comet" -- last week
struck a deal to reunite the empire of media mogul Sumner Redstone,
creating a conglomerate with a valuation of $27 billion. The deal
will combine Viacom's popular cable channels, including Nickelodeon
and Comedy Central, as well as its Paramount movie and TV studio,
with the CBS broadcast network and premium cable channel
Showtime.
Directors of National Amusements Inc., the holding company that
controls CBS and Viacom, voted to approve the merger earlier last
week, according to a person familiar with the matter. The board,
which includes Shari Redstone and her father, Sumner, voted
unanimously in favor of the deal, the person said.
Mr. Bakish's new base salary is $3.1 million, an increase of
about 3% from his previous salary of $3 million, according to the
filing. He also is eligible for a bonus of $12.4 million, an
increase of 77% from his previous target bonus of $7 million, as
well as a long-term incentive package worth $16 million, an
increase of about 60% over his previous incentive package worth $10
million.
Mr. Bakish will also be given a one-time stock grant of
ViacomCBS shares worth $5 million. A $31 million pay package would
make Mr. Bakish the 12th highest-paid CEO in the S&P 500, where
median total pay last year was about $12.5 million, according to a
Wall Street Journal analysis of 2018 pay data from MyLogIQ LLC,
omitting companies that changed CEOs during the year.
It would rank him fifth among CEOs in the
media-and-entertainment industry group who have been on the job for
at least a year. The two highest-paid media and entertainment CEOs
were Discovery Communications Inc.'s CEO David Zaslav and Walt
Disney Co.'s Robert Iger, whose total 2018 compensation --
including performance incentives -- was about $129 million and $66
million, respectively.
Mr. Bakish's predecessors at Viacom and CBS have made
considerably more than what he is set to earn as chief of the
combined company. CBS reported paying Leslie Moonves more than $69
million each year in 2017 and 2016, while Viacom reported paying
Philippe Dauman $93 million in 2016, his last year on the job. Both
boards' composition was drastically different at the time.
Mr. Bakish has helmed Viacom since late 2016 and has sought to
help the company rebound from years of sinking TV ratings and
battles with major distributors. He has prioritized maintaining
carriage for the company's channels on major cable and satellite
providers -- accepting lower fees as a trade-off -- and has pushed
to expand reach on digital outlets and streaming services.
Ahead of the deal, Mr. Ianniello signed a contract that keeps
both his $3 million salary and his target bonuses flat. Mr.
Ianniello is receiving a one-time grant of 450,000 ViacomCBS shares
after the deal closes, according to the filing. The employment
agreement says that grant is aimed at aligning Mr. Ianniello's
interests with those of shareholders and making up for the CBS
stock grants that Mr. Ianniello is forgoing by signing a new
contract. That contract expires 15 months after the deal
closes.
Retaining Mr. Ianiello was a priority, in part, because of his
deep knowledge of the company's broadcast operations, its terms
with distributors and its digital partnerships, according to people
familiar with the matter. Mr. Ianniello's employment agreement said
only ViacomCBS directors have the authority to fire him or change
his compensation -- details that the Journal reported last
week.
In the two years following the deal's close, National Amusements
has agreed to consider in good faith any offers that would be made
for the combined company or any other combination that could be
considered in shareholders' best interests, according to the
filing. The filing also said Viacom would be required to pay CBS a
breakup fee of $373 million if it terminates the deal, and CBS
would be required to pay Viacom $560 million if it does so.
Viacom and CBS also named the new directors of ViacomCBS. The
new board allots six seats for directors from CBS, four for
directors from Viacom, two from National Amusements and one for Mr.
Bakish.
The directors from National Amusements are Ms. Redstone, who
will be chair of ViacomCBS, and Robert Klieger, a current CBS
director and an attorney for Hueston Hennigan LLP. The directors
filling the board seats allotted for CBS are Candace Beinecke,
Barbara Byrne, Brian Goldner, Susan Schuman, Linda M. Griego and
Frederick O. Terrell. The Viacom directors are Nicole Seligman,
Ronald Nelson, Judith McHale and Charles E. Phillips, Jr.
Strauss Zelnick, the acting chairman of CBS and chief executive
of Take-Two Interactive Software Inc., won't be on the board of
ViacomCBS.
The companies on Monday also listed compensation details for CBS
Chief Financial Officer Christina Spade, who will be the CFO of
ViacomCBS. Ms. Spade will have a base salary of $1.4 million.
--Theo Francis contributed to this article.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com
(END) Dow Jones Newswires
August 19, 2019 18:38 ET (22:38 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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