CBS Corp. (CBS) Chief Executive Les Moonves sought to instill confidence at the media company's annual shareholders meeting in New York Tuesday as the company faces an economic and advertising slump, competition from the rise of digital media and unprecedented financial stress.

Shares of CBS lost nearly three-quarters of their value last year. The company slashed its dividend and Standard & Poor's recently lowered its debt rating to one notch above junk, even after the company took steps to alleviate some pressure by buying back debt with near-term maturities and issuing longer-dated bonds.

Moonves said the company's ability to restructure its debt in a difficult financial environment "reinforced the confidence the financial community has in CBS."

He said the company's stock performance doesn't reflect its underlying business performance and predicted when the economy improves "our stock price will as well." CBS' class B shares have gained 49 cents so far this year, through Monday, and a number of analysts on Wall Street have recently said the stock is poised to perform well in an economic recovery.

On Tuesday, those same CBS shares fell 3.6%, or 31 cents, to $8.37.

For his part, Moonves reiterated his view that the advertising market is showing signs of stabilizing.

"It's too soon to call it a recovery, but the trends and the pacing are encouraging as we look to the back half of the year," he said.

Despite all the pressures weighing on it and its traditional media counterparts, CBS did manage to increase its audience ratings in 2008, while overall audiences shrank at rival networks.

The company has been aggressively touting its position as the TV network with the largest audience as it negotiates with advertisers on upfront deals for the upcoming TV season. It has advocated for broadcast TV as the best form of mass media even as some question the longevity of its business model and media consumption habits change.

In its downgrade last week, Standard & Poors said the extent and pace of a revenue recovery at CBS, particularly at its local TV and radio stations, is highly uncertain amid permanent changes in media markets wrought by the rise of the Internet.

Shareholders at the meeting voted overwhelmingly to approve the company's slate of directors and its various governance proposals, though the results were a foregone conclusion as the company is controlled by media mogul Sumner Redstone's firm, National Amusements Inc., through a dual-class share structure.

Meanwhile, CBS has faced criticism from shareholder advocates. Proxy advisory firm Glass Lewis & Co. gave CBS an "F" grade for its executive compensation practices in 2008 for the fourth year in a row, saying the company "paid significantly more than its peers, but performed worse than its peers." It recommended that shareholders vote to withhold support from the four directors on the company's compensation committee.

For his part, Moonves took a pay cut last year, with his cash salary and bonus declining to $13 million from the nearly $24 million he earned in 2007.

Redstone, who serves as chairman of CBS and Viacom Inc. (VIA), saw his salary and bonus increase to $6.5 million from $6.2 million. He voiced support for Moonves and his team at the meeting and said CBS' "prospects are bright." He didn't address the status of the debt restructuring at National Amusements, which was forced to sell a portion of its non-voting stake in CBS and Viacom last fall after its decline in value tripped loan covenants on the National Amusements' debt burden.

In addition to the compensation committee, Glass Lewis recommended withholding support for Frederic Salerno, the former chief financial officer of Verizon Communications Inc. (VZ), whose daughter works for CBS while he sits on its audit committee, which Glass Lewis believes "should consist solely of independent directors."

It noted Salerno sits on the audit committee of five corporate boards, giving him a heavy work load, and he was a member of the finance and risk committee on the board of Bear Stearns before the investment bank's collapse last year.

Glass Lewis also recommended a vote against CBS' "2009 Long-term Incentive Plan," which it estimates will authorize the company to issue 71.6 million shares that would dilute current shareholders by 9.6%.

In contrast, RiskMetrics Group - another shareholder advisory service - recommended a vote for all the CBS directors and the company's proposals.

-By Nat Worden, Dow Jones Newswires; 201-938-5216; nat.worden@dowjones.com