Will Les Moonves leave with $0, $120 million, or something in between?

Now that CBS Corporation chief executive ...

Posted: Sep 11, 2018 12:23 AM
Updated: Sep 11, 2018 12:23 AM

Now that CBS Corporation chief executive Les Moonves has stepped down, the company wants to shake off the scandal and move on. With an eye to the future, acting CEO Joe Ianniello's first memo to staff on Monday was titled "Looking forward."

But many eyes will still be on Moonves and his potentially gargantuan golden parachute.

Moonves could gain $120 million in severance -- or he could receive far, far less. It all depends on the outcome of the investigation into alleged sexual misconduct in his past.

For the time being, $120 million will sit in a "grantor trust," according to an SEC filing.

"In the event" the CBS board "determines that the company is entitled to terminate Mr. Moonves's employment for cause" -- meaning that he's fired due to credible harassment claims -- the $120 million will return to the company's coffers, according to the filing.

But Moonves could still seek legal recourse in that case.

Only one thing is definite: Moonves and CBS will contribute $20 million "to one or more organizations that support the #MeToo movement and equality for women in the workplace."

According to an SEC filing, Moonves will select the organizations "in consultation with the company."

That $20 million would have been a part of Moonves' severance, for a total pot of $140 million. Instead, the donation will give CBS and Moonves some cover amid criticism of the potential payout.

Moonves was under contract through 2021, making nearly $70 million a year in cash and stock, so he had some negotiating power even as harassment and assault allegations stacked up against him.

Related: A stunning end to a historic run for Les Moonves

When Ronan Farrow of The New Yorker published the first story about Moonves in July, Moonves acknowledged making some mistakes in the past, but said he had never abused his power. The CBS board of directors, which was considered to be very pro-Moonves, hired two law firms to investigate, but did not suspend or otherwise reprimand him.

While the law firms started their work, Farrow kept reporting. On Sunday morning he published a follow-up story with additional and even more serious allegations.

By then, Moonves and the CBS board had mutually agreed that he should step down.

The settlement was made official on Sunday night.

Moonves said in a statement that the "untrue allegations" published by Farrow "are not consistent with who I am."

What about the money?

According to the SEC filing, CBS will be paying the $120 million into the trust sometime in the next month.

But it will take a while to know what happens.

First the investigators have to turn in their report. Then the newly reshaped board -- with six new independent directors as of Sunday night -- will evaluate the report.

The findings are expected to remain a secret, much to the chagrin of activists who say it should be public.

"The board will make a determination whether the company has grounds to terminate the employment of Mr. Moonves for cause under his employment agreement within thirty (30) days following completion of the final report of the independent investigators in the current internal investigation, but in no event later than January 31, 2019," the SEC filing stated.

Even then, the result might not be final. Moonves has the right to take CBS into binding arbitration.

A legal battle might ensue and an arbitrator might end up deciding how much money Moonves is owed.

The possibility of a nine-figure payout has already stirred controversy in Hollywood and elsewhere.

Rachel Bloom, the co-creator and star of "Crazy Ex Girlfriend" on the CW, which is half-owned by CBS, shared Farrow's story on Twitter and said, "As an employee of CBS, I would just like to say that Les Moonves should be fired without getting a f---ing dollar. The actions described in this article are those of sexual assault and shame on anyone else in the corporation who knew about his crimes."

After Moonves' exit was announced and CBS said he wouldn't be getting any severance for the time being, Bloom posted a new message: "Good." To CBS, she said, invoking Rosh Hashanah, "in the spirit of the new year, let's make this the beginning of a new era."

Ianniello struck a similar tone in his memo.

He said Sunday's shakeup "marks a major transition for all of us as Leslie Moonves departs from CBS."

"Les' departure occurs at a time when we are operating from a position of great strategic strength," Ianniello asserted. "As you all know, there is amazing work going on across the Company, and I feel confident we have the best people in the business to continue building on our outstanding success."

According to the SEC filing, Moonves may keep an office at CBS for the time being, partly to help with the corporate "transition."

CBS stock was trading down about 3.5% in midday trading on Monday.

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