Acting Chief Executive Officer of CBS Corp is being taken care of when the company completes its merger with Viacom Inc, even though he won’t lead the company when it is combined. As reported by Bloomberg News, CBS Corp’s Joe Ianniello will collect $100 million in severance and remain chief of CBS with a new 15-month contract setting him up to receive tens of millions of more in salary after the merger is completed, which is currently slated for December.
By: Ellen Cans
The generous package is proof of how eager the broadcasting network is to coax Ianniello, a 22-year company veteran, to support the merger, even though he knows he has no shot at the top position of the new company. It is also another classic example of the Redstone family’s exaggerated compensation practices. The billionaire family, which controls both Viacom and CBS, has been throwing money at executives for years, matching the salaries at Silicon Valley’s tech companies. “CBS and Viacom, given the majority ownership of the Redstones, have always been on the high side—what they want is what happens there,” said Robin Ferracone, CEO of executive compensation consulting firm Farient Advisors. “In this case, you need Joe to get the merger done,” she added. “So you need to make him indifferent to whether he’s going to lose his job or not.”
The company which was founded by Sumner Redstone, now 96, is now being primarily controlled by his daughter Shari. Shari Redstone, 65, has officially served as vice chairman for both firms ever since they split from each other in 2006. She has long been trying to reunify the two companies, and finally the announcement was made in August that a merger had been agreed upon.
Initially, Shari had wanted Les Moonves, then the CEO of CBS, to lead the newly unified company. Since then, however, a feud that erupted between Redstone and the board over control of the company, ended up in the courtroom and put a damper on her relationship with Moonves. Regardless, since then Moonves was forced out of the company after sexually harassment allegations which were further aggravated when the board discovered he had lied to investigators and destroyed evidence. The long-time CEO proved difficult to replace, and his position has still not been fully taken over. Ianniello was the temp replacement, and never considered a true match for Moonves.
Even though Viacom is the smaller of the two joining entities, Shari was intent in making sure Viacom’s CEO Bob Bakish would end up with the top position of the merged company. Usually, the CEO who isn’t picked to lead the company after a merger leaves the company rather than taking on a lower position. That would explain the lavish severance package Ianniello was given.
CBS declined to comment on Ianniello’s compensation.