CBS Says Les Moonves Will Not Receive $120 Million Severance

https://www.nytimes.com/2018/12/17/business/media/les-moonves-cbs-severance.html

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The CBS Corporation, battered by scandal and facing a leadership vacuum, said its former chief executive, Leslie Moonves, misled the company about multiple allegations of sexual misconduct and tried to hide evidence as he made a frenzied attempt to save his legacy and reap a lucrative severance. As a result, the company said Mr. Moonves would not receive his $120 million exit payout.

“We have determined that there are grounds to terminate for cause, including his willful and material misfeasance, violation of company policies and breach of his employment contract, as well as his willful failure to cooperate fully with the company’s investigation,” the CBS board said in a statement on Monday.

The board, which met over several days last week, decided on Monday afternoon after reviewing information gathered by lawyers hired by the company to investigate claims against Mr. Moonves, who was forced out in September, as well as the broader workplace culture at the network.

Mr. Moonves “engaged in multiple acts of serious nonconsensual sexual misconduct in and outside of the workplace, both before and after he came to CBS in 1995,” according to a late November draft of the investigators’ report reviewed by The New York Times.

The lawyers had gathered ample evidence showing Mr. Moonves had violated CBS policies, including lying to investigators and deleting texts that revealed his attempts to silence an accuser. Mr. Moonves has denied all the allegations and said any sexual acts he engaged in were consensual.

[Read more about how Les Moonves tried to silence an accuser.]

The investigators had spoken with Mr. Moonves four times and found him to be “evasive and untruthful at times and to have deliberately lied about and minimized the extent of his sexual misconduct,” according to the draft report.

Mr. Moonves could still contest the board’s ruling and fight for his severance through arbitration. He could argue the company violated the confidentiality terms of his exit agreement when the internal investigation became public.

“The conclusions of the CBS board were foreordained and are without merit,” Andrew Levander, a lawyer for Mr. Moonves, said in a statement. “Consistent with the pattern of leaks that have permeated this ‘process,’ the press was informed of these baseless conclusions before Mr. Moonves, further damaging his name, reputation, career and legacy.”

Mr. Moonves, 69, was a titan in Hollywood, a swaggering executive who led largely on instinct and managed talent through a combination of charisma and manipulation. He shaped the television landscape for more than 30 years with shows across several networks. As a producer, he developed hit after hit, including “Full House” in the 1980s and “ER” and “Friends” in the 1990s. At CBS, he turned a last-place network into the most-watched channel on television with mass-market fare like the police procedural “C.S.I.” and the ratings machine “Big Bang Theory.”

But by September, Mr. Moonves’s career came to a sordid end when he negotiated his exit shortly after 12 women told The New Yorker that he had sexually harassed or assaulted them. Since then, the possibility that he could still receive his lucrative exit package has infuriated many people.

“If it voluntarily paid Moonves, it would have been attacked with pitchforks for rewarding the misbehavior alleged by multiple women,” Erik Gordon, a professor at the University of Michigan’s Ross School of Business, said. “It would have faced a revolt of many of its most talented people, an advertiser boycott, and would have battered CBS’s image more than the Moonves allegations have battered it.”

[The year of sexual harassment allegations at CBS and attempts to cover them up.]

CBS’s board hired two law firms, Debevoise & Plimpton and Covington & Burling, to conduct an independent investigation to determine, in part, if Mr. Moonves had violated the terms of his employment agreement, which would allow the company to withhold his severance.

As part of their investigation, the lawyers interviewed at least 11 of the 17 women who they knew had accused Mr. Moonves of misconduct or harassment and found their accounts to be credible, according to the report. Most of the alleged episodes occurred many years ago.

“I’m sure we all agree that it’s good to have the investigation behind us,” the acting chief executive, Joseph Ianniello, wrote in a companywide email Monday evening. “At the same time, this does not mean that our work is done, or that we don’t have significant improvements that will continue to be made.”

Mr. Ianniello, who is a candidate to succeed Mr. Moonves permanently, included contact information for his office and that of more than a dozen other executives if any employees wanted to register any complaints.

The lawyers who investigated Mr. Moonves wrote in their report that CBS’s anti-harassment and other personnel policies were not as robust as others they had seen at other companies.

“In our view, they have a ‘check-the-box’ quality in wording, managing and enforcement,” the lawyers wrote.

They also called one particular provision of the company’s harassment policies — which explained that employees who complain about discrimination or harassment might experience “negative employment action” that would not be considered retaliation — “tone-deaf” and “highly unusual.”

“It detracts from any message that the company affirmatively encourages employees to raise questions and concerns,” the report said. “It is also likely to exacerbate fears about retaliation, which, based on our interviews, seems to be a particularly acute problem at CBS.”

The report also found that Mr. Moonves and about 30 other senior leaders were typically allowed to sidestep anti-harassment training. Some senior people in the news division historically had their assistants complete the training for them, the lawyers wrote.

In the past 13 months, CBS has undergone a companywide reckoning in the wake of the #MeToo movement. In addition to Mr. Moonves, Jeff Fager, the executive producer of “60 Minutes,” and Charlie Rose, one of the anchors of the network’s morning show, lost their jobs because of allegations about their conduct with CBS employees. Last week, The New York Times reported that the network paid a $9.5 million settlement to the actress Eliza Dushku in January. She claimed she had been written off the series “Bull” because she confronted Michael Weatherly, the show’s star, about harassing her on set.

The CBS board has dealt with its own upheaval. The group was reconstituted in September after the departure of Mr. Moonves, but before that it had become intensely factionalized. In May, several directors, along with Mr. Moonves, sued Shari Redstone, the controlling shareholder of the company, claiming she had breached her fiduciary duty by pushing for a merger with the cable network conglomerate Viacom, which she also controls.

The lawsuit exposed deep rifts within the board, with one group loyal to Ms. Redstone, another to Mr. Moonves and others debating which direction the company should take.

Then in July, The New Yorker published an investigation into Mr. Moonves in which six women accused him of sexual harassment. The board fractured on how to address the issue. Some directors, including Ms. Redstone, thought he had to go. But others continued to support him, based on their longstanding friendship and the fact that Mr. Moonves had been a proven hitmaker, having turned CBS into the most-watched network for over a decade.

In September, after The New Yorker published a second article in which six more women detailed claims against Mr. Moonves, his career was over. The board negotiated a settlement for his departure, which included dissolving the lawsuit against Ms. Redstone. Six new directors were added to the board, which then waited to determine whether Mr. Moonves would get his severance.

Part of Mr. Moonves’s exit package included a $20 million donation to organizations that support equality for women in the workplace. CBS announced last week it has pledged those funds to 18 different organizations.

Mr. Moonves has drawn an annual pay package worth $69.3 million. From 2006 to 2017, Mr. Moonves’s total compensation, including salary and stock awards, totaled more than $1 billion, according to Equilar, a research firm that gathers data on executive pay.