Viacom and CBS followed last week’s merger news with regulatory filings Monday that laid out some key details of their long-awaited reunion, including executive compensation, board makeup and breakup fees.
Breakup fees are always part of the mix when it comes to mergers, but forgive the skeptics in media and on Wall Street if they find this clause to be especially relevant in the case of CBS and Viacom. In the SEC filings, if Viacom were to terminate the deal before May 13, 2020, it would owe CBS $373 million. If CBS were to pull out before that date, it would have to pay Viacom $560 million.
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Bob Bakish, who has led Viacom as CEO since 2016 and is in position to lead the combined entity, has been signed to a four-year deal paying him a base salary of $3.1 million per year. He will be eligible to receive equity compensation with an aggregate target value of $16 million, plus a target annual cash bonus of $12.4 million, with the actual bonus determined based on a set of formulas.
Joe Ianniello, who will be chairman and CEO of CBS, reporting to Bakish, has also re-upped but only through the start of 2021. Under the terms of his contract at CBS, Ianniello will get a lump-sum payment of $70 million upon the close of the merger because he wasn’t given the top job.
Asked in a CNBC interview last week about the payout to Ianniello, Bakish said, “His contract is what his contract is.” Emphasizing the two executives’ 20-year connection, which began when CBS and Viacom were part of the same company, Bakish added, “We are thrilled to be moving forward together. We are going to create a lot of value here. And we can’t wait to get on with it.”
The total package of more than $31 million represents a significant hike for Bakish, who made $20 million in 2017 and 2018. Bakish’s predecessor Philippe Dauman, turned heads by pocketing $93 million in 2016 after presiding over years of decline at the company. Across the aisle at CBS, former CEO Les Moonves had pay packages close to $70 million in recent years.
Christina Spade, who became CFO of CBS last fall, will be CFO of the combined company at a base salary of $1.4 million. Viacom CFO Wade Davis will exit after the close of the merger.
The ViacomCBS board of directors will include six CBS directors: Candace K. Beinecke, Barbara M. Byrne, Brian Goldner, Linda M. Griego, Susan Schuman and Frederick O. Terrell; and four Viacom directors: Judith McHale, Ronald Nelson, Charles E. Phillips, Jr. and Nicole Seligman. Directors designated by National Amusements, controlling shareholder of Viacom and CBS, will include NAI chief Shari Redstone, who will serve as non-executive chair, Robert N. Klieger, and Bakish.
Strauss Zelnick, the media and videogame executive who had served as acting chairman of CBS in recent months, will not be on the ViacomCBS board.
The $30 billion, all-stock merger is expected to get the blessing of federal regulators by the end of 2019.