CBS holds an annual meeting without Les Moonves at the helm

Moonves accused of destroying evidence

The last time CBS Corp. had an annual shareholders meeting without Leslie Moonves at the helm was in 2005, when the biggest show on TV was Fox's "American Idol," a video website called YouTube was a few months old, and Netflix's only line of business was delivering DVDs by mail.

On Tuesday, the CBS shareholders meeting took place against the backdrop of a dozen protesters from the feminist groups NOW-NYC and UltraViolet demanding that the company deny any severance payout to Moonves, who was ousted as CEO on Sept. 9 after multiple allegations of sexual misconduct.

The meeting wrapped up in less than 30 minutes, with shareholders voting to elect six new board members and re-elect five others. The board's first major task will be to decide on Moonves' $120 million exit package, conditioned on the results of a company investigation into his conduct. The board hired two law firms in August to investigate the allegations, and the report is expected to be presented to the board by a Jan. 31 deadline, although it could come much sooner.

CBS Moonves Shareholders
About a dozen protestors outside the CBS Corp. annual shareholders meeting on Tuesday, Dec. 11, urged the media company's board to deny a $120 million severance payout to Les Moonves, who was ousted as CEO on Sept. 9 after multiple allegations of sexual misconduct.   Seth Wenig / AP

According to a New York Times article published last week, a draft of the investigators' report lists additional allegations of sexual misconduct against Moonves and finds that he lied to company lawyers and otherwise obstructed their investigation. If true, that narrative almost certainly dooms a significant payout for Moonves. An attorney for Moonves has said the executive denies the misconduct allegations and has cooperated fully with the company's investigations.

CBS News has not reviewed the report, and it's unclear how much of it the board plans to make public. Many CBS stock analysts, however, say that board transparency is the best way to assuage investor concerns.

"I think they want to make sure that they look like they're taking the report seriously and that they're going to do something to change the culture there," said Neil Macker, senior equity analyst at Morningstar, speaking of the board members shareholders voted to install Tuesday. "If the reports we saw last week are true about the conduct there, they'll want to show that the company is trying to put the framework in place to make sure these types of things don't happen again."

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Six of 11 board members were replaced on Moonves' departure. Key CBS executives have also followed Moonves out, including longtime corporate communications head Gil Schwartz and "60 Minutes" executive producer Jeff Fager. 

But some analysts say the company hasn't gone far enough to clean house. "The problem with CBS is it's clear there was a lot of poor corporate governance and behavior. The new board literally needs to drain the swamp," said Richard Greenfield, media and tech analyst for BTIG.

The CBS board's compensation committee last April praised Moonves' "outstanding leadership" and "stellar reputation" in a company filing with the Securities and Exchange Commission that appeared in the shareholder proxy for Tuesday's meeting. 

"During 2017, Mr. Moonves continued to demonstrate outstanding leadership in driving the Company's execution on key strategic initiatives," according to the filing included in the Nov. 16 proxy statement. 

The filing described more than a dozen achievements running a $13.6 billion business in 2017 that earned Moonves a total compensation package valued at nearly $70 million last year. It cited his "ratings successes across the Company's portfolio of networks" and his "vision" that "solidified the Company's position as a leader in the evolving media landscape, establishing the Company among those best positioned for the digital future."     

"The [board's] Compensation Committee also acknowledged Mr. Moonves' stellar reputation among and successes in communication with members of the investment community, and in management development and human resources," the compensation summary in the proxy continued.

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All that was written before accounts of accusations of sexual misconduct by Moonves were published over the summer. On Tuesday, a rally outside the shareholders meeting in midtown Manhattan demanded the board withhold severance from Moonves. 

"It's as clear as day to women everywhere that we have to stop rewarding sexual abusers with payouts. It's crystal clear in this case," said Sonia Ossorio, president of NOW-New York. "Companies really don't have an option any longer of sweeping these issues under the rug."

NOW-New York was one of several groups outside the meeting, where protesters paraded with signs and gold balloons, chosen for their resemblance to Moonves' potential golden parachute. But indoors, the few shareholder questions focused on CBS's dual-class share structure, opportunities to earn money from legalized sports betting and the length of the network's contract with Judge Judy.