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Global Edition | Today Is Friday, March 19, 2010 |
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Global Edition | Today Is Friday, March 19, 2010 |
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| How Did Broadcast News Turn Corrupt? | « Scan Content In The Order It Was Published » | The End Of News As A Television Show | |
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New York – In the last two years, CBS shares have moved from $26 to $28 — hardly evidence of superstar management. The CBS board may have noticed the tepid performance, for last week they awarded Leslie Moonves’ a contract renewal that focuses heavily on stock price appreciation.
The terms of Moonves Compensation Agreement were reported by The New York Times.
According to the Times story, Brian Foley, an independent compensation expert, is quoted as saying,
”Most Fortune 500 chief executives make $1 million to $1.5 million in base salary, so this is still a very high salary,” he noted. He also said that the stock option grant itself ”was enough to feed an army” and that it vested quickly.
”If the option is priced at current market prices, then every time the stock goes up by a dollar, the value of his grant goes up $5 million,” he said. ”For a grant this size, you would expect either that the vesting occurs over a considerably longer period or is back loaded. Otherwise, the company is spending a lot to keep him for four years.”
CBS CEO, Leslie Moonves
Unlike a typical Fortune 500 company, CBS has a broadcasters’ responsibility to the communities it serves. CBS, along with two other networks, operates a so-called news division whose budget, manpower, capabilities and reportorial quality has been deteriorating for many years.
The issue isn’t what CBS is willing to pay its Chief Executive Officer — that’s a private matter. Still, given the cut backs in news budgets since CBS went public again, it’s worth noting that Les Moonves compensation last year was nearly $25 million.
News divisions are no longer viewed as impelled by an obligation to the public interest but as profit centers in a corporation.
The contract renewal suggests that $25 million wasn’t sufficient to motivate Mr. Moonves to sequentially and systematically improve CBS earnings.
