Leslie Moonves is one of the few people Sumner Redstone has working for him that he holds in high esteem. That was confirmed again, as Redstone ratified a new contract for Moonves which extends through 2011.
As far as his base salary goes, Moonves will receive $3.5 million yearly. That's $2.1 million less than he was paid in 2006, when he received a hefty $5.6 million. Of CEOs of companies with market caps over $3 billion, he was by far the No. 1 paid executive, of the 542 CEOs making that grade.
To show how much he was making, even with the decreased salary, he still comes in at No. 1, at least until new pay statistics are released.
Included with his pay, Moonves will also get a guaranteed bonus of $10.5 million, irrelevant to how CBS (CBS-A) performs. He will also get an option which will cover 5 million shares, of which the value can only be determined at the time they're exercised.
If Moonves is able to reach budgeted free-cash flow goals, he will also be awarded free shares worth $7.6 million on four different grant dates for the duration of his contract. Moonves is even allowed to determine what the goals are to be.
Per the agreement, Moonves will also be taxed at California rates, rather than the outrageous rates of New York state and City. Shareholders will pay that bill, no matter how much time Moonves spend in California or New York.
While it doesn't bother me for company CEOs to get large incentive packages, I do think it needs to be weighted more toward performance than entitlement. When looking at the performance of CBS since Moonves began his tenure at the company, it doesn't seem to justify the overall package.
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