There will be no courtroom battle between CBS Corporation and its former President/CEO with respect to his separation agreement with the media company.
Rather, binding arbitration is the choice of Les Moonves.
In an 8-K filing made Thursday (1/17) with the Commission, CBS revealed that Moonves on Wednesday notified the company of his election to demand binding arbitration with respect to his departure from the company.
As such, an arbitrator — not a judge — will be called on to decide an out-of-court settlement that will be binding between both parties and free of any appeal.
Binding arbitration can be quicker, and less costlier, than filing a lawsuit. It can also keep Moonves’ past exploits, which led to CBS’s decision to part ways with Moonves, from resurfacing in the headlines.
It’s been quite a year for Moonves. In late May, he was stewarding a potential forced merger with Viacom under the direction of Shari Redstone and National Amusements Inc., which owns a controlling interest in both Viacom and CBS. Under Moonves, CBS’s Board of Directors moved to dilute NAI’s voting interest in CBS, thus preventing any move to combine it with Viacom. Redstone and NAI denied any effort to do so.
Eight weeks later, The New Yorker published an article that included, in detail, sexual misconduct allegations against the CBS CEO. The company’s shares immediately fell.
On September 9, CBS’s Board of Directors entered a new era by finalizing a settlement agreement with NAI. The agreement ended pending litigation in a Delaware Chancery Court spurred by the efforts of CBS to dilute the voting power of NAI. As such, CBS’s full board rescinded the Class A share dividend designed to weaken the Redstone family’s control of CBS.
This was overshadowed by the news of Moonves’ agreement to relinquish his duties and $20 million in donations from Moonves’ severance benefits to organizations that support the #MeToo movement and equality for women in the workplace, pending the CBS Board’s independent investigation of sexual misconduct led by Covington & Burling and Debevoise & Plimpton.
On the afternoon of Dec. 17, 2018, the Board of Directors completed its investigation of Moonves, and of CBS News and “cultural issues” at CBS. As a result of their work, the investigators concluded that harassment and retaliation are not pervasive at CBS.
It put a full spotlight on Moonves’ transgressions.
“With regard to Mr. Moonves, 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,” CBS said.
As such, Moonves will not receive any severance payment from CBS. The Time’s Up anti-sexual harassment group and 17 other organizations will split the $20 million donation connected to Moonves’ departure over sexual misconduct claims. Also surfacing: a settlement regarding a sexual misconduct claim from actress Eliza Dushku.
According to CNBC, Moonves’ exit package was to consist of $100 million in CBS common stock, plus the $20 million handed over to the 18 nonprofit groups.
Now, Moonves, CBS and an arbitrator will determine how much he can get from his former employer.
Any further news will likely not surface until arbitration is complete. “The company does not intend to comment further on this matter during the pendency of the arbitration proceedings,” CBS’s 8-K filing states.
With less than 15 minutes remaining in Thursday’s trading session on Wall Street, CBS shares were up 2%, to $48.83.
