With a merger and acquisition event looming on the horizon for Paramount Global, the three executives from the conglomerate’s Office of the CEO are now eligible for increased severance packages in the event of a sale or merger – and the company knew them too cash bonuses. for the time they serve as co-CEOs.
The move comes as Paramount’s controlling shareholder Shari Redstone evaluates a merger offer from David Ellison’s Skydance Media that the special committee of Paramount Global’s board has recommended. Meanwhile, this protracted sale has attracted other bidders interested in buying out Redstone’s National Amusements Inc., which owns 77% of the voting stock in Paramount, including Edgar Bronfman Jr.
On Monday, Paramount announced that the three members of the Office of the CEO – George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and chief executive officer of Paramount Pictures and Nickelodeon – have been designated as participants in the company’s Executive Change in Control Severance Protection Plan.
This ensures that Cheeks, McCarthy and Robbins will receive severance payments equal to two times their annual base salary plus twice their annual bonus amount, among other benefits, in the event they are terminated in connection with a sale or merger of Paramount Global (or within two years after such transaction).
In addition, the board awarded each of the three executives an annual target bonus of $2.75 million, prorated to apply only to the portion of the current fiscal year in which they serve in the CEO’s office, Paramount said in filed with the SEC on Monday.
Cheeks, McCarthy and Robbins took control of Paramount Global in the newly created “Office of the CEO” after Redstone fired former CEO Bob Bakish on April 30, reportedly due to Bakish’s clash with Redstone over pursuing the Skydance deal.
The board appointed McCarthy “interim chief executive officer,” effective May 1, “for purposes of the rules and regulations of the SEC.”
At the company’s 2024 shareholder meeting last week, the Troika spoke about their strategic “vision” for the future, outlining the plans as if Paramount were not going to be sold.
At the June 4 meeting, they spoke at a high level about how they plan to cut more than half a billion in costs annually through layoffs and other cost-cutting measures, pursue a joint venture to increase streaming scale for Paramount+ and possibly sell some assets. to strengthen the balance. “To be clear, $500 million in cost savings is just the beginning,” Cheeks said, adding that they expect to provide more details on the Q2 2024 earnings call in August.
The trio had scheduled a town hall for June 5 to answer employee questions about the future of Paramount Global, but citing “ongoing speculation about possible mergers and acquisitions” they rescheduled it for June 25.
