Longtime CBS chief executive Les Moonves, facing new claims of sexual misconduct, will step down soon as part of a wide-ranging corporate settlement of a separate fight for control of CBS.
The CBS board of directors is likely to announce the deal by Monday morning, according to two executives with direct knowledge of the matter.
Lawyers were said to be putting the finishing touches on the settlement on Sunday. Internally, it is being called a “global settlement,” meant to resolve months of litigation between Moonves and Shari Redstone, the controlling shareholder of CBS.
Moonves and Redstone were locked in a tug of war even before July 27, when Ronan Farrow first reported on alleged harassment by Moonves.
Farrow published a followup on Sunday. He wrote that “six additional women have accused the television executive of sexual misconduct, as the board of the CBS Corporation weighs the terms of his departure.”
The CBS board had already hired two law firms to do an investigation.
Now that the exit deal has been reached, the veteran broadcasting executive will step down before those investigations are finished, one of the sources said.
Boardroom battle and huge financial stakes
Moonves’ allies will surely cast his exit as a corporate coup — a successful effort by Redstone to gain a tighter grip on CBS.
Her allies will point to her position as controlling shareholder and accuse Moonves of plotting a jailbreak attempt.
It is an extraordinary confluence of events — a boardroom battle royale and a #MeToo case at the C-suite level.
The impending shakeup may position CBS for a sale. And the financial stakes are huge. Moonves stands to earn upward of $100 million on his way out, but CBS is expected to try to “claw back” at least some of that compensation if the investigation finds evidence of misconduct.
Representatives for CBS and Redstone declined to comment on Sunday on talks about Moonves’ future at the company.
In Farrow’s first story, six women, some of whom were named, alleged harassment and other misconduct by Moonves. Some of the claims dated back several decades.
Moonves acknowledged making mistakes in his past but said he never abused his power. Of all the “Me Too” cases in the past year, this one stood out for several reasons, including the fact that Moonves is a powerful CEO of a major publicly-traded corporation.
Members of the CBS board of directors — the same directors who had been backing Moonves in the dispute with Redstone for months — did not suspend Moonves or force him to step down.
Instead, the board retained a pair of law firms to investigate the allegations.
Moonves kept a relatively low profile in August, but remained in charge of the broadcasting behemoth.
It is unclear when he first knew that he had to go.
Some sources close to Moonves said in August that he had vowed to fight both the allegations of wrongdoing and the legal war against Redstone.
But another source said he knew his exit was inevitable several months ago, even before Farrow’s first story came out.
The accusations in the second story are even more serious.
‘Serious allegations,’ denials and ongoing investigations
“These are more numerous claims, these are six women all of them on the record, also describing more serious allegations,” Farrow said on CNN’s “Reliable Sources” shortly after The New Yorker published the followup. “This includes multiple allegations of either physically forced or coerced oral sex. It includes a case that resulted in a criminal investigation.”
Moonves told Farrow in a statement that the “appalling accusations in this article are untrue.”
He said he had consensual relations with three of the women named by The New Yorker “some 25 years ago before I came to CBS.” He reiterated that he never abused his power and said he can only surmise that the allegations “are surfacing now for the first time, decades later, as part of a concerted effort by others to destroy my name, my reputation and my career.”
Farrow had a different explanation.
He said on CNN that “these women are coming out now” because “they have been extraordinarily frustrated by what they perceive to be inaction on the part of CBS and its board. And that really is integral to what prompted this followup story.”
While the law firms have been investigating, Moonves has been “allowed to stay and continue to run the company,” a different outcome than many other “Me Too” cases, Farrow noted.
CBS responded to the new story by saying in a statement, “CBS takes these allegations very seriously. Our board of directors is conducting a thorough investigation of these matters, which is ongoing.”
Farrow indicated that CBS has been aware of the new allegations for at least several days. “In the last week, as we reached out to CBS for comment,” stories emerged about exit talks, Farrow said.
The Los Angeles Times reported on Wednesday night that CBS board members were talking about Moonves’ potential exit. Discussions had focused on the size of a severance package, and on whether Moonves would move to a producer role, the Times reported.
Under the terms of his contract, Moonves would owed almost $180 million if removed without “cause.” But if he is removed “for cause,” relating to the harassment allegations, for example, such an eye-popping severance package would not be in play.
“As of a couple of days ago, they were still talking about potentially letting him leave with a very generous exit package, up to the neighborhood of $100 million,” Farrow said on CNN. “Many of the women found that very, very frustrating. They felt this was a board that has let a powerful man who makes a lot of money for this company, in the words of one person, ‘get away with it.'”