By Denying Moonves His $120M Severance, CBS Could Tamp down Shareholder Litigation
CBS’ announcement that it would deny Les Moonves $120 million in severance pay tamped down the prospects for shareholder litigation stemming from the company’s handling of sexual harassment allegations against its ousted CEO, but the media giant may not be out of the woods just yet, attorneys said Tuesday.
“CBS has gone about this exactly the way I would advise a client to go about this,” said Barry H. Genkin, a partner at Blank Rome in Philadelphia. “From a governance perspective, the company did what it had to do, and now its following through on that.”
But Genkin noted that Moonves’ employment agreement includes a arbitration provision that could a potential dispute to be adjudicated out of the public view—a move that could benefit both Moonves and the company.
“Typically, when parties explain their views toward dispute resolution and do it in the form of arbitration, that’s usually pretty binding on the parties,” he said.
CBS, Genkin added, likely wants to shift the public narrative away from Moonves and avoid the negative headlines that have vexed the company for the last four months. The company, he said, would also face outside pressure not to reach any kind of financial settlement with Moonves that would allow him to walk with any severance money.
“The company put a line in the sand,” he said. “I guess what it really comes down to is does Moonves basically want to let this die a quiet death, or does he want to continue to be in the headlines of the #MeToo movement?”
"By Denying Moonves His $120M Severance, CBS Could Tamp down Shareholder Litigation," by Tom McParland was published in AmLaw Litigation Daily on December 18, 2018.