UPDATED with stock movement. Once powerful CEO of CBS Les Moonves will not be getting a single dime of the $120 million in severance he expected after stepping down under allegations of misconduct this fall, the company’s board has decided today.
“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. Mr. Moonves will not receive any severance payment from the Company,” they added.
CBS stock, which during the regular trading day sunk 2.5% to a new one-year low, rallied nearly 1% after hours. Wall Street has generally been supportive of the moves the company has made to turn the page on the Moonves era. But a prolonged legal battle with the former chairman would be another pricey distraction unlikely to ease investor’s minds.
The directors’ decision seemed all but inevitable, given the disclosures from a draft of an internal report obtained by the New York Times, which revealed that Moonves had destroyed evidence and misled investigators in an effort to protect his reputation and payout. In that preliminary report, investigators said they had substantiated numerous accusations of sexual misconduct, and uncovered previously undisclosed allegations of wrongdoing.
Moonves resigned in September after The New Yorker published a follow-on report by Ronan Farrow detailing new allegations by six women spanning the 1980s to the 2000s. These fresh accounts of sexual misconduct include claims that Moonves forced women to perform oral sex on him and that he exposed himself to them without their consent.
The women’s accusations were similar to those made by six other women, who claimed they were subjected Moonves’ to unwelcome sexual advances, and suffered professional retaliation when they rebuffed the once-powerful television executive.
CBS directors said the investigators concluded that harassment and retaliation are not pervasive at the media company. However, investigators did find instances of “improper and unprofessional conduct” that were inconsistent with CBS’ stated policies on creating a harassment-free environment.
The two law firms conducting the investigation, Debevoise & Plimpton and Covington & Burling, also found that the company’s human resources department lacking, noting it “did not hold high performers accountable” for their conduct or protect employees from retaliation.
The newly constituted CBS board and its acting CEO, Joe Ianniello, have already started making changes, including appointing a new chief people officer, Laurie Rosenfield.
Read the full CBS board statement here:
The Board of Directors of CBS has completed its investigation of former Chairman and CEO Leslie Moonves, CBS News, and cultural issues at CBS.
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. Mr. Moonves will not receive any severance payment from the Company.
As a result of their work, the investigators also concluded that harassment and retaliation are not pervasive at CBS. However, the investigators learned of past incidents of improper and unprofessional conduct, and concluded that the Company’s historical policies, practices and structures have not reflected a high institutional priority on preventing harassment and retaliation. The investigation determined that the resources devoted to the Company’s Human Resources function, to training and development, and to diversity and inclusion initiatives have been inadequate, given the size and complexity of CBS’ businesses. Employees also cited past incidents in which HR and the Company did not hold high performers accountable for their conduct and protect employees from retaliation.
The Board, which includes six new members, and the Company’s new management have already begun to take robust steps to improve the working environment for all employees. Among other things, the Company appointed a new Chief People Officer, is actively engaged in ways to enhance and reimagine the Human Resources function, and has retained outside expert advisors to develop other initiatives for promoting a workplace culture of dignity, transparency, respect and inclusion. These efforts will continue to be a high priority for the Board and the Company’s management, and we will continue to work together to communicate with our workforce in that regard.
We would like to thank everyone who cooperated with the investigation and applaud CBS’ employees for remaining focused on their jobs during this very difficult time. We look forward to the people of CBS returning their full attention to the outstanding work that they do every single day.