Leslie Moonves, the powerful longtime chairman and chief executive of CBS, will resign his position in the wake of sexual assault allegations, concluding a whirlwind six weeks in which he fell from a perch as one of the country's most respected media titans.
The company announced the news in a statement late Sunday, saying that CBS chief operating officer Joseph Ianniello will take over as interim chief executive and president – both Moonves' titles – as the company looks for a permanent replacement.
Moonves had seemed bulletproof as of just six weeks ago, regarded as one of the entertainment world's most sterling executives. But sexual misconduct allegations by six women in the New Yorker in July led to the board hiring outside lawyers to investigate Moonves and to activists calling for his removal. On the magazine's website Sunday, an additional six women alleged behavior that includes sexual misconduct, harassment and retaliation.
Moonves is still expected to collect millions of dollars as part of a settlement with the board, although the company said it will withhold any decision about payment until the investigation is complete. The executive is one of the highest compensated in media, making $69 million last year, according to regulatory filings.
According to a statement from the company, Moonves and CBS will also “donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace. The donation, which will be made immediately, has been deducted from any severance benefits that may be due Moonves following the Board's ongoing independent investigation. “
As part of the deal, CBS and Shari Redstone's controlling shareholder National Amusements will end its lawsuit as Redstone agrees not to merge the broadcaster with Viacom for at least two years. That move gives Moonves a victory in that arena; he sought to keep CBS operating as a separate concern.
“CBS is an organization of talented and dedicated people who have created one of the most successful media companies in the world,” Redstone said. “Today's resolution will benefit all shareholders, allowing us to focus on the business of running CBS – and transforming it for the future.” Moonves did not comment in the statement.
The company also will replace about half the board, naming three women – Candace Beinecke, Barbara Byrne and Susan Schuman – in addition to well-known media figures such as Richard Parsons and Strauss Zelnick to director positions.
The allegations posted by the New Yorker on Sunday include forced oral sex, Moonves exposing himself without consent and the use of physical violence and intimidation to silence the women. The women in Sunday's report echoed descriptions of a culture of playing down accusations and promoting men even after the company settled allegations against them.
A CBS spokesman on Sunday sent the Post a statement in response to the New Yorker story: “CBS takes these allegations very seriously. Our Board of Directors is conducting a thorough investigation of these matters, which is ongoing.”
In a statement to the New Yorker for its August story, Moonves said that CBS “promoted a culture of respect and opportunity for all employees” during his tenure.
Entertainment President Kelly Kahl told reporters last month that the environment is safe for women. “We're not saying we're perfect. No large company is,” he said. But I'm confident the culture of the entertainment division is very safe, very collaborative and very welcoming. “
Although expected in recent weeks, Moonves' exit is a remarkable turn in the professional fortunes of one of the nation's most powerful executives. Moonves has been with CBS since 1995 and has held the title of chief executive for the past 15 years. In early 2006, CBS became a separate entity as it split from Viacom, and has since been one of the most profitable in entertainment.
Moonves' branch of the Redstone empire, with CBS as its bedrock and Showtime as its prestige jewel, was often seen as more stable compared to Viacom, which relied on fickle basic-cable fees and advertising dollars along with the vagaries of the theatrical box office.
Whether that success would continue under Ianniello, a low-profile figure, remains to be seen. Some Wall Street insiders were skeptical that CBS would be able to continue as an independent company, even with the two-year promise.
“CBS's days as an independent public company are numbered,” said Lloyd Greif, a Los Angeles-based investment banker who closely follows the company.
“Without its long-standing leader, CBS is doomed,” he said, noting that “who else is strong enough, either in management or on the board, or has sufficient institutional backing to stand up to Shari? It is only a matter of time before CBS is reunited with Viacom, particularly since National Amusements is in a position to block any other acquirer.”