CBS Drops Les Moonves, National Amusements Drops Legal Battle

More than a year in, the #MeToo movement continues to prove that no corporate leader is too big to be toppled.

What Happened

CBS Corporation CBS announced Sunday that CEO Les Moonves would immediately resign following new allegations of sexual assault.

The New Yorker’s Ronan Farrow, the journalist who helped catalyze the downfall of disgraced leaders across industries with his exposé of Harvey Weinstein, first reported misconduct accusations against Moonves in July. A Sunday follow-up added six allegations to the initial six.

In connection with Moonves’ departure, CBS settled to dismiss pending litigation with parent National Amusements over the firm’s continued autonomy; to replace five independent directors and one NAI-affiliated director with six new board members; to rescind a Class A share dividend; and to donate $20 million — deducted from Moonves’ severance benefits — to organizations supporting the #MeToo movement.

Why It’s Important

For CBS, the Moonves scandal, although immediately disruptive to the firm’s leadership, may bring longer-term stability to the greater organization. National Amusements has agreed to abandon board-opposed merger plans between CBS and Viacom, Inc. VIA.

“Today’s resolution will benefit all shareholders, allowing us to focus on the business of running CBS — and transforming it for the future,” Vice Chair Shari Redstone said in a press release.

For the private sector, Moonves’ departure demonstrates the continued force of the #MeToo movement.

What’s Next

CBS President and COO Joe Ianniello has been named interim CEO as the board explores permanent replacements. Fox sources said last week that Ianniello is not likely in consideration.

The CBS board said it also continues to support an independent investigation into claims of Moonves’ misconduct and will not pay him severance benefits until the investigation’s close. An 8-K filing will provide additional detail about the settlement.

The board will host an annual shareholder meeting no later than Nov. 30.

Related Links:

Howard Stern Piles Onto Les Moonves With Sketch Of Poor Character

Analysts: Moonves Trouble Creates Overhang For CBS Stock, Renders Viacom Merger 'More Inevitable'

Photo by David Shankbone/Wikimedia.