CBS Revises Sumner Redstone's Compensation
March 13, 2007 at 5:54 AM (PT)
CBS announced a revised compensation package for Executive Chairman SUMNER REDSTONE that is tied more toward shareholder returns and less on cash salary and bonuses. The majority of REDSTONE's total compensation will now be determined directly by performance of CBS CORP.'s stock and returns to its shareholders. The equity-driven agreement with CBS closely mirrors REDSTONE's recently revised employment package with VIACOM, for which he also serves as Executive Chairman.
"We are very pleased to announce this new agreement with MR. REDSTONE," said Chairman/Compensation Committee of the CBS CORPORATION Board of Directors CHARLES GIFFORD. "As Executive Chairman of CBS CORPORATION, he has provided the board with great vision and guidance, and his belief that executive compensation should be tied to the financial performance of the company is to be commended. In just one year, CBS CORPORATION has delivered significant value to its shareholders, evidenced by its stock price and the dividends it has returned to its shareholders."
The pay-for-performance model is one I have long championed...
"The pay-for-performance model is one I have long championed, as it more closely aligns executive compensation with the returns the company generates for its shareholders," said REDSTONE. "I want to thank the Board and the Compensation Committee for making this prudent decision and for the counsel they have provided CBS CORPORATION throughout the past year."
Under the terms of the new agreement, beginning in 2007, REDSTONE's salary will be reduced to $1 million per year (from current $1.75 million), and deferred compensation, presently $1.3 million per year, will be eliminated. His target cash bonus under CBS's short-term incentive plan will be reduced from $6.1 million to $3.5 million per year. REDSTONE will receive an annual award of stock options having a grant-date value of $3 million. He will also receive an annual award of performance share units (PSUs) with a target value of $3 million.