CBS Corp.'s board denied a $120 million severance payment to former Chief Executive Officer Les Moonves, capping the dramatic descent of a longtime Hollywood mogul felled by accusations of sexual harassment and assault.
In deciding to refuse Moonves's pay, CBS said he flouted company policies and failed to comply with an internal investigation. The move followed a more-than-four-month investigation that also delved into the corporate culture at the broadcast network.
"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," the New York-based company said in a statement Monday.
The ex-CEO agreed to step down in September in the wake of a dozen complaints of sexual harassment. His severance was contingent on the outcome of an investigation by two law firms hired by the company.
According to a draft of their findings leaked to the New York Times earlier this month, the lawyers said that CBS would be justified in denying Moonves his pay. The probe also found that the ex-CEO destroyed evidence and lied to investigators in an effort to limit fallout from the scandal, the Times said.
In response to the decision on Monday, Moonves lawyer Andrew Levander described the board's conclusions as preordained and without merit.
"Consistent with the pattern of leaks that have permeated this 'process,' the press was informed of these baseless conclusions before Mr. Moonves, further damaging his name, reputation, career and legacy," Levander said. "Mr. Moonves vehemently denies any non-consensual sexual relations and cooperated extensively and fully with investigators."
UltraViolet, a women's advocacy group, applauded the board's move, calling it a victory for survivors of sexual assault.
"The tides are turning," Shaunna Thomas, UltraViolet's executive director, said in an emailed statement. "The new norm is that if you abuse women, you will lose your job and your golden parachute."
Against the backdrop of the #MeToo movement, CBS had plenty of support to deny the severance, said Lee Bantle, a New York attorney specializing in sexual-harassment cases.
"It's so easy for them to say no and PR-wise it just make so much sense," Bantle said.
Moonves's downfall was triggered by allegations in the New Yorker magazine, which reported that he sexually harassed a dozen women and tried to harm their careers. He also was waging a separate fight with majority shareholder National Amusements over a plan to dilute the investor's stake. That clash was resolved when Moonves agreed to step down in September.
"Untrue allegations from decades ago are now being made against me that are not consistent with who I am," Moonves, 69, said at the time. "I am deeply saddened to be leaving the company."
CBS also said on Monday that while harassment and retaliation weren't pervasive at the company, previous policies didn't put a priority on preventing such actions. The company has hired a new human-resources chief and is now working with outside consultants to improve its workplace culture.
As far back as 2007, Moonves's contract stated that CBS could fire him for cause if he violated company policies on sexual harassment or failed to fully cooperate with an internal investigation. Under the terms of his settlement agreement in September, Moonves could seek to reverse the severance decision through arbitration.
The end of the Moonves imbroglio should let the board focus on matters that are critical to the company's future, such as finding a replacement CEO or pursuing a merger.
The Redstone family, which controls 80 percent of the voting stock of both CBS and Viacom, pursued a merger of the two companies earlier this year. CBS owns the most-watched broadcast network last season, while Viacom is home to Paramount Pictures and a host of cable-TV networks. Uniting them could give the combined companies more clout in negotiating with pay-TV distributors.
In conjunction with Moonves's departure, the Redstones agreed to not propose another merger for at least two years. The boards of both companies could still suggest a deal independently, however.
The CBS board has hired an executive recruiting firm to consider CEO candidates. Joe Ianniello, the company's former chief operating officer, is in the job on an interim basis and is considered a candidate for the job permanently.
Strauss Zelnick, the CEO of video-game maker Take-Two Interactive Software, is serving as interim chairman. He's said he's not interested in the CEO job, but he has not said if he would stay as chairman of CBS on a permanent basis.
Moonves's attorney now has 30 days to file for arbitration to reverse the board's decision, according to his September agreement.
"I would say, 'Good luck,"' Bantle said.
-- Bloomberg News