Logo

CBS Ties Redstone Pay to Company’s Performance

Mar 13, 2007  •  Post A Comment

CBS Corp. has put executive chairman Sumner Redstone on a new pay plan under which the company’s stock price is both carrot and stick.

Starting this year, his CBS Corp. salary is cut by more than half, his target cash bonus is cut by almost half, his deferred compensation is eliminated and he will get annual awards of CBS stock options worth $3 million and performance share units worth $3 million.

Bottom line, Mr. Redstone will have to get by on $1 million salary (down from $1.75 million), $3.5 million cash bonus (down from $6.1 million), zero deferred compensation (instead of $1.3 million) and whatever he can earn based on the financial performance of CBS.

The package, announced Tuesday, is similar to the pay package announced recently by Viacom for Mr. Redstone.

“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,” Mr. Redstone said. “I want to thank the board and the compensation committee for making this prudent decision, and for the counsel they have provided CBS Corp. throughout the past year.”

“We are very pleased to announce this new agreement with Mr. Redstone,” said Charles Gifford, chairman of the compensation committee of the CBS Corp. board of directors. “As executive chairman of CBS Corp., 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 Corp. has delivered significant value to its shareholders, evidenced by its stock price and the dividends it has returned to its shareholders.”

(Editor: Horowitz)