Paramount Global for sale latest - Variety: Paramount Will Allow Its 3 Co-CEOs to Resign and Receive Severance If They Are Demoted

Story from Variety:

With Paramount Global poised to be taken over by Skydance Media in 2025, the three execs running Paramount as co-CEOs — George Cheeks, Chris McCarthy and Brian Robbins — now have an additional provision in their employment agreements that will let them quit and receive severance benefits if they are demoted from their co-CEO roles.

If any of the three are assigned “duties or responsibilities substantially inconsistent” with their position or duties as co-CEOs, or they have “a material reduction in such position or duties,” the executives are entitled to resign for “good reason” and to receive corresponding severance payments, the media company disclosed in an SEC filing Tuesday.

In addition, Cheeks, McCarthy and Robbins were each awarded grants of $3 million worth of restricted share units of Paramount’s Class B common stock under the company’s latest long-term incentive plan as of Oct. 8, 2024. The RSUs will vest ratably over a three-year period beginning on the first anniversary of the grant date, per the filing.

Under the deal that Skydance and its financial partner, RedBird Capital, clinched with controlling shareholder Shari Redstone and Paramount’s board, Skydance will merge with Paramount once the transaction closes (expected in the first half of 2025). David Ellison, Skydance’s CEO, is set to become chief executive of the combined company, and former NBCUniversal CEO Jeff Shell is to become president.

Prior to securing the deal with Skydance, Paramount dismissed former CEO Bob Bakish and formed the three-member Office of the CEO effective as of May 1 comprising: George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon.

Under updated employment agreements for the trio disclosed in June, Cheeks, McCarthy and Robbins were guaranteed severance payments equivalent to two times their annual base salary plus twice their annual target bonus amount, among other benefits, in the event they’re fired in connection with a sale or merger of Paramount Global (or within two years of such a transaction). In addition, the board granted each of the three execs an annual target bonus of $2.75 million, prorated to apply only to the portion of the current fiscal year in which they serve in the Office of the CEO.

Now the three co-CEOs’ target annual cash bonuses — which had previously been set to continue only for so long as they remained members of the Office of the CEO — “will continue to apply for the duration” of their employment with the company, without regard to whether they continue to serve as members of the Office of the CEO. The increased “bonus opportunity” will continue to apply only to the portion of the current fiscal year after which they were appointed co-CEOs and will be the target bonus amount on which any future severance payments will be based, according to the Paramount filing.

Paramount, amid a steady decline in its linear TV business, is slashing 15% of its U.S. headcount, eliminating about 2,000 jobs, in cuts to be substantially completed by the end of 2024. The layoffs represent a big chunk of Paramount’s plan to reduce costs by $500 million annually even before the Skydance merger. Shell has said Skydance is aiming to achieve at least $2 billion in annualized cost synergies at Paramount, a figure that incorporates the co-CEOs’ previously announced $500 million annual cost-cutting target.

Following the close of the Skydance-Paramount deal, Larry Ellison — the Oracle founder who is the father of Skydance CEO David Ellison — will own 77.5% of National Amusements Inc., which is currently owned by the Redstone family.