CBS has been in the news lately. The all-male corporate executive team is now trying to find sort out ways to “donate $20 million to women’s groups following the Sunday resignation of CEO Leslie Moonves after sexual-harassment allegations by several women.” (Chronicle of Philanthropy; maybe this is better in their view than hiring a woman to join their team?)
“Les Moonves, one of the highest-paid CEOs in the US, leaves CBS with a net worth of $700 million” (Business Insider) is something that seems more interesting for shareholders. The company’s market cap is $21 billion. Thus roughly 3 percent of the total enterprise value has been extracted by this one employee (he also made some money before joining CBS). Was he working 24/7 at this job? From a 2005 NY Times article: “Moonves, although a lifelong Democrat and a friend of Bill Clinton’s, is something of a throwback. In his shows, he likes the men alpha and handsome and the women smart and beautiful, and he wants little personal complexity: happy endings are imperative.”
How does it benefit shareholders to have an employee who is so rich that he is hanging out with former Presidents? And did CBS need to pay someone $50+ million every year to tell them that the American public likes a happy ending?
- Harry Potter and the $100 million/year manager (from 2003: “Yesterday’s posting raises the question “if an executive can’t do a good job for $2 million/year, will he do a good job when paid $20 million/year?” The moribund U.S. economy seems to suggest that paying out huge sums to managers is not effective. … think about how focussed on work you’d be if someone handed you a $75 million check tomorrow. You’d probably move into a bigger apartment and redecorate. And wouldn’t it be nice to have a few vacation houses? You know that you’ll be traveling by private jet from now on, but to which of the 50 fractional jet ownership plans should you subscribe? You’re going to get invited to a lot of fun charity events so you’ll need a new wardrobe. In short, living like a rich person is very time-consuming.”)
- Gawker on the lawsuit filed by Moonves’s first wife (2004; being a defendant under California family law was a further distraction from the job; the litigation lasted for two years prior to what was expected to be “a lengthy trial”; every extra dollar paid by CBS to Moonves would have prolonged the litigation (when more is at stake, people fight more intensively))
- The Journal of Popular Studies on how the current wife supports and defends the man (July 2018)
[Buried in the middle bullet is something interesting. The journalist for “legalzoom” says that “But appearing in court wasn’t Moonves’ only speedy option. He could have rushed the process earlier by divorcing outside of California. While most states have residency requirements or long cooling-off periods, a few states offer a quick out. Nevada isn’t just the home of the drive-through wedding chapel. It’s also the best state for a quickie divorce.” The lawsuit was filed by his wife in California under California law. At that point, Moonves had no choice but to defend the suit (under the “no-fault” system, the wife was guaranteed to win a divorce, but there was an open question of how profitable it would be). The “no-fault” system is referred to by researchers as unilateral. Yet the American media portrays the defendant as having a world of options (which would be the case only under a bilateral system) and/or the decision to engage in a divorce lawsuit as an entirely voluntary process, agreed upon by both spouses.]
Readers: What organization should get the $20 million? There are roughly 75 million women in the U.S. labor force (U.S. Department of Labor, Women’s Bureau). Should each of these women get 27 cents (minus admin costs) for what they’ve suffered at the hands (etc.) of guys such as Moonves?