As a seasoned film enthusiast with a keen eye for industry dynamics and a soft spot for behind-the-scenes drama, I find myself intrigued by the recent developments at Paramount Global. The three-headed co-CEO arrangement between George Cheeks, Chris McCarthy, and Brian Robbins seems like an unusual yet fascinating move in the corporate world.
In light of Skydance Media’s planned takeover of Paramount Global in 2025, the three executives currently serving as co-CEOs – George Cheeks, Chris McCarthy, and Brian Robbins – have been given an extra clause in their employment contracts. This clause allows them to resign with severance pay if they are ever demoted from their positions as co-CEOs.
If one of the three co-CEOs is given tasks conflicting with their roles as CEOs, or there’s a significant decrease in their responsibilities, they have the right to resign for just cause and receive appropriate severance pay, according to a disclosure made by the media company in an SEC filing on Tuesday.
I’m thrilled to share that as of October 8, 2024, Cheeks, McCarthy, and Robbins were each bestowed with $3 million in restricted share units (RSUs) of Paramount’s Class B common stock, under the company’s latest long-term incentive plan. These RSUs will gradually become mine over a three-year period, starting on the first anniversary of the grant date, as stated in the filing.
Through an agreement between Skydance, its financial partner RedBird Capital, Shari Redstone (the controlling shareholder), and Paramount’s board, Skydance will unite with Paramount following the completion of the transaction in the first half of 2025. David Ellison, currently CEO of Skydance, is poised to assume the role of CEO for the merged company, while Jeff Shell, who was formerly CEO of NBCUniversal, is set to become its president.
Before finalizing the partnership with Skydance, Paramount parted ways with their former CEO, Bob Bakish, and instituted a triumvirate leadership structure known as the Office of the CEO, effective from May 1. This team consists of George Cheeks, who currently heads CBS as president and CEO; Chris McCarthy, serving as president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, presiding over both Paramount Pictures and Nickelodeon as their respective CEO. In layman’s terms, I’m a movie critic who just reported that Paramount replaced its CEO with a three-person team to run different aspects of the company following their deal with Skydance.
Newly revealed employment contracts unveiled in June ensure that Cheeks, McCarthy, and Robbins receive severance packages equivalent to twice their annual base salary and double their yearly target bonus amount, along with other perks, if terminated due to a Paramount Global sale or merger, or within two years following such a transaction. Furthermore, the board has given each of these top executives an annual target bonus of $2.75 million, adjustable to be applicable only for the duration of the current fiscal year they hold positions in the Office of the CEO.
From now on, the annual cash bonuses for the three co-CEOs, which used to be contingent on their continued membership in the Office of the CEO, will now persist throughout their entire tenure with the company. This bonus opportunity will only be applicable from the point they were appointed as co-CEOs in the current fiscal year, and it will serve as the basis for any future severance payments, as outlined in the Paramount filing.
Skydance, along with Bain & Co., aims to realize a minimum of $2 billion per year in combined cost savings from Paramount. It’s important to note that this figure includes the $500 million in annual cost reductions previously outlined by the co-CEOs.
As a follower, I’ll share how it unfolds after the Skydance-Paramount deal: Larry Ellison, the founder of Oracle and father of Skydance CEO David Ellison, stands to own an impressive 77.5% stake in National Amusements Inc., a company that is currently under the ownership of the Redstone family.
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2024-10-16 00:16