CBS will take a pounding if it rewards former CEO

As CBS awaits the results of an independent investigation into allegations of sexual harassment against former CEO Les Moonves, the possibility of a $100 million-plus severance package is roiling public debate over the culture of corporate America.

CBS is attempting to temper the growing anger with a pledge of $20 million to “charitable organizations that support the #MeToo movement and equality for women in the workplace.” But the company will suffer the wrath of all fair-minded Americans if it gives Moonves, one of the most powerful figures in the entertainment industry, a parting gift of $120 million.

Indeed, a shareholder lawsuit has been filed against CBS in the aftermath of the latest New Yorker article in which six women accuse Moonves of harassment or assault. A previous article detailed other alleged incidents of predatory behavior.

The former CEO has denied the “appalling accusations” and says they are “untrue.” He did admit to “consensual relations” with three of the women cited in the second article.

But while CBS waits for the results of the investigation, there are calls for Moonves’ imprisonment or, at the very least, economic sanctions.

“As an employee of CBS, I would just like to say that Les Moonves should be fired without getting a [expletive] dollar. The actions described … are those of sexual assault and shame on anyone else in the corporation who knew about his crimes,” Rachel Bloom, actor and star of the comedy-drama series “Crazy Ex-Girlfriend,” wrote on Twitter.

To understand the public’s deep resentment toward corporate America’s willingness to reward misbehavior by top executives, read journalist John Gallagher’s in-depth article published in the Detroit Free Press in June.

Gallagher looks at the severance packages of prominent CEOs who departed under dark clouds of misbehavior or incompetence.

The article opens with the case of Tim Leuliette, a longtime auto industry executive in metro Detroit, who was asked to resign but still demanded $61 million in a separation package.

This after the company disclosed that Leuliette had been caught downloading pronography and information about prostitutes onto his company devices and posting obscene messages and pictures on social media, Gallagher reported.

Visteon, an auto supplier network, sought to deny him the $61 million and the dispute went to arbitration.

Shockingly, an arbitrator awarded Leuliette more than $16 million.

Here’s how the reporter addressed the arbitrator’s award:

“Now, think about that: A CEO is fired by his company, gets caught downloading porn and other objectionable material to his company devices, and he still walks away with $16 million.

“It raises the question: How badly does a CEO have to screw up to walk away with zero?”


Then there’s the case of John Stumpf, who retired from Wells Fargo in the midst of the scandal where company workers created fake accounts using real customers’ data. Stumpf, who was making almost $20 million a year, walked away with more than $130 million, the Detroit Free Press’ article revealed.

The paper also focused on Marissa Mayer, who as CEO of Yahoo! was criticized for failing to turn around the tech company’s declining fortunes. Mayer pocketed about $260 million in severance when she left last year.

The huge gap between what top executives earn and what workers take home is nothing short of scandalous. Even more disconcerting is the fact that many CEOs have not been paragons of virtue or examples of business competence.

Consider this observation from the Free Press’ Gallagher:

“Everyone accepts, more or less, that a boss makes more money than a line worker or an office temp. But should a CEO make several hundred times as much?

“That’s the sort of disparity common in corporate America today. If a CEO makes $20 million a year, hardly uncommon at major companies, an ordinary worker earning the nation’s median household income of about $59,000 would have to work nearly 400 years to collect what the boss makes. It’s unjust, and it’s getting worse.”

We would add that such disparity is bad for the nation’s economy – and psyche.

It’s time that the shareholders, who ultimately are paying the price for such greed at the upper echelons of corporate America, speak up.

As the Detroit Free Press points out, “Shareholders are getting taken for a ride. These compensation and separation packages are nothing more than looting of shareholders’ equity by those at the top.”

CBS should fire Moonves and, thus, avoid paying the $120 million in severance.