Paramount Office of the CEO Gets Severance Protection as Shari Redstone Weighs Options

Execs Chris McCarthy, Brian Robbins and George Cheeks are eligible for enhanced benefits and cash bonuses in the event the media conglomerate is sold

Paramount office of the CEO; George Cheeks, Chris McCarthy and Brian Robbins, with Shari Redstone
Paramount Office of the CEO: George Cheeks, Chris McCarthy and Brian Robbins, with Non-Executive Chairwoman Shari Redstone (Chris Smith/TheWrap)

As the uncertainty around Paramount Global’s future continues, the three top executives from the media conglomerate’s newly appointed Office of the CEO have been given some new financial protection in the event of new ownership.

In a new 8-K filed with the SEC on Monday, the company revealed that Chris McCarthy, Brian Robbins and George Cheeks have all been added to its Executive Change in Control Severance Protection Plan.

Under the plan, the trio will receive a severance multiple of two and a benefit continuation period of 24 months. They have also been awarded a target annual cash bonus of $2.75 million under Paramount’s short-term incentive plan, which will be prorated and apply only to the portion of the current fiscal year in which they serve in the Office of the CEO. The actual bonus payout will be determined based on each executive’s stats per the company’s pre-established performance goals.

McCarthy, who serves as Showtime/MTV Entertainment Studios and Paramount
Media Networks president and CEO, was previously designated as interim principal executive officer on May 1 for purposes of the rules and regulations of the SEC.

The trio, who were appointed in April following the resignation of former CEO Bob Bakish, recently unveiled their long-term strategic plan to reduce Paramount’s $14.6 billion in longterm debt, return to investment grade metrics after a credit downgrade to junk status and drive revenue and earnings growth.

That plan includes partnerships in streaming, $500 million in cost cuts and divesting assets.

“Our plan looks forward by building back the best of Paramount, delivering higher revenue with lower costs, which translates to higher earnings and better returns,” Robbins said at the company’s annual meeting. “We will be thoughtful in how we deploy capital, with our world-class content always being the first priority. That’s the way we can maximize shareholder value and return Paramount to delivering consistent earnings growth.”

While controlling shareholder Shari Redstone admitted that the Office of the CEO is “not a traditional management structure,” she emphasized that the board believed it would enable the trio to “move quickly to implement best practices throughout the company and to drive improved performance.”

Redstone is currently weighing whether to accept a takeover offer from David Ellison’s Skydance Media, which has been approved by Paramount’s independent special committee evaluating bids.

The Skydance deal, which is backed by a consortium of investors including RedBird Capital and KKR, has been revised multiple times in an effort to make it more equitable for the company’s class B shareholders, who have argued that Redstone would be prioritized at the expense of the rest of the company’s shareholders and have threatened to sue.

Redstone’s other possible suitors include Sony Pictures Entertainment and Apollo Global Management, who submitted a joint $26 billion all-cash offer for the company; “Baby Geniuses” producer Steven Paul, who has lined up financing for National Amusements and is backed by a group of investors including John Paul DeJoria, the billionaire cofounder of Patrón tequila and Paul Mitchell hair care products; or Edgar Bronfman Jr., who is reportedly eyeing a bid for National Amusements with backing from Bain Capital.

Redstone also has the option of allowing the Office of the CEO to continue to go it alone under the strategy laid out at Paramount’s annual meeting.

In addition to their presentation to shareholders and the board, the Office of the CEO planned to speak to employees at a town hall that was previously scheduled for June 5, but decided to postpone it to June 25 given “the ongoing speculation regarding potential M&A.”

“We want to be able to speak to you with as much candor and transparency as possible,” Robbins, Cheeks and McCarthy wrote in a memo to employees. “By moving the date, our hope is to do just that.”

The Office of the CEO also said it would provide more updates on its strategic longterm plan during Paramount’s second quarter earnings call in August.

Paramount, which reported a market capitalization of $8.37 billion as of Monday’s close, has seen its shares fall 26% in the past six months, 16% year to date and 27% in the past year.

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