In a significant move to bolster executive retention during a tumultuous period, Paramount Global's board of directors has approved substantial stock grants and enhanced compensation packages for its co-CEOs: Chris McCarthy, George Cheeks, and Brian Robbins. Each executive will receive restricted stock valued at $3 million, a decision that reflects the company's ongoing transformation and the complexities surrounding its impending sale.

 

Background of Leadership Changes

The leadership shakeup at Paramount began in April when Bob Bakish was ousted amid efforts to sell the company. Following this transition, Cheeks, McCarthy, and Robbins were appointed to the Office of the CEO. Cheeks oversees CBS, McCarthy is in charge of Showtime/MTV Entertainment Studios and Paramount Media Networks, while Robbins leads Paramount Pictures and Nickelodeon. This restructuring comes as Paramount seeks to solidify its position in an evolving media landscape, highlighted by a recent agreement with Skydance that is expected to finalize in 2025.

 

Enhanced Compensation Packages

To reflect their new roles and responsibilities, the co-CEOs' compensation was significantly increased in June. Notably, their target annual cash bonuses were raised by an additional 100% of their base salaries under the company's short-term incentive plan. This adjustment aims to incentivize performance and ensure alignment with corporate goals during this critical phase.

In a recent filing with the Securities and Exchange Commission (SEC), Paramount outlined that these executives would be entitled to resign "for good reason," allowing them to collect severance payouts if their roles were materially altered. This provision is a common feature in CEO contracts but underscores the board's commitment to protecting its leadership team during uncertain times.

 

Long-Term Security Measures

The newly enhanced compensation will not only apply while the executives serve in their current roles but will also extend throughout their employment with Paramount, regardless of any future changes in title or responsibilities. This approach is relatively uncommon and indicates a strategic effort by the board to retain top talent amidst ongoing corporate challenges.

The recent SEC filing further detailed that Cheeks, McCarthy, and Robbins would qualify for severance payments amounting to twice their base pay should a change in ownership occur—a scenario that appears increasingly likely given the company's sale discussions. Additionally, they will continue receiving benefits for 24 months post-departure if they exit under these conditions.

 

Context of Corporate Challenges

These compensation adjustments come at a time when Paramount is navigating significant challenges, including recent layoffs affecting hundreds of employees as part of its restructuring efforts. The company is also dealing with public disputes involving Shari Redstone, the controlling shareholder, and CBS News. These factors contribute to an environment where executive stability is paramount for maintaining investor confidence and operational continuity.

The June filing also indicated that while serving in the Office of the CEO, each executive would be eligible for an annual cash bonus of $2.75 million. This substantial financial incentive reflects both the high stakes involved in leading Paramount through its current challenges and the board's commitment to ensuring that its top executives remain focused on driving the company forward.

Paramount Global's decision to enhance compensation for its co-CEOs is a strategic maneuver aimed at retaining key leadership during a pivotal transition period. As the company prepares for potential ownership changes and continues to streamline operations amid industry-wide shifts, these measures are designed to secure executive commitment and stabilize corporate governance. With significant stock grants and robust severance provisions now in place, Paramount appears poised to navigate its complex landscape while ensuring that its leadership remains aligned with long-term objectives.