Featured: Leslie Moonves, CEO, CBS
Originally published: April 27, 2012
To maintain high ratings and keep the ad dollars rolling in, CBS showcases populist programming aimed at the average Joe -- from " Wheel of Fortune " to " Entertainment Tonight " and " Judge Judy ."
But when it comes to paychecks for the top brass, CBS ( CBS ) lives up to its nickname, "the Tiffany Network."
We recently learned that CBS CEO Leslie Moonves got a cool $69.9 million in pay last year.
That’s one of the highest top-executive paychecks we've seen so far, and it’s a 21% increase from the previous year.
It is stunningly higher that what just about everyone else makes:
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It's five times the average CEO pay among Standard & Poor’s 500 Index ( $INX ) companies in 2011.
- It's more than 1,400 times the 2010 U.S. median household income of $49,445. On average, CEO pay in this country comes in at about 380 times pay for regular workers.
- And it's 1,176 times the median cash compensation of $59,400 for CBS employees, according to payscale.com , an online compensation data provider. In fact, assuming a 60-hour week and two weeks of vacation, Moonves made more in less than three hours of work last year than his typical employee earned for the whole year.
So for a pay package that keeps the Tiffany in his network, I'm making Moonves my latest One-Percenter of the Week.
Moonves' pay included $3.5 million in salary, a $20 million cash bonus and an additional $7.5 million bonus for his leadership "in connection with the creation of premium content across the company's portfolio of businesses," says the company. He also got $8.5 million in stock awards and $27.3 million in stock options, which was almost twice what he got the year before. The rest, around $3 million, was for his pension and "other pay."
No doubt, he holds a high-pressure job. But it's fair to wonder whether that justifies a level of pay that is so out of line with his viewers, his workers and even other CEOs. (For a look at how other CEOs' paychecks compare with their workers' pay, read " 7 CEOs pulling in outsized paychecks .")
CBS responds that the "vast majority" of 2011 executive pay was "keyed to performance-based measures, closely aligning the overall value of the compensation with that of the company's shareholders." And CBS did perform. The stock was up 42% last year, points out CBS spokeswoman Dana McClintock.
That was coming out of a deep hole during the recession, however. The stock is trading today at around $34; a decade ago, adjusted for splits, it was trading at $35.
The recent record is strong. CBS operating income increased 39% last year to $2.53 billion, which helped drive diluted earnings per share up 85% to $1.92. For the second year in a row, the network ranked No. 1 in the key demographic of 18- to 49-year last year. It also had 14 of the top 20 regularly scheduled programs -- the most of any network in 24 years. By paying down debt, the company secured the highest credit ratings in its history. And it returned more than $1.2 billion to shareholders in buybacks and dividends. Besides, CBS runs four of my favorite shows: " Late Show with David Letterman ," " CSI: Crime Scene Investigation ," " 60 Minutes ," and " Face the Nation ."
"We believe the CBS management team has done an outstanding job of investing in valuable content franchises, monetizing its programs, and returning capital to shareholders," said Morningstar analyst Michael Corty.
Does that make Moonves worth $69.9 million? After all, that's more than 2,000 times what the average U.S. worker makes, says Vineeta Anand, an analyst with the AFL-CIO Office of Investment. "He's a high roller. Seventy million dollars is a lot of money," she says.
Here's the kicker. Despite making so much money, Moonves got CBS shareholders to pay $557,600 for his personal use of the corporate jet. He could just buy a jet, of course. And then there's the $500,000 shareholders paid to build "a dedicated work area at his home for the purpose of screening and evaluating television and film programming."
In other words, even though they paid Moonves so well, shareholders had to fork out half a million dollars to install his home theater.
That's a pretty good spin of the Wheel of Fortune.
