CBS has settled a shareholder lawsuit that claimed chairman emeritus Sumner Redstone received millions in compensation despite the fact his health had deteriorated and he was no longer able to attend to regular company business.
The settlement (read the terms here), reached in mediation, is for $1.25 million, but insurance will cover the cost for the company and individual shareholders won’t see any of the settlement.
The company has consistently denied the compensation for Redstone was inappropriate. A CBS spokesperson declined to comment on why the company’s board of directors opted to settle.
The shareholder, R.A. Feuer, originally filed suit in July 2016 in the Delaware Court of Chancery. He claimed the board’s determination of compensation after May 2014 constituted corporate waste and a breach of fiduciary duty as the decline in Redstone’s health left him in no position to render services of any value to the company.
Redstone was paid $13.5 million in total compensation from 2014-2016, with $9 million of that a bonus in 2014. The court dismissed claims relating to the bonus, with the salary portion of the suit allowed to move forward.
The settlement means the suit was dismissed “in its entirety and with prejudice.”
Redstone, who once loomed as large as any figure in media, controlling both CBS and Viacom through National Amusements, is now 95 and years ago yielded the stage to his daughter, Shari Redstone. National Amusements controls 80% of CBS and Viacom.