By Benjamin Mullin 

The merger of Viacom Inc. and CBS Corp. will be lucrative for the top executives of both companies.

Viacom Chief Executive Bob Bakish, who will become president and CEO of the combined company, ViacomCBS, has signed a new contract ending four years after the deal closes. The contract lists salary, bonuses and other incentives worth about $31 million a year, roughly 55% higher than Mr. Bakish's total compensation in the most recent fiscal year, the company said in a securities filing.

Acting CBS Chief Executive Joe Ianniello, who will be chairman and CEO of CBS at ViacomCBS, will receive a payout of about $70 million when the deal closes. That payment resulted from a provision in his old contract at CBS that entitled him to a lump sum if he wasn't named CEO of the combined company in the event of a merger.

Viacom and CBS last week struck a deal to reunite the empire of media mogul Sumner Redstone, creating a conglomerate with a valuation of $27 billion. The deal will combine Viacom's popular cable channels, including Nickelodeon and Comedy Central, as well as its Paramount movie and TV studio, with the CBS broadcast network and premium cable channel Showtime.

Directors of National Amusements Inc., the holding company that controls CBS and Viacom, voted to approve the merger earlier last week, according to a person familiar with the matter. The board, which includes Shari Redstone and her father, Sumner, voted unanimously in favor of the deal, the person said.

Mr. Bakish's new base salary is $3.1 million, an increase of about 3% from his previous salary of $3 million, according to the filing. He also is eligible for a bonus of $12.4 million, an increase of 77% from his previous target bonus of $7 million, as well as a long-term incentive package worth $16 million, an increase of about 60% over his previous incentive package worth $10 million.

Mr. Bakish will also be given a one-time stock grant of ViacomCBS shares worth $5 million.

A $31 million pay package would make Mr. Bakish the 12th highest-paid CEO in the S&P 500, where median total pay last year was about $12.5 million, according to a Wall Street Journal analysis of 2018 pay data from MyLogIQ LLC, omitting companies that changed CEOs during the year.

It would rank him fifth among CEOs in the media-and-entertainment industry group who have been on the job for at least a year. The two highest-paid media and entertainment CEOs were Discovery Communications Inc.'s CEO David Zaslav and Walt Disney Co.'s Robert Iger, whose total 2018 compensation -- including performance incentives -- was about $129 million and $66 million, respectively.

Mr. Bakish's predecessors at Viacom and CBS have made considerably more than what he is set to earn as chief of the combined company. CBS reported paying Leslie Moonves more than $69 million each year in 2017 and 2016, while Viacom reported paying Philippe Dauman $93 million in 2016, his last year on the job. Both boards' composition was drastically different at the time.

Mr. Bakish has helmed Viacom since late 2016 and has sought to help the company rebound from years of sinking TV ratings and battles with major distributors. He has prioritized maintaining carriage for the company's channels on major cable and satellite providers -- accepting lower fees as a trade-off -- and has pushed to expand reach on digital outlets and streaming services.

Ahead of the deal, Mr. Ianniello signed a contract that keeps his salary and target bonuses flat at $3 million.

Mr. Ianniello is receiving a one-time grant of 450,000 ViacomCBS shares after the deal closes, according to the filing. The employment agreement says that grant is aimed at aligning Mr. Ianniello's interests with those of shareholders and making up for the CBS stock grants that Mr. Ianniello is forgoing by signing a new contract. That contract expires 15 months after the deal closes.

Retaining Mr. Ianiello was a priority, in part, because of his deep knowledge of the company's broadcast operations, its terms with distributors and its digital partnerships, according to people familiar with the matter. Mr. Ianniello's employment agreement said only ViacomCBS directors have the authority to fire him or change his compensation -- details that the Journal reported last week.

Viacom and CBS also named the new directors of ViacomCBS. The new board allots six seats for directors from CBS, four for directors from Viacom, two from National Amusements and one for Mr. Bakish.

The directors from National Amusements are Ms. Redstone, who will be chair of ViacomCBS, and Robert Klieger, a current CBS director and an attorney for Hueston Hennigan LLP. The directors filling the board seats allotted for CBS are Candace Beinecke, Barbara Byrne, Brian Goldner, Susan Schuman, Linda M. Griego and Frederick O. Terrell. The Viacom directors are Nicole Seligman, Ronald Nelson, Judith McHale and Charles E. Phillips, Jr.

Strauss Zelnick, the acting chairman of CBS and chief executive of Take-Two Interactive Software Inc., won't be on the board of ViacomCBS.

The companies on Monday also listed compensation details for CBS Chief Financial Officer Christina Spade, who will be the CFO of ViacomCBS. Ms. Spade will have a base salary of $1.4 million.

--Theo Francis contributed to this article.

Write to Benjamin Mullin at Benjamin.Mullin@wsj.com

 

(END) Dow Jones Newswires

August 19, 2019 17:37 ET (21:37 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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