CBS stock loses billions in market cap as CEO Moonves accused of sexual harassment

CBS stock loses billions in market cap as CEO Moonves accused of sexual harassment
Michelle Clancy
| 28 July 2018


Shares of CBS tumbled more than 6% after it was revealed that CEO Leslie Moonves is at the centre of an exposé detailing alleged sexual harassment incidents dating back more than two decades.
moonves 28 july 2018
The *piece, which came out in the New Yorker on 27 July, included accusations from six women of “forcible touching and kissing,” accompanied with threats to derail their careers if they didn’t comply. The piece was penned by investigative journalist Ronan Farrow, known for a piece in the New Yorker last October that delved into the Harvey Weinstein scandal.

“He has gotten away with it for decades,” one woman, writer Janet Jones, told Farrow.

In a statement, Moonves defended himself: “Throughout my time at CBS, we have promoted a culture of respect and opportunity for all employees, and have consistently found success elevating women to top executive positions across our company. I recognise that there were times decades ago when I may have made some women uncomfortable by making advances. Those were mistakes, and I regret them immensely. But I always understood and respected—and abided by the principle—that ‘no’ means ‘no,’ and I have never misused my position to harm or hinder anyone’s career. This is a time when we all are appropriately focused on how we help improve our society, and we at CBS are committed to being part of the solution.”

According to CBS, there have been no misconduct claims and no settlements against Moonves during his 24 years at the network.

“All allegations of personal misconduct are to be taken seriously,” CBS said in a statement. “The independent directors of CBS have committed to investigating claims that violate the company’s clear policies in that regard. Upon the conclusion of that investigation, which involves recently reported allegations that go back several decades, the board will promptly review the findings and take appropriate action.”

CBS stock closed down 6.1% Friday, bottoming out at $54.01 per share after losing $1.4 billion in market value.

The news comes as Moonves, CBS’s board and controlling shareholder Shari Redstone remain embroiled in a legal battle concerning a potential merger between Viacom and CBS.

Redstone, daughter of retired Viacom mogul Sumner Redstone, wants CBS and sister media company Viacom to merge – a move that Moonves and the CBS board of directors have had reservations about. Both companies are under the umbrella of Redstone’s National Amusements.

Viacom has made it no secret that it wants Moonves at the helm of a combined company, but the talks between the two have hit an impasse regarding the line of succession.

Moonves wants CBS COO Joseph Ianniello to be president and COO of the merged entity, and to succeed him as CEO when he retires. The Redstone family instead wants Viacom CEO Bob Bakish to be the No 2 and succeed Moonves when the time comes. Sources told Reuters that Redstone has offered to drop demands for Bakish to have a role beyond being on the combined company’s board.

“[CBS CEO] Moonves said that he did not think he could successfully lead the Company under these circumstances,” a lawsuit filed earlier this year said. “He said that the soul of CBS and its success derived from the independence of its Board and management. He concluded that his duty to all stockholders led him to believe the Stock Dividend was necessary.”
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