Moonves’ pay adjusted at CBS

CBS Corp. on Tuesday said it had revised its employment agreement with Chief Executive Leslie Moonves to trim his base compensation but give him a larger equity stake in the broadcasting company.

Moonves’ base salary is now $3.5 million a year, compared with his previous $5.9 million annually. He will be eligible for bonuses and “significant equity-based compensation” tied to the performance of CBS’ stock, the company said.

The pact extends Moonves’ management of CBS through September 2011. His previous contract would have expired in June 2009. CBS declined to say why it made the changes now.

However, in recent years, CBS and sister company Viacom Inc., along with their billionaire chairman, Sumner Redstone, have faced sharp criticism from shareholders that the company’s top executives and directors were overpaid.

In addition, Shari Redstone, the daughter of the 84-year-old media mogul, who serves on both the Viacom and CBS boards, has campaigned to reduce compensation packages. It’s an issue that has contributed to a strain in relations with her father, according to people familiar with the matter.

“I have always been an advocate of equity- and performance-based compensation and I am pleased that CBS is moving in that direction,” Shari Redstone said through her spokeswoman, Nancy Sterling.

Shareholders sued Viacom over executive compensation in 2005 when CBS was part of the company. That lawsuit was resolved in March after Redstone agreed to cut his own pay and tie it to performance.

Last year, Moonves was paid $28.6 million, including $5.6 million in base salary. Redstone made about $12 million, including base and stock.

Moonves, 58, declined to comment beyond a statement:

“I love this great company and the talented people with whom I am privileged to work,” he said. “I am very excited about our future together and confident in our continued success.”

CBS announced the deal after the markets closed. Shares closed at $29.36, up 7 cents.

When Redstone split Viacom into two companies, Wall Street had figured that CBS would be the slower-growing one. However, Moonves led CBS to a 22% increase in its stock price since the January 2006 break-up.

The company’s stock is down nearly 6% this year. Some analysts have said CBS could be vulnerable if there is a writers’ strike or an economic slowdown because so much of its revenue comes from advertising.

Moonves’ new agreement includes a one-time option to buy 5 million shares of CBS Class B common stock later this week. Those stock options would vest over four years. In addition, it gives Moonves annual restricted stock units at a value of $7.6 million per year and incentives for him to stay at CBS beyond his contract.

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meg.james@latimes.com

Times staff writer Claudia Eller contributed to this report.