CBS Corp. said chairman Sumner Redstone has stepped down and will be replaced by chief executive Officer Les Moonves, ending years of speculation about how the billionaire would cede control of his prized broadcasting company.
Moonves, 66, will remain president and CEO, according to a statement Wednesday by the broadcaster. Redstone, 92, submitted his resignation effective Tuesday and is now chairman emeritus. His daughter Shari Redstone, 61, remains vice chairman.
The action settles one of the two looming succession issues in the Redstone empire. The billionaire is also chairman of Viacom Inc., owner of MTV and Nickelodeon, which is led by longtime confidant Philippe Dauman. In an tough year for media stocks, when younger viewers were going online for entertainment, Viacom fell 45 percent in 2015, while CBS was down 15 percent.
As the elder Redstone has aged, he has faced questions about whether he is still mentally competent enough to run CBS and Viacom, where he remains chairman. While his family trust has a provision that makes his daughter CBS chairman upon his death, Shari Redstone had an agreement with Moonves so that he would take the role instead, a person familiar with the situation said last year.
Moonves, who joined CBS in 1995 as president of CBS Entertainment, has been president and CEO of CBS Corp. since 2006, when the company was separated from Viacom. Moonves is under contract to be CEO through June 2019.
Moonves and Viacom’s Dauman have employment contracts that allow each of them to leave with millions of dollars in severance if they aren’t made chairman once Sumner Redstone is gone. Shari Redstone doesn’t have a similar arrangement with Viacom’s Dauman to the one she has with Moonves.
Sumner Redstone controls the majority of the voting shares of both CBS and Viacom through a family holding company, National Amusements Inc.
Manuela Herzer, an ex-girlfriend of Redstone, sued the billionaire last year, claiming he was mentally incompetent when he kicked her out of his house and put Dauman in charge of his health care if he could no longer make decisions on his own. Stephen Read, a geriatric psychiatrist retained by Herzer, was scheduled to examine Redstone last week.