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Multimedia and entertainment conglomerate Paramount Global will pay its Chief People Officer a $1million bonus if she can retain key staff during the company’s ongoing sale to Skydance.
Paramount is being sold by Shari Redstone, whose father bought the Hollywood studio in 1994, to Skydance, a media production and finance company.
The sale has been a drawn-out process. The $8billion acquisition was agreed in July 2024 after six months of negotiations and is expected to be completed in the first half of 2025.
Why is Paramount giving executives million-dollar bonuses?
To navigate the sale, Paramount has promised its executives hefty bonuses and stock grants.
According to an SEC filing, the company has created a “transaction award program,” which will reward two executives – Nancy Phillips, EVP, Chief People Officer, and Doretha Lea, EVP, Global Public Policy and Government Relations – if they ensure a steady course and protect business continuity over the coming months.
According to the filing, Phillips and Lea must “ensure the successful operation of the Company during the period prior to the completion of the Transactions and to promote the retention of certain key employees through the closing date.”
The bonuses will not be paid out if the executives leave the company before the closing date.
It follows the news of a hefty stock grant for each of its three co-CEOs, valued at $3million.
Paramount drew interest (and scrutiny) in April 2024 after replacing outgoing CEO Bob Bakish with a three-member team it dubbed the “Office of the CEO."
Three 'co-CEOs' make up the team: CBS President and CEO George Cheeks; President and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks Chris McCarthy; and Head of Paramount Pictures and Nickelodeon Brian Robbins.
In June 2024, a short-term incentive plan increased each executive’s bonus by an additional 100% of their annual base salary.
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The latest increase in stock grants also came with the news that it would apply not only as long as they remained in their role as co-CEO, but also if they continued employment in another capacity at the business. This means a demotion from the ‘Office of the CEO’ would not compromise their right to the restricted stock.
Paramount’s executives draw scrutiny amid layoffs and deal completion
In August, Paramount announced plans to cut 15% of its US workforce as part of a $500million cost-saving drive ahead of the sale.
Roughly 2,000 staff were estimated to be laid off across three phases, 10% with immediate effect and the remaining 90% by the end of September.
“Paramount is at an inflection point where changes must be made to strengthen our business,” a memo from the three co-CEOs stated. “In partnership with our HR leaders, we are committed to providing support to employees transitioning on from Paramount and to our teams who will need to adapt to these changes... During this time, we ask that everyone please be mindful of how this news may affect your colleagues and offer support to those who need it.”
The executives also said the layoffs would focus on eliminating “redundant” functions and “streamlining corporate teams.”
The comment provoked criticism from some employees. One individual posted in an online forum: “How ironic that the "co-CEOs" claim that the layoff was about reducing "redundant functions"," they wrote.
With the prospect of cash bonuses that would equal their base salaries, Lea and Phillips will be hoping the disruption of recent months and scrutiny over its unusual executive model will not cause “key employees” to exit the business.
