By Joyce Yu
Shares of CBS and JD rebound after sluggish performance weighed on by sexual scandals of their senior executives. Reports say CBS board is offering its chief executive Les Moonves a roughly $100 million exit package made up almost entirely of CBS stock.
Citing anonymous sources, CNBC, reported Thursday that the CBS board is in talks with the chief executive that would result in his leaving the company. Moonves’ current remuneration package is due as much as $180 million in severance and a production deal. The board is also reported to want the right to claw back some of that compensation if sexual harassment allegations against Moonves are confirmed.
This came about a month after a report in The New Yorker that detailed allegations of sexual harassment and misconduct against CBS’s longtime CEO. While an independent counsel was hired by the board to investigate those claims, the board has been talking about Moonves’ potential exit with focus being on the size of compensation package. The latest development bolsters price of CBS shares by 5% on Thursday.
JD.com has been in a more different position after company’s billionaire founder and Chief Executive Liu Qiangdong was arrested last week on suspicion of rape. JD.com’s shares plunged the most on record in the US, declining 16% since resuming trading on Tuesday after the Labour Day public holiday. It tumbled 10.6% in Nasdaq trading, the steepest percentage fall since its IPO on May 21, 2014, sending Liu Qiangdong’s stock options under water. Earning a nominal salary of 1 yuan per year and a zero cash bonus, Liu Qiangdong was granted an option to acquire 26 million class A ordinary shares in the company under a 10-year compensation plan approved by the board in 2015.
With the details still unknown, investors turn their attention to evaluate the impact the scandal will have on JD’s operations. On corporate governance, several US law firms are considering class-action lawsuits against JD.com for failing to disclose information pertinent to the arrest of Liu. In terms of day to day operation of the company, JD.com currently has no chief operating officer after the former COO stepped down two years ago. According to Minnesota law, if Liu is found guilty of first degree sexual assault, the maximum penalty is 30 years and the minimum is 12 years. This has highlighted the lack of a second-in-command among senior management at the e-commerce giant.
