In a recent filing with the Securities and Exchange Commission, Paramount Global (market capitalization: $14.97 billion) disclosed the accelerated vesting of stock awards for several top executives, effective December 24, 2024. InvestingPro analysis indicates the company maintains strong liquidity, with current assets exceeding short-term obligations.
This move comes as part of the company’s efforts to mitigate the impact of potential excess parachute payments under Section 280G of the Internal Revenue Code, which may arise from a Transaction (JO:) Agreement dated July 7, 2024. With annual revenues of $28.87 billion and trading at a notably low Price/Book ratio of 0.45, InvestingPro data suggests the stock currently shows potential upside from its Fair Value.
The executives affected by this decision include Naveen Chopra, Doretha F. Lea, Nancy Phillips, Chris McCarthy, George Cheeks, and Brian Robbins. Each will see an immediate vesting and settlement of restricted share units (RSUs) and performance share units (PSUs), which were initially scheduled to vest in future years.
Specifically, Naveen Chopra, Doretha F. Lea, and Nancy Phillips will receive shares of the company’s Class B Common Stock from RSUs slated for 2025. Chris McCarthy’s vesting includes RSUs for 2025, 2026, and 2027, and PSUs with performance periods ending in 2026 and 2027. George Cheeks and Brian Robbins will also have RSUs for 2025, 2026, and 2027, and PSUs for 2026 and 2027 vested immediately.
The filing noted that if any of the impacted executives voluntarily resign or are terminated for cause before the original vesting dates, they are required to repay the after-tax amount of the accelerated RSUs or PSUs to the company within 30 days of their employment termination.
According to InvestingPro, which offers 8 additional key insights about Paramount Global’s financial health and market position, the company maintains a FAIR overall financial health score.
This decision by the Compensation Committee of Paramount Global’s Board of Directors is part of the company’s broader strategic actions. Paramount Global, headquartered in New York and formerly known as ViacomCBS Inc (NASDAQ:)., operates in the television broadcasting industry under the NASDAQ ticker symbols PARAA and PARA for its Class A and Class B Common Stock, respectively. The company’s stock has shown resilience with a 26.49% price return over the past six months, demonstrating strong momentum in the media sector.
The information in this article is based on a press release statement.
In other recent news, Paramount Global has reported several significant developments. The company recently extended the employment agreement for its Executive Vice President of Global Public Policy and Government Relations, Doretha F. Lea, through December 31, 2028. The new agreement includes an increase in her target annual cash bonus and the target value of her annual equity compensation grants.
Paramount Global also announced the establishment of a cash-based incentive program aimed at retaining key executives, with Doretha F. Lea and Nancy Phillips each potentially receiving awards of $1,000,000, contingent upon the successful closure of certain transactions.
The company sold its entire 13.01% stake in Viacom 18 Media Private Limited to Reliance Industries (NS:) Limited, a transaction expected to yield an estimated net proceeds of $456 million.
In boardroom changes, Charles E. Phillips, Jr. resigned from Paramount Global’s Board of Directors, with the company yet to announce plans for filling the vacancy.
Lastly, software billionaire Larry Ellison is set to gain control of Paramount Global following Skydance Media’s acquisition of the Redstone family’s stake in the company. Skydance Media offered $4.5 billion in cash or stock to Paramount shareholders, enhancing Paramount’s balance sheet with an additional $1.5 billion.
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