Table of Contents
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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.)
 
 
Filed by the Registrant  
Filed by a Party other than the Registrant  
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material under
§240.14a-12
Paramount Global
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
 
No fee required
 
Fee paid previously with preliminary materials
 
Fee computed on table in exhibit required by Item 25(b) per
Exchange
Act
Rules
14a-6(i)(1)
and
0-11
 
 
 


Table of Contents

LOGO


Table of Contents

Message To Our Stockholders

 

 

 

Dear Stockholder:

 

     March 17, 2023

You are cordially invited to attend the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Paramount Global (“we,” “us,” “our,” “Paramount” or the “Company”), which is scheduled to be held by live webcast at 9:00 a.m., Eastern Daylight Time, on Monday, May 8, 2023. Holders of Paramount Class A Common Stock are being asked to vote on the matters listed in the attached Notice of 2023 Annual Meeting of Stockholders.

 

The Annual Meeting webcast may be attended by company stockholders and others by visiting the following website at the designated time: www.virtualshareholdermeeting.com/PARA2023. Access to the website will begin at 8:45 a.m., Eastern Daylight Time, on May 8th, and we encourage stockholders and other attendees to access the Annual Meeting website prior to the meeting start time.

 

To be admitted to the Annual Meeting webcast at the website provided above, holders of Paramount Class A Common Stock and Paramount Class B Common Stock should enter the 16-digit control number found on their Notice of Internet Availability of Proxy Materials, proxy card or voting instruction card, as applicable. Any others may attend the meeting as a guest by following the instructions provided on the Annual Meeting website.

 

As always, we encourage holders of Class A Common Stock to submit their proxy and vote their shares prior to the Annual Meeting. Class A stockholders may vote in advance of the meeting by telephone or through the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials or in the 2023 Proxy Statement, or by returning a proxy card or voting instruction card if they received a printed copy of the proxy materials. Holders of Class A Common Stock may also vote during the Annual Meeting by following the instructions on the Annual Meeting website once they enter the meeting.

 

Holders of Class A Common Stock and Class B Common Stock may submit questions in advance of the meeting, from 9:00 a.m., Eastern Daylight Time, on April 24, 2023 until 5:00 p.m., Eastern Daylight Time, on May 3, 2023, by visiting www.proxyvote.com, entering their 16-digit control number and following the instructions. Holders of Class A Common Stock and Class B Common Stock may also submit questions during the meeting and will find instructions for doing so on the Annual Meeting website once they enter the meeting.

 

National Amusements, Inc., which as of March 13, 2023, beneficially owned shares of our Class A Common Stock representing approximately 77.4% of the voting power of Paramount’s common stock, has advised us that it intends to vote all of its shares of our Class A Common Stock in accordance with the recommendations of the Board of Directors on Items 1, 2, 3, 4, 5 and 6 in the attached Notice. Therefore, the determination of Items 1, 2, 3, 4, 5 and 6 in accordance with the Board’s recommendations is assured.

 

If you have elected to receive printed copies of our proxy statements, annual reports and other materials relating to the Annual Meeting and want to elect to receive these documents electronically next year instead of by mail, please go to http://enroll.icsdelivery.com/para and follow the instructions to enroll. We highly recommend that you consider electronic delivery of these documents as it helps to lower our costs and reduce the amount of paper mailed to your home.

 

We appreciate your interest in and support of Paramount and look forward to your participation at the Annual Meeting.

 

 

Sincerely,

 

LOGO

 

 

Robert M. Bakish

President and Chief Executive Officer

    

LOGO

 

Key Strategic and
Operational Highlights:

 

•  Benefiting from a broad range of popular content, Paramount+ subscribers grew 70% year-over-year to 55.9 million at December 31, 2022. Pluto TV global monthly active users (MAUs) increased 22% year-over-year to 78.5 million for December 2022.

 

•  Paramount Pictures released six films in 2022 that debuted at number one at the domestic box office, including Top Gun: Maverick, the fifth highest-grossing domestic movie of all time.

 

•  CBS finished the 2021-2022 broadcast season as America’s number one broadcast network in primetime for the 14th consecutive season and was number one in entertainment across multiple genres in 2022.

 

•  Adult cable series on our cable networks accounted for three of the top five and five of the top 10 series among adults ages 18 to 34, while Nickelodeon networks accounted for seven of the top 10 cable series among kids ages two to 11.

 

LOGO


Table of Contents

Notice of 2023 Annual Meeting of Stockholders

 

To Paramount Global Stockholders:

 

The 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Paramount Global (“we,” “us,” “our,” “Paramount” or the “Company”) will be held by live webcast at the date, time and website noted below. The close of business on March 13, 2023 has been fixed as the record date for determining the holders of shares of Paramount Class A Common Stock entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

 

The principal business of the Annual Meeting will be the consideration of the following matters:

 

1   The election of 11 directors;

 

2   The ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for fiscal year 2023;

 

3   An advisory (non-binding) vote on the compensation of the Company’s named executive officers, as disclosed in the proxy statement;

 

4   An advisory (non-binding) vote on the frequency of holding the advisory (non-binding) vote on the compensation of the Company’s named executive officers (every one year, two years or three years);

 

5   A stockholder proposal requesting that our Board of Directors take steps to adopt a policy ensuring that the Board Chair is an independent director;

 

6   A stockholder proposal requesting semiannual disclosure of detailed electoral contributions data; and

 

7   Such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

 

For a period of at least 10 days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will be open to the examination of any stockholder during ordinary business hours by calling Investor Relations at 1-877-227-0787. In addition, a complete list of stockholders entitled to vote at the Annual Meeting will be open to the examination of any stockholder during the meeting by following the instructions on the Annual Meeting website once they enter the meeting.

 

By order of the Board of Directors,

 

LOGO

 

Christa A. D’Alimonte

Executive Vice President, General Counsel and Secretary

 

March 17, 2023

 

    

 

Meeting Information

 

Date and time:

Monday, May 8, 2023

at 9:00 a.m. EDT

 

Website:

www.virtualshareholdermeeting.com/PARA2023

 

Record date:

Monday, March 13, 2023

 

 

 

  PARAMOUNT GLOBAL   

 

LOGO   


Table of Contents

Table of Contents

 

PROXY STATEMENT HIGHLIGHTS     1  
VOTING AND SOLICITATION OF PROXIES     5  
CORPORATE GOVERNANCE     8  
OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) STRATEGY     10  
OUR BOARD OF DIRECTORS     12  
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT     21  
RELATED PERSON TRANSACTIONS     24  

ITEM 1

ELECTION OF DIRECTORS

    25  
DIRECTOR COMPENSATION     32  

Outside Director Compensation During 2022

    32  

Description of Director Compensation

    32  

ITEM 2

RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

    36  
REPORT OF THE AUDIT COMMITTEE     37  
FEES FOR SERVICES PROVIDED BY THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     39  
COMPENSATION DISCUSSION AND ANALYSIS     40  
COMPENSATION COMMITTEE REPORT     58  
EXECUTIVE COMPENSATION     59  

Summary Compensation Table for Fiscal Year 2022

    59  

Grants of Plan-Based Awards During 2022

    63  

Outstanding Equity Awards at Fiscal Year-End 2022

    64  

Option Exercises and Stock Vested During 2022

    65  

Pension Benefits in 2022

    66  

Nonqualified Deferred Compensation in 2022

    67  

Potential Payments Upon Termination and Certain Other Events

    68  

Pay Ratio

    72  

Pay Versus Performance

    73  

ITEM 3

ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

    77  

ITEM 4

ADVISORY (NON-BINDING) VOTE ON THE FREQUENCY OF HOLDING AN ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

    78  
EQUITY COMPENSATION PLAN INFORMATION     79  

ITEM 5

STOCKHOLDER PROPOSAL REQUESTING THAT OUR BOARD OF DIRECTORS TAKE STEPS TO ADOPT A POLICY ENSURING THAT THE BOARD CHAIR IS AN INDEPENDENT DIRECTOR

    80  

ITEM 6

STOCKHOLDER PROPOSAL REQUESTING SEMIANNUAL DISCLOSURE OF DETAILED ELECTORAL CONTRIBUTIONS DATA

    82  
OTHER MATTERS     85  
2024 ANNUAL MEETING OF STOCKHOLDERS     85  
 

 

  PARAMOUNT GLOBAL   

 

LOGO   


Table of Contents

 

Paramount Global

2023 Proxy Statement

 

 

 

Proxy Statement Highlights

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement before voting.

2023 ANNUAL MEETING OF STOCKHOLDERS

The 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Paramount Global (“we,” “us,” “our,” “Paramount” or the “Company”) will be held by live webcast at the date, time and website noted below.

 

 

Date and time:

Monday, May 8, 2023 at

9:00 a.m. EDT

 

 

 

Website:

www.virtualshareholdermeeting.com/PARA2023

 

 

Record date:

March 13, 2023

HOW TO VOTE

If you are a stockholder of record, you may vote during the Annual Meeting by following the instructions on the Annual Meeting website once you enter the meeting, or by proxy using any of the following methods:

 

LOGO

 

By Internet:

 

at www.proxyvote.com

 

 

LOGO

 

By mail:

 

If you receive a paper copy of the proxy materials, you may also vote by completing, signing, dating and returning the proxy card by mail.

LOGO

 

By telephone:

 

call toll-free 1-800-690-6903

   

Votes submitted by Internet or phone must be received by 11:59 p.m., Eastern Daylight Time, on May 7, 2023. Votes submitted by mail must be received prior to the Annual Meeting. Please see “Voting and Solicitation of Proxies” for detailed voting instructions.

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

 

  Item    Description    Board Vote
Recommendation
     Page Reference
(for more detail)
1    The election of 11 directors   

FOR each of

the director nominees

     25
2   

The ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public

accounting firm for fiscal year 2023

   FOR      36
3    An advisory (non-binding) vote on the compensation of the Company’s named executive officers, as disclosed in this proxy statement    FOR      77

 

 

        

 

  

 

2023 PROXY STATEMENT        1  

 


Table of Contents

PROXY STATEMENT HIGHLIGHTS

 

  Item    Description    Board Vote
Recommendation
     Page Reference
(for more detail)
4    An advisory (non-binding) vote on the frequency of holding the advisory (non-binding) vote on the compensation of the Company’s named executive officers (every one year, two years or three years)    THREE YEARS      78
5    A stockholder proposal requesting that our Board of Directors take steps to adopt a policy ensuring that the Board Chair is an independent director    AGAINST      80
6    A stockholder proposal requesting semiannual disclosure of detailed electoral contributions data    AGAINST      82

HOW TO SUBMIT QUESTIONS

Holders of Class A Common Stock and Class B Common Stock may submit questions in advance of the meeting, from 9:00 a.m., Eastern Daylight Time, on April 24, 2023 until 5:00 p.m., Eastern Daylight Time, on May 3, 2023, by visiting www.proxyvote.com, entering their 16-digit control number and following the instructions. Holders of Class A Common Stock and Class B Common Stock may also submit questions during the meeting and will find instructions for doing so on the Annual Meeting website once they enter the meeting.

BOARD AND GOVERNANCE HIGHLIGHTS

Board of Directors: Nominees for Election

Our 11 director nominees (ten of whom are current members of our Board of Directors (the “Board of Directors” or “Board”)), as a group, have extensive and diverse leadership and subject matter experience and knowledge that is important to us. Our nominees include eight independent directors.

 

Name

   Age    Director Since    Career Highlights    Independent
Director
   Standing
Committee
Memberships

Shari E. Redstone†

   68    1994    Chairperson, Chief Executive Officer and President of National Amusements, Inc. and Co-Founder and Managing Partner of Advancit Capital      
           

Robert M. Bakish

   59    2019    President and Chief Executive Officer, Paramount Global      
           

Barbara M. Byrne

   68    2018    Former Vice Chairman, Investment Banking at Barclays PLC       AC*
           

Linda M. Griego

   75    2007    President and Chief Executive Officer of Griego Enterprises, Inc.       CC
           

Robert N. Klieger

   51    2017    Partner at Hueston Hennigan LLP      
           

Judith A. McHale

   76    2019    President and Chief Executive Officer of Cane Investments, LLC       AC; CC*
           

Dawn Ostroff

   62    N/A    Former Chief Content and Advertising Business Officer of Spotify       N/A
           

Charles E. Phillips, Jr.

   63    2019    Co-Founder and Managing Partner of Recognize       NG
           

Susan Schuman

   63    2018    Executive Chair and Co-Founder of SYPartners LLC and Vice Chair of kyu Collective       NG
           

Nicole Seligman

   66    2019    Former President of Sony Entertainment, Inc.       NG*
           

Frederick O. Terrell

   68    2018    Senior Advisor, Centerbridge Partners, L.P.       AC
 

AC = Audit Committee

CC = Compensation Committee

NG = Nominating and Governance Committee

* = Committee Chair

† = Non-Executive Chair of the Board

 

 

  2        PARAMOUNT GLOBAL   

 

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Table of Contents

PROXY STATEMENT HIGHLIGHTS

 

Director Nominee Composition

 

LOGO

EXECUTIVE COMPENSATION HIGHLIGHTS

Compensation Philosophy and Objectives

We designed our executive compensation programs to motivate and reward business success and to increase shareholder value, based on the following core objectives:

 

 

Pay for Performance

Ensure plans provide reward levels that

reflect variances between actual and

desired performance results.

 

     

 

 

Flexible

Enable management and the Board to

make decisions based on the needs of the

business and to recognize different levels

of individual contribution.

 

    

 

Market Competitive

Consider compensation programs of our

peers in order to attract and retain the

talent needed to drive sustainable competitive

advantage and deliver value to shareholders.

 

    

 

Focused on Shareholder Value

Align executives’ interests with shareholder

interests, with particular emphasis on creating

incentives that reward executives for consistently

increasing the value of Paramount.

 

 

        

 

  

 

2023 PROXY STATEMENT        3  

 


Table of Contents

PROXY STATEMENT HIGHLIGHTS

 

Pay for Performance

We believe that those executives with significant responsibility and a greater ability to influence our results should have a significant portion of their total compensation tied directly to business results, and we have continued to shift our executive compensation packages to further emphasize performance-based compensation that is aligned with our business and operational strategy. Accordingly, a high percentage of our named executive officers’ (“NEOs”) and other senior executives’ total target compensation is “at risk” – meaning that we do not intend for them to receive targeted pay amounts if performance does not meet expectations. For 2022, the Compensation Committee increased the percentage of Mr. Bakish’s and our other NEOs’ long-term equity incentive awards that was delivered in performance share units to 50% and 35%, respectively.

Consistent with this philosophy, our performance-based compensation programs provide for the opportunity to reward NEOs and other senior executives for contributing to annual financial and operational performance (through annual bonus programs) and stock price appreciation (through long-term equity incentives). The only fixed component of pay is annual base salary. Annual cash incentive awards and long-term equity incentive awards are subject to company performance and/or stock price performance.

As illustrated below, approximately 90% of Mr. Bakish’s total target compensation as of December 31, 2022 was at risk and thus strongly linked to our results.

 

LOGO

 

  4        PARAMOUNT GLOBAL   

 

LOGO   


Table of Contents

Voting and Solicitation of Proxies

SOLICITATION OF PROXIES

A proxy is being solicited by our Board of Directors for use at the Annual Meeting. The close of business on March 13, 2023 is the record date for determining the record holders of our Class A Common Stock, par value $0.001 per share, entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. Holders of our non-voting Class B Common Stock, par value $0.001 per share, are not entitled to vote at the Annual Meeting or any adjournment or postponement thereof.

As of March 13, 2023, we had outstanding 40,704,341 shares of our Class A Common Stock, with each of such shares entitled to one vote, and 610,765,722 shares of our non-voting Class B Common Stock (together with our Class A Common Stock, our “Common Stock”).

INTERNET AVAILABILITY OF PROXY MATERIALS

In accordance with SEC rules, instead of mailing to stockholders a printed copy of our proxy statement, annual report and accompanying letter to stockholders (the “proxy materials”), we intend to mail to stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”), which advises that the proxy materials are available on the Internet. We intend to commence our distribution of the Notice of Internet Availability on or about March 22, 2023. Stockholders receiving a Notice of Internet Availability by mail will not receive a printed copy of proxy materials, unless they so request. Instead, the Notice of Internet Availability will instruct stockholders as to how they may access and review the proxy materials on the Internet.

Stockholders who receive a Notice of Internet Availability by mail who would like to receive a printed copy of our proxy materials, including a proxy card or voting instruction card, should follow the instructions for requesting these materials included in the Notice of Internet Availability. Stockholders who currently receive printed copies of proxy materials who would like to receive future copies of these documents electronically instead of by mail should follow the instructions for requesting electronic delivery set forth in the “Other Matters” section of this proxy statement.

SUBMISSION OF PROXIES

Each of Robert M. Bakish, our President and Chief Executive Officer, and Christa A. D’Alimonte, our Executive Vice President, General Counsel and Secretary (the “proxy holders”), individually and with the power to appoint his or her substitute, has been designated by our Board of Directors to vote the shares represented by proxy at the Annual Meeting. They will vote the shares represented by each valid and timely received proxy in accordance with the stockholder’s instructions, or if no instructions are specified, in accordance with the recommendations of the Board as described in this proxy statement. If any other matter properly comes before the Annual Meeting, the proxy holders will vote on that matter in their discretion.

Holders of record of our Class A Common Stock as of March 13, 2023 may submit a proxy in the following ways:

 

 

By Internet: Holders of record may access www.proxyvote.com and follow the online instructions. The Internet proxy must be received no later than 11:59 p.m., Eastern Daylight Time, on May 7, 2023. You will need the control number from your Notice of Internet Availability (or, if you received a printed copy of the proxy materials, the proxy card) when you access the website.

 

 

By Telephone: Holders of record living in the United States or Canada may use any touch-tone telephone to call 1-800-690-6903 and follow the recorded instructions. The telephone proxy must be received no later than 11:59 p.m., Eastern Daylight Time, on May 7, 2023. You will need the control number from your Notice of Internet Availability (or, if you received a printed copy of the proxy materials, the proxy card) when you call.

 

 

By Mail: Holders of record who received a printed copy of the proxy materials may complete, sign and date the proxy card and return it in the envelope provided, so that it is received prior to the Annual Meeting.

“Beneficial holders” (defined below) will receive voting materials, including instructions on how to vote, directly from their broker or other nominee as the holder of record.

Shares Held in our 401(k) Plan. Voting instructions relating to shares of our Class A Common Stock held in our 401(k) plan must be received no later than 11:59 p.m., Eastern Daylight Time, on May 3, 2023, so that the trustees of the plan

 

 

        

 

  

 

2023 PROXY STATEMENT        5  

 


Table of Contents

VOTING AND SOLICITATION OF PROXIES

 

(who vote the shares on behalf of the respective plan participants) have adequate time to tabulate the voting instructions. Shares held in the 401(k) plan that are not voted or for which the trustees do not receive timely voting instructions will be voted by the trustees in the same proportion as the shares held in the plan that are timely voted.

Voting Other than by Proxy. While we encourage holders of our Class A Common Stock to vote by proxy, holders of our Class A Common Stock (other than shares held in the 401(k) plan) also have the option of voting their shares during the Annual Meeting by following the instructions on the Annual Meeting website once they enter the meeting. Some holders of our Class A Common Stock hold their shares in “street name” through a broker or other nominee and are therefore known as “beneficial holders.” Beneficial holders should follow the voting instructions provided to them by their broker or other nominee in order to vote during the Annual Meeting.

REVOCATION OF PROXIES

A proxy may be revoked before the voting deadline (i) by sending written notice to Proxy Services, P.O. Box 9111, Farmingdale, NY 11735-9543, (ii) by timely submission (including telephonic or Internet submission as described above) of a proxy bearing a later date than the proxy being revoked or (iii) by voting during the Annual Meeting. Revocations made by telephone or through the Internet must be received by 11:59 p.m., Eastern Daylight Time, on May 7, 2023. Beneficial holders should follow the voting instructions provided to them by their broker or other nominee in order to revoke their proxy or change their vote.

Shares Held in our 401(k) Plan. Voting instructions relating to shares of our Class A Common Stock held in our 401(k) plan may be revoked prior to 11:59 p.m., Eastern Daylight Time, on May 3, 2023, by timely submission (including telephonic or Internet submission as described above) of revocation or of voting instructions bearing a later date than the voting instructions being revoked to Proxy Services, P.O. Box 9111, Farmingdale, NY 11735-9543.

QUORUM

Under our Amended and Restated Bylaws, the holders of a majority of the aggregate voting power of our Class A Common Stock outstanding on the record date, present in person or represented by proxy at the Annual Meeting, will constitute a quorum. Abstentions and broker non-votes will be treated as present for purposes of determining the presence of a quorum.

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

The principal business of the Annual Meeting will be the consideration of the following matters:

 

1.

The election of each of the 11 nominated directors;

 

2.

The ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm (“independent auditor”) for fiscal year 2023;

 

3.

An advisory (non-binding) vote on the compensation of the Company’s named executive officers, as disclosed in this proxy statement;

 

4.

An advisory (non-binding) vote on the frequency of holding the advisory (non-binding) vote on the compensation of the Company’s named executive officers (every one year, two years or three years);

 

5.

A stockholder proposal requesting that our Board of Directors take steps to adopt a policy ensuring that the Board Chair is an independent director; and

 

6.

A stockholder proposal requesting semiannual disclosure of detailed electoral contributions data.

The Board recommends a vote FOR matters 1, 2 and 3, THREE YEARS on matter 4, and AGAINST matters 5 and 6.

The affirmative vote of the holders of a majority of the aggregate voting power of our Class A Common Stock entitled to vote and present in person or represented by proxy at the Annual Meeting is required to elect each of the nominated directors and to determine Items 2, 5 and 6. Items 3 and 4 are advisory votes only and are not binding. Notwithstanding the advisory nature of these votes, as discussed under “Item 3” and “Item 4” below, the Board will consider the voting outcomes when making determinations regarding these matters. An abstention with respect to matters 1, 2, 3, 5 and 6 will have the effect of a vote against such matter, and an abstention with respect to matter 4 will not have an effect on the outcome of that matter.

 

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VOTING AND SOLICITATION OF PROXIES

 

Under the listing standards of the Nasdaq stock market (“Nasdaq”), a broker or other nominee holding shares of our Class A Common Stock on behalf of a beneficial holder may not be permitted to exercise voting discretion with respect to some matters to be acted upon at stockholders’ meetings. Therefore, if a beneficial holder does not give the broker or nominee specific voting instructions, the holder’s shares may not be voted on those matters and a broker non-vote will occur. Under the Nasdaq listing standards, brokers or nominees may vote on Item 2, but not on Items 1, 3, 4, 5 and 6, if they do not receive instructions from the beneficial holder of the shares held in street name. A broker non-vote is not treated as a vote on, and will therefore have no effect on the voting results for, Items 1, 3, 4, 5 and 6.

As of March 13, 2023, National Amusements, Inc. (“National Amusements”) beneficially owned, directly and indirectly through a wholly-owned subsidiary, approximately 77.4% of our outstanding Class A Common Stock and approximately 9.7% of our outstanding Class A Common Stock and Class B Common Stock on a combined basis. Shari Redstone, Chairperson, Chief Executive Officer and President of National Amusements, is our non-executive Board Chair. National Amusements has advised us that it intends to vote all of its shares of our Class A Common Stock in accordance with the recommendations of the Board on Items 1, 2, 3, 4, 5 and 6. Such action by National Amusements will be sufficient to constitute a quorum and to determine the outcomes of Items 1, 2, 3, 4, 5 and 6 in accordance with the Board’s recommendations.

HOW TO SUBMIT QUESTIONS

Holders of Class A Common Stock and Class B Common Stock may submit questions in advance of the meeting, from 9:00 a.m., Eastern Daylight Time, on April 24, 2023 until 5:00 p.m., Eastern Daylight Time, on May 3, 2023, by visiting www.proxyvote.com, entering their 16-digit control number and following the instructions. Holders of Class A Common Stock and Class B Common Stock may also submit questions during the meeting and will find instructions for doing so on the Annual Meeting website once they enter the meeting.

COST OF PROXY SOLICITATION AND INSPECTOR OF ELECTION

We will pay the cost of the solicitation of proxies, including the preparation, printing and mailing of the Notice of Internet Availability and the proxy materials. We will furnish copies of the Notice of Internet Availability and, if requested, the proxy materials to banks, brokers, fiduciaries and custodians that hold shares on behalf of beneficial holders so that they may forward the materials to the beneficial holders.

American Election Services, LLC will serve as the independent inspector of election for the Annual Meeting.

MAILING ADDRESS

Our mailing address is 1515 Broadway, New York, NY 10036.

 

 

        

 

  

 

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Corporate Governance

Our corporate governance practices are established and reviewed by our Board of Directors. The Board, with assistance from its Nominating and Governance Committee, regularly assesses our governance practices in light of legal and regulatory requirements, input from our stakeholders and governance best practices. In several areas, our practices go beyond the requirements of the Nasdaq listing standards. For example, despite being a “controlled company” (i.e., a company of which more than 50% of the voting power is held by an individual or another company), we have a majority of independent directors on our Board and entirely independent committees, including an independent Compensation Committee and an independent Nominating and Governance Committee, although not required for controlled companies under the Nasdaq listing standards. Our Audit Committee is also entirely independent.

Our principal governance documents are as follows:

 

 

Corporate Governance Guidelines

 

 

Board Committee Charters:

 

   

Audit Committee Charter

 

   

Compensation Committee Charter

 

   

Nominating and Governance Committee Charter

 

 

Global Business Conduct Statement

 

 

Supplemental Code of Ethics for Senior Financial Officers

These documents are available on the “Investors—Corporate Governance & ESG” page of our website at ir.paramount.com, and copies of these documents may be requested by writing to Investor Relations, Paramount Global, 1515 Broadway, New York, New York 10036. We encourage our stockholders to read these documents, as we believe they illustrate our commitment to good governance practices. Certain key provisions of these documents are summarized below.

CORPORATE GOVERNANCE GUIDELINES

Our Corporate Governance Guidelines (the “Guidelines”) set forth our corporate governance principles and practices on a variety of topics, including the responsibilities, composition and functioning of the Board, director qualifications and the roles of the Board Committees. The Guidelines are periodically reviewed and updated as needed. The Guidelines provide, among other things, that:

 

 

A majority of the members of the Board must be independent of the Company, as independence is determined under the Nasdaq listing standards and the standards set forth in the Guidelines;

 

 

Each of our Committees must be comprised entirely of independent directors;

 

 

Separate executive sessions of the non-management directors and independent directors must be held a minimum number of times each year;

 

 

The Board, acting on the recommendation of the Nominating and Governance Committee, will determine whether a director candidate’s service on more than three other public company boards of directors is consistent with service on our Board;

 

 

Director compensation will be established in light of the policies set forth in the Guidelines;

 

 

Within three years of joining the Board, directors are expected to own shares of our Common Stock having a market value of at least five times the annual cash retainer paid to them, in accordance with the Guidelines;

 

 

Director tenure and retirement will be considered on a case-by-case basis depending on factors such as the director’s age, experience, qualifications, performance and history of service on the Board;

 

 

Each of the Board and its Committees will hold an annual self-evaluation to assess its effectiveness; and

 

 

The Compensation Committee and the Nominating and Governance Committee will together review, at least annually, management succession planning and report to the non-management directors on these reviews.

 

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CORPORATE GOVERNANCE

 

BOARD COMMITTEE CHARTERS

Each standing Board Committee operates under a written charter that has been adopted by the Board. We have three standing Committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. The Committee charters set forth the purpose, objectives and responsibilities of the respective Committee and discuss matters such as Committee membership requirements, number of meetings and the setting of meeting agendas. The charters are required to be assessed annually, in accordance with the Guidelines, and are updated as needed. More information on the Committees, their respective roles and responsibilities and their charters can be found under “Our Board of Directors — Board Committees.”

GLOBAL BUSINESS CONDUCT STATEMENT

Our Global Business Conduct Statement (“BCS”) sets forth our standards for ethical conduct required of all of our directors and employees. The BCS is available on the “Investors—Corporate Governance & ESG” page of our website at ir.paramount.com and on our intranet sites. As part of our compliance and ethics program, we distribute the BCS to our employees and directors and administer an online BCS training program. Directors and full-time employees are required to certify as to their compliance with the BCS and, on an ongoing basis, disclose any potential conflicts of interest. The BCS addresses, among other things, topics such as:

 

 

Compliance with laws, rules and regulations, including the Foreign Corrupt Practices Act;

 

 

Conflicts of interest, including the disclosure of potential conflicts to the Company;

 

 

Confidentiality, insider information and trading, and fair disclosure;

 

 

Financial accounting and improper payments;

 

 

Our commitment to providing equal employment opportunities and a discrimination- and harassment-free workplace environment;

 

 

Fair dealing and relations with competitors, customers and suppliers;

 

 

Health, safety and the environment; and

 

 

Political contributions and payments.

The BCS provides numerous avenues for employees to report violations of the BCS or other matters of concern, whether anonymously or with attribution. These avenues include a telephone hotline, a website and direct communication with our compliance officers and lawyers. The BCS also provides that we will protect anyone who makes a good faith report of a violation of the BCS and that retaliation against an employee who makes a good faith report will not be tolerated.

Waivers of the BCS for our executive officers or directors will be disclosed on our website at ir.paramount.com or by Form 8-K filed with the SEC.

SUPPLEMENTAL CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS

The Supplemental Code of Ethics is applicable to our President and Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer. The Supplemental Code of Ethics addresses matters specific to those senior financial positions in the Company, including responsibility for the disclosures made in our filings with the SEC, reporting obligations with respect to certain matters and a general obligation to promote honest and ethical conduct within the Company. The senior financial officers are also required to comply with the BCS.

Amendments to or waivers of the Supplemental Code of Ethics for these officers will be disclosed on our website at ir.paramount.com or by Form 8-K filed with the SEC.

 

 

        

 

  

 

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Our Environmental, Social and Governance (ESG) Strategy

Paramount is committed to responsible and sustainable business practices, which strengthen our ability to innovate and better serve our partners, audiences and stockholders. We continue to expand upon our environmental, social and governance (“ESG”) strategy, with the goal of transparently managing and communicating our most material ESG impacts and initiatives.

We are committed to implementing and tracking progress against goals that will position us as a leader in ESG and sustainability. This commitment informs our work to integrate ESG into the way we do business and better understand our ESG impacts as a company and across our global brands.

 

HOW WE MANAGE ESG

 

Our commitment to ESG starts at the top, with our Board of Directors and senior leadership. The Nominating and Governance Committee of the Board has direct oversight of our handling of ESG matters and regularly considers ESG-related matters at its meetings.

 

We have a team dedicated to driving our ESG strategy forward and overseeing our annual reporting and responses to ESG inquiries and assessments, which is led by a steering committee that includes our Chief Executive Officer, Chief Financial Officer and General Counsel. We have prioritized transparency and disclosure, particularly of our most material impacts.

 

Our ESG strategy consists of three pillars: On-Screen Content and Social Impact; Workforce and Culture; and Sustainable Production and Operations. Each of these pillars captures important parts of our business and the way we operate. As we develop and publish ESG goals in each area, we will continue to ensure these goals are relevant to our business, audiences and shareholders.

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OUR ESG COMMUNICATIONS

In 2020, we conducted and published the results of our first Company-wide ESG materiality assessment to identify the most important ESG-related risks and opportunities across our business globally. The results of this materiality assessment informed our ESG strategy, which we also launched in 2020 as part of our first annual comprehensive ESG Report. Our 2020 ESG Report provided our key stakeholders with more detail about our commitment and approach to managing ESG strategically across the Company.

In 2021, we continued to make diversity, equity, inclusion and belonging cornerstones of our culture and business. As part of our efforts to build a culture of transparency and accountability, we reported on gender and ethnic diversity across all levels of our organization. More information about these efforts is available on our website at www.paramount.com/inclusion. We also continued to develop measurable and time-bound ESG goals that align with the future of our business and the unique power of our Company and its brands. The 2021 ESG Report disclosed qualitative and quantitative data across several relevant topic areas, including diversity and inclusion, our culture, and our efforts to elevate the importance of sustainable production across the media and entertainment industry.

In 2022, we published our third annual ESG Report, which outlines the Company’s progress toward its ESG goals. The 2022 ESG Report includes updated workforce and environmental impact data, an overview of the Company’s ESG governance practices, and additional information regarding our efforts to advance diversity and inclusion in front of and behind the camera through the Company’s Office of Global Inclusion and global Content for Change initiative.

In 2023, we will continue to pursue our Company-wide ESG goals and we are working to identify appropriate ESG-related targets and goals for several of our brands and business units. To further integrate these targets and goals

 

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OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) STRATEGY

 

across our operations, we are leveraging our ESG governance structure to pilot and expand ESG initiatives across the organization, which will help us advance what matters most to our business. We will continue to report on our material ESG-related risks and opportunities and progress towards our targets and goals, including our diversity and workforce engagement initiatives, our climate change-related disclosures, and our approach to understanding and managing our ESG impacts.

To learn more about Paramount’s ESG efforts and to view our materiality assessment and ESG reports, please visit: www.paramount.com/sustainability.

OUR POLICIES AND PRACTICES CONCERNING POLITICAL ACTIVITY

We believe that civic engagement and participation in the political process are important to our business, our stakeholders and our country. Public policy decisions often have a significant impact on our business, and we believe that being involved in the political process is important to our success. We are committed to participating in the political process to promote our interests and business objectives, without regard to our employees’ or our directors’ political beliefs. We, therefore, support candidates seeking elected office at all levels of government who support issues important to Paramount’s business, including intellectual property, copyright, tax and foreign trade issues.

We believe that our governance practices regarding Company political activity are robust and that our current disclosures allow stockholders and other stakeholders to understand these priorities and practices.

Our BCS applies to all Paramount employees and directors and contains policies governing political contributions, lobbying and personal political activities. Compliance with the BCS is overseen by our Compliance team and, with respect to the policies relating to political activities, our Government Relations team. Our Audit Committee is responsible for reviewing the BCS at least biennially. As noted below, all political contributions and activities by Paramount must be approved in advance by Paramount’s Government Relations Office.

Our public policy priorities and strategies, political contributions and trade association memberships promote our business objectives and allow our stockholders and other stakeholders to evaluate our positions for consistency with our goals and stockholder interests.

State & Local Contributions; Ballot Measures: Where permitted by law, we may contribute directly to state and local candidates, state party committees and other state and local political entities, as well as to ballot measure committees. All such Company contributions must be approved in advance by our Government Relations Office. These contributions are disclosed under applicable laws that require recipients of political contributions to disclose the source, date and amount of all contributions received and, in the case of state and local contributions, are publicly available on the websites of relevant state agencies for contributions made to state candidates and committees.

Independent Expenditures; 501(c)(4) Organizations; 527 Committees: While companies are permitted by law to engage in independent expenditures or electioneering communications to advocate for the election or defeat of federal, state, or local candidates, we do not engage directly in such activity at this time. We also do not make donations to 501(c)(4) organizations or 527 Committees at this time. To the extent that we make any such contributions, all such Company contributions must be approved in advance by our Government Relations Office.

Political Action Committee: As permitted by U.S. law, we have created the Paramount Global Political Action Committee (the “Paramount PAC”) to collect employee donations to contribute to federal candidates and other committees regulated by the Federal Election Commission (the “FEC”). Contributions to federal candidates and committees are made only through the Paramount PAC, in accordance with FEC regulations, and all contributions are managed by our Government Relations Office. To provide funding for the Paramount PAC, we periodically solicit voluntary contributions from eligible employees. We fully disclose all Paramount PAC activity on reports filed with the FEC, which are publicly available on the FEC’s website at https://www.fec.gov./data/committee/C00167759/. The Paramount PAC does not contribute to state or local candidates and committees.

Political Expenditures by Trade Associations: We are a member of certain trade associations and coalitions, such as the Motion Picture Association, the Internet & Television Association, and the National Association of Broadcasters, that we believe can assist us in achieving our long-term strategic goals. Some of these associations and coalitions engage in lobbying and policy advocacy. Payments to these organizations, such as trade association dues, do not imply our agreement with or endorsement of an organization’s activities, positions or expenditures, and we do not know, nor do we control, the amount of our payments that are used by these organizations for political contributions.

 

 

        

 

  

 

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Our Board of Directors

Our Board is currently comprised of 12 members: Robert M. Bakish, Candace K. Beinecke, Barbara M. Byrne, Linda M. Griego, Robert N. Klieger, Judith A. McHale, Ronald L. Nelson, Charles E. Phillips, Jr., Shari E. Redstone, Susan Schuman, Nicole Seligman and Frederick O. Terrell.

MEETINGS OF THE BOARD

During 2022, the Board held 10 meetings, and each of our current directors attended at least 75% of the meetings of the Board and Board Committees on which such director served.

In addition to Board and Committee meetings, directors are expected to attend the Annual Meeting and all of the directors who stood for election in 2022 attended our 2022 Annual Meeting of Stockholders.

In accordance with the Guidelines and, with respect to the independent director sessions, the Nasdaq listing standards, the non-management directors meet separately without directors who are Company employees, and the independent directors meet separately without directors who are not independent as determined by the Board – in each case, at least two times each year and at such other times as they deem appropriate. The independent Chair of the Nominating and Governance Committee presides at meetings of the independent directors.

DIRECTOR INDEPENDENCE

Our Guidelines provide that a majority of our directors must be independent of the Company, as “independence” is defined in the Nasdaq listing standards and in the Guidelines. The Nasdaq listing standards set forth six “bright-line” tests that require a finding that a director is not independent if the director fails any of the tests. A Paramount director will not be independent if any of the following relationships exist:

 

 

The director is, or has been within the last three years, an employee of Paramount;

 

 

A family member of the director is, or has been within the last three years, an executive officer of Paramount;

 

 

The director has received, or a family member of the director has received, during any 12-month period within the last three years, more than $120,000 in compensation from Paramount, other than compensation for Board or Committee service, compensation paid to a family member of the director who is an employee (other than an executive officer) of Paramount, or benefits under a tax-qualified retirement plan, or non-discretionary compensation;

 

 

The director is, or has a family member who is, a current partner of our outside auditor, or was a partner or employee of our outside auditor who worked on Paramount’s audit at any time during any of the past three years;

 

 

The director is, or has a family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of Paramount have served on the compensation committee of such other entity; or

 

 

The director is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which Paramount made, or from which Paramount received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than payments arising solely from investments in Paramount’s securities or payments under non-discretionary charitable contribution matching programs.

For this purpose, “family member” means the director’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than domestic employees) who share such person’s home.

In addition, the Nasdaq listing standards provide that a director is not independent unless the Board affirmatively determines that the director has no relationship that would impair his or her independence, which we refer to as a “material relationship.” 

The Guidelines set forth categorical standards to assist the Board in determining what constitutes a “material relationship” with the Company. Generally, under these categorical standards, the following relationships are deemed not to be material:

 

 

The types of relationships identified by the Nasdaq listing standards’ “bright-line” tests, if they occurred more than five years ago (the Board will review any such relationship if it occurred more than three but fewer than five years ago);

 

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OUR BOARD OF DIRECTORS

 

 

A relationship whereby the director has received, or a family member of the director has received for service as an executive officer, $120,000 or less in direct compensation from us during any 12-month period within the last three years, absent other circumstances; and

 

 

A relationship where the director is an executive officer or employee, or an immediate family member of the director is an executive officer, of the following:

 

  (i)

a company that made payments to, or received payments from, us for property or services in an amount that, in each of the last three fiscal years, is less than 2% of such company’s annual consolidated gross revenues;

 

  (ii)

a company that is either indebted to us or a creditor of ours in an amount that is less than 2% of such company’s total consolidated assets; and

 

  (iii)

a tax-exempt organization that received contributions from us in the prior fiscal year in an amount less than the greater of $1,000,000 or 2% of that organization’s consolidated gross revenues.

For relationships that exceed the thresholds in (ii) and (iii) described above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, is made by the directors who are independent. In addition, the Guidelines state that, generally, the types of relationships not addressed by the Nasdaq listing standards or described in the Guidelines will not, by themselves, cause an otherwise independent director to be considered not independent. However, the Board may determine that a director is not independent for any reason it deems appropriate.

In March 2023, the Nominating and Governance Committee reviewed the independence of our 12 current directors, and of our director nominee who is not currently a member of our Board, to determine its recommendation regarding which of them meet the independence standards outlined above. The Board, based on its review and the recommendation of the Nominating and Governance Committee, determined that nine of our 12 current directors – Mses. Beinecke, Byrne, Griego, McHale, Schuman and Seligman and Messrs. Nelson, Phillips and Terrell – are independent. The current directors who were not determined to be independent are Ms. Redstone and Messrs. Bakish and Klieger. The Board also determined, based on its review and the recommendation of the Nominating and Governance Committee, that Ms. Ostroff, our director nominee who is not currently a Board member, is also independent.

During its review, in determining that the directors named above are independent, the Board considered that we have, in the ordinary course of business, during the past three years, sold products and services to, and/or purchased products and services from, companies and other entities, of which certain directors are executive officers, principals or employees, and made contributions to a tax-exempt organization of which a director’s immediate family member is an executive officer. The Board determined that all of these transactions were within the parameters for relationships deemed to be immaterial under the Guidelines.

BOARD LEADERSHIP STRUCTURE

Our Board of Directors is currently comprised of the following:

 

 

A non-executive Chair of the Board;

 

 

Our President and Chief Executive Officer; and

 

 

10 other directors, nine of whom are independent.

In addition to having a majority independent Board, the Audit, Compensation and Nominating and Governance Committees are composed entirely of independent directors. In support of the independent oversight of management, the non-management directors and, separately, the independent directors routinely hold executive sessions without management present, and Board members have regular access to management across the Company between meetings.

Our Non-Executive Chair of the Board, Shari E. Redstone, presides at all meetings of the Board. Under the Guidelines, her responsibilities also include, together with the Chief Executive Officer and the independent Chair of the Nominating and Governance Committee, developing and approving agendas for Board meetings. The Board believes that Ms. Redstone’s role appropriately reflects both her breadth of experience in the entertainment industry and her ownership position in and role at National Amusements.

 

 

        

 

  

 

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OUR BOARD OF DIRECTORS

 

BOARD RISK OVERSIGHT

 

 

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Board of Directors

Our Board of Directors has overall responsibility for the oversight of our risk management processes. The Board carries out its oversight responsibility directly and through the delegation to its Committees of responsibilities related to the oversight of certain risks.

                         
           

Committees of the Board

 

         
     
                                                               
                 
   

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Audit Committee

 

The Audit Committee is responsible for reviewing our processes and policies with respect to risk assessment, risk management and risk acceptance and receives reports from our Chief Audit Executive on the Company’s strategic risk management program. The Committee regularly discusses risks as they relate to its review of our financial statements, the evaluation of the effectiveness of internal control over financial reporting, compliance with legal and regulatory requirements, and the performance of the internal audit function, among other responsibilities set forth in the Committee’s charter. PricewaterhouseCoopers LLP (“PwC”), our independent auditor, attends Committee meetings and participates in these discussions. The Audit Committee receives regular reports:

 

•  from our Chief Financial Officer and the Chief Accounting Officer on the integrity of internal control over financial reporting;

 

•  from our Chief Technology Officer and our Chief Information Security Officer on our information security program and the management of cybersecurity risk;

 

           

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Compensation Committee

 

The Compensation Committee adopts and periodically assesses the Company’s compensation philosophy, strategy and principles, and monitors risks associated with the design and administration, of our performance-based and other compensation programs, to promote an environment that does not encourage unnecessary and excessive risk-taking by our employees. The Committee also reviews risks related to human capital resources, including pay equity, management succession planning (in conjunction with the Nominating and Governance Committee) and the depth of our senior management. ClearBridge Compensation Group LLC (“ClearBridge”), the Committee’s independent compensation consultant, attends Committee meetings and participates in these discussions.

           

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Nominating and

Governance Committee

 

The Nominating and Governance Committee is responsible for the review of the following risk management processes at the Company: business continuity planning, disaster recovery, crisis management, management succession planning (in conjunction with the Compensation Committee), significant issues impacting our culture and reputation and the Company’s handling of ESG matters. The Committee also oversees risk as it relates to monitoring developments in law and practice with respect to our corporate governance processes and in reviewing related person transactions.

   

 

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OUR BOARD OF DIRECTORS

 

 

•  from our Chief Audit Executive on internal audit activities and our internal audit plan for the upcoming fiscal year, the scope of which is to determine the adequacy and function of our risk management, control and governance processes;

 

•  from our General Counsel on employee investigations and our insurance program; and

 

•  from our Chief Compliance Officer on compliance activities.

 

             

 

For additional information on the Committees’ functions, see “Board Committees.”

Each of these Committees reports regularly to the Board on these risk-related matters, among other items within its purview.

On a regular basis, the Board engages in discussions (which include both internal and external experts) that assist the Board and management in preparing and implementing strategic initiatives. The Board receives regular reports from management that include matters affecting our risk profile, including operations reports from the Chief Executive Officer and from division heads, all of which include strategic and operational risks; reports from the Chief Financial Officer on financial results and projections, credit and liquidity risks and investor relations matters; and reports from the General Counsel on legal and regulatory risk and material litigation.

Outside of formal meetings, Board members have regular access to executives, including the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, the General Counsel and the Chief People Officer. The Committee and management reports and real-time management access collectively provide the Board with integrated insight on our management of risks.

INFORMATION SECURITY AND CYBERSECURITY

The Audit Committee has oversight of our processes and policies with respect to information security and cybersecurity and, as described above, receives regular reports from the Chief Technology Officer and Chief Information Security Officer. In 2022, the Board and management engaged in a simulated exercise designed to prepare for a potential cybersecurity incident. We also maintain a Cyber Liability insurance program. Additional information about our information security program and the management of cybersecurity risk is available in our ESG Report on our website at www.paramount.com/sustainability.

 

 

        

 

  

 

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OUR BOARD OF DIRECTORS

 

BOARD COMMITTEES

The following chart sets forth the current membership of each standing Board Committee. The Board reviews and determines the membership of the Committees at least annually.

 

Committee

   Members

Audit Committee

  

Barbara M. Byrne, Chair

Judith A. McHale

Ronald L. Nelson

Frederick O. Terrell

Compensation Committee

  

Judith A. McHale, Chair

Linda M. Griego

Ronald L. Nelson

Nominating and Governance Committee

  

Nicole Seligman, Chair

Candace K. Beinecke

Charles E. Phillips, Jr.

Susan Schuman

During 2022, the Audit Committee held nine meetings, the Compensation Committee held eight meetings and the Nominating and Governance Committee held six meetings. Information about these Committees, including their respective roles and responsibilities and charters, is set forth below.

Audit Committee

The Audit Committee Charter provides that the Audit Committee will be comprised of at least three members, except that the Committee is deemed to be properly constituted with at least two members in the event of a vacancy until the Board fills the vacancy. The Charter also provides that all of the members on the Committee must be independent directors. The Committee must have at least one “audit committee financial expert” and one member who is “financially sophisticated” (each as described below), and all Committee members must be able to read and understand fundamental financial statements. The Committee holds at least five regular meetings each year, and it meets separately throughout the year with the independent auditor, our Chief Financial Officer, our Chief Accounting Officer, our General Counsel, our Chief Compliance Officer and our Chief Audit Executive.

The Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee, as well as to retain outside advisors, in its sole discretion. The Committee has the sole authority to retain and terminate any such advisors and to review and approve such advisors’ fees and other retention terms.

The Committee is responsible for the following, among other things:

 

 

Reviewing our processes and policies with respect to risk assessment, risk management and risk acceptance;

 

 

The appointment, retention, termination, compensation and oversight of our independent auditor, including reviewing with the independent auditor and management the scope of the audit plan and audit fees;

 

 

Reviewing our financial statements and related disclosures, including with respect to internal control over financial reporting;

 

 

Oversight of our internal audit function;

 

 

Oversight of our process and policies with respect to information security and cybersecurity; and

 

 

Oversight of our compliance with legal and regulatory requirements.

For additional information on the Committee’s role and its oversight of the independent auditor during 2022, see “Report of the Audit Committee.”

Audit Committee Financial Experts. The Board has determined that each member of the Audit Committee who is also a director nominee, including Ms. Byrne, the Chair of the Audit Committee, is “financially sophisticated” under Nasdaq listing standards and qualifies as an “audit committee financial expert” as that term is defined in the regulations promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

 

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Compensation Committee

The Compensation Committee Charter provides that the Compensation Committee will be comprised of at least three members, except that the Committee is deemed to be properly constituted with at least two members in the event of a vacancy until the Board fills the vacancy. The Charter also provides that all of the members on the Committee must be independent directors and also “non-employee directors” pursuant to Rule 16b-3 of the Securities Exchange Act of 1934 (the “Exchange Act”). The Committee holds at least four regular meetings each year, and it regularly meets separately at these meetings with its independent compensation consultant and our Chief People Officer.

The Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee, as well as to retain a compensation consultant and other outside advisors, as it deems appropriate and in accordance with applicable laws and regulations. The Committee has the sole authority to retain and terminate any such advisors and to review and approve such advisors’ fees and other retention terms.

The Committee is responsible for the following, among other things:

 

 

Adopting and periodically reviewing our compensation philosophy, strategy and principles regarding the design and administration of our compensation programs;

 

 

Reviewing and approving the total compensation packages and the material terms of any new employment, consulting, supplemental retirement and severance arrangements for our executive officers and other senior executives identified by the Committee at least annually after consultation with members of management (collectively, the “specified employees”);

 

 

Overseeing the administration of our incentive compensation plans and equity-based compensation plans;

 

 

Reviewing key management succession planning (in conjunction with the Nominating and Governance Committee) as contemplated by the Guidelines; and

 

 

Overseeing periodic risk assessments of our compensation programs.

Consideration and Determination of Executive Compensation. The Compensation Committee reviews all components of the specified employees’ compensation, including base salary, annual and long-term incentives and other compensatory arrangements. In approving compensation for the specified employees, the Committee considers the input and recommendations of the Chief Executive Officer, the Chief People Officer and any other executive officers to whom those executives report. As described below, the Compensation Committee also considers the input from its independent compensation consultant in making decisions on compensation matters.

The Committee reviews and approves goals and objectives relevant to the compensation of the President and Chief Executive Officer and, together with the Nominating and Governance Committee, annually evaluates his performance in light of those goals and objectives, after considering the input of the non-management directors. The results of this evaluation are then reported to the non-management directors. The Compensation Committee sets the compensation of our President and Chief Executive Officer, taking this evaluation into account, and reports to the Board on this process.

As authorized by its Charter, the Committee has delegated to the President and Chief Executive Officer limited authority to grant long-term incentive awards under our long-term incentive plan to executives who are not specified employees, in connection with their hiring, promotion or contract renewal and to modify certain terms of outstanding equity grants in some post-termination scenarios, as discussed in the “Compensation Discussion and Analysis” section. Any use of this delegated authority is reported to the Committee at its next regularly-scheduled meeting.

Our processes and procedures for the consideration of executive compensation and the role of our executive officers in determining or recommending the amount or form of executive compensation are more fully described in the “Compensation Discussion and Analysis” section.

The Committee currently retains independent compensation consulting firm ClearBridge Compensation Group LLC to provide expert compensation advice to the Committee in its review of senior executive and other employee compensation. The Committee has the sole authority to retain and terminate the independent compensation consultant and to review and approve the firm’s fees and other retention terms. The Committee maintains a policy requiring that its independent compensation consultant not provide services to the Company other than (i) its services to the Committee and (ii) its services to the Company with respect to the evaluation of non-employee director compensation. ClearBridge did not provide any other services to the Company in 2022. In furtherance of the Committee’s review of senior executive compensation, the independent consultant examines the compensation practices at companies with which we compete

 

 

        

 

  

 

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for senior executive talent, including those companies engaged in similar business activities and other publicly-traded U.S. companies, and provides other analysis, as more fully described in the “Compensation Discussion and Analysis” section. In March 2023, the Compensation Committee assessed the independence of ClearBridge and determined that the firm’s work for the Committee did not raise any conflicts of interest.

Nominating and Governance Committee

The Nominating and Governance Committee’s Charter provides that the Nominating and Governance Committee will be comprised of at least three members, except that the Committee is deemed to be properly constituted with at least two members in the event of a vacancy until the Board fills the vacancy. The Charter also provides that all of the members on the Committee must be independent directors. The Committee holds at least three regular meetings each year.

The Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee, as well as to retain outside advisors, in its sole discretion. The Committee has the sole authority to retain and terminate any such advisors and to review and approve such advisors’ fees and other retention terms.

The Committee is responsible for the following, among other things:

 

 

Identifying and recommending to the Board nominees for election to the Board and reviewing the composition of the Board as part of this process;

 

 

Overseeing all aspects of our corporate governance initiatives, including regular assessments of our principal governance documents;

 

 

Establishing criteria and processes for the annual self-evaluations of the Board and its Committees;

 

 

Making recommendations to the Board on director compensation matters;

 

 

Monitoring developments in the law and practice of corporate governance;

 

 

Developing and recommending items for Board meeting agendas;

 

 

Reviewing key management succession planning (in conjunction with the Compensation Committee) as contemplated by the Guidelines;

 

 

Reviewing transactions between us and related persons;

 

 

Overseeing and monitoring significant issues impacting our culture and reputation, as well as our handling of ESG matters; and

 

 

Reviewing the following risk management processes and policies at the Company: business continuity planning, disaster recovery and crisis management.

Consideration and Determination of Director Compensation. The Committee annually reviews and recommends for the Board’s consideration the form and amount of compensation for “Outside Directors,” who are directors who are not employees of us or any of our subsidiaries. Only Outside Directors are eligible to receive compensation for serving on the Board, as more fully described in “Director Compensation.”

In accordance with the Guidelines and its Charter, the Committee is guided by three principles in its review of Outside Director compensation: Outside Directors should be fairly compensated for the services they provide to us, taking into account, among other things, the size and complexity of our business and compensation paid to directors of comparable companies; Outside Directors’ interests should be aligned with the interests of stockholders; and Outside Directors’ compensation should be easy for stockholders to understand. Final director compensation determinations are made by the Board.

2023 Director Nomination Process. In connection with the 2023 director nomination process, the Nominating and Governance Committee reviewed the current composition of the Board in light of the considerations set forth in its Charter and our Guidelines related to Board composition. In addition, the Committee considered input received from the Board members on Board composition, the directors’ qualifications and any special circumstances that the Committee deemed to be important in its determination. After taking these considerations into account, the Committee determined to recommend to the Board that each of the director nominees set forth in “Item 1 — Election of Directors” be nominated to stand for election at the 2023 Annual Meeting.

 

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Board Diversity. The Committee considers diversity as part of its review of the composition of the Board. The Committee considers diversity to be a broadly defined concept that takes into account professional experience, gender and ethnicity, among other characteristics. Multiple industries and areas of expertise are represented on the Board, including entertainment and media, banking, legal, technology, information security and management consulting. Additionally, distinguished contributors to governmental and not-for-profit organizations also serve on the Board. Multiple professions are represented among the directors, including current and past experience as principal executive officers, principal financial officers, attorneys, high-ranking government officials, entrepreneurs and television and film executives. The Committee assesses the effectiveness of its consideration of diversity as part of its annual nomination process when it reviews the composition of the Board as a whole.

The following table sets forth certain diversity statistics relating to our current Board members, as required by Nasdaq listing standards:

 

Board Diversity Matrix (As of March 17, 2023)

Total Number of Directors

       12           
      Female    Male    Non-Binary    Did Not Disclose
Gender

Part I: Gender Identity

 

Directors

       7        5        0        0

Part II: Demographic Background

 

African American or Black

       0        2        0        0

Alaskan Native or Native American

       0        0        0        0

Asian

       0        0        0        0

Hispanic or Latinx

       1        0        0        0

Native Hawaiian or Pacific Islander

       0        0        0        0

White

       6        3        0        0

Two or More Races or Ethnicities

       0        0        0        0

LGBTQ+

       1        1        0        0

Did Not Disclose Demographic Background

       0        0        0        0

Stockholder Recommendations for Director. The Committee will consider candidates for director recommended by our stockholders. All recommendations by stockholders for potential director candidates must include written materials with respect to the potential candidate and be sent to Christa A. D’Alimonte, Executive Vice President, General Counsel and Secretary, Paramount Global, 1515 Broadway, New York, NY 10036. Our Guidelines and Nominating and Governance Committee Charter set forth certain criteria for director qualifications and Board composition that stockholders should consider when making a recommendation. These criteria include an expectation that directors have substantial accomplishments in their professional backgrounds, are able to make independent, analytical inquiries, and exhibit practical wisdom and mature judgment. Our directors should also possess the highest personal and professional ethics, integrity and values and be committed to promoting the long-term interests of our stockholders. Director candidates recommended by stockholders who meet the director qualifications, which are described more fully in our Guidelines and Nominating and Governance Committee Charter, will be considered by the Chair of the Committee, who will present the information on the candidate to the entire Committee. Director candidates recommended by stockholders will be considered by the Committee in the same manner as any other candidate.

STOCKHOLDER OUTREACH

Our management, including through its investor relations team, conducts stockholder outreach throughout the year to inform our management and Board about the issues that matter most to stockholders. The stockholder outreach efforts include in-person and virtual meetings between management and individual and group investors and management presentations at investor and industry conferences, including question-and-answer sessions, on a regular basis. Our investor relations group also responds to retail investor email and telephone inquiries, providing access to our representatives and a forum for providing feedback. The investor relations team, certain NEOs and/or other members of management and operating executives meet with our largest investors throughout the year, and management reports to the Board regularly on stockholder engagement efforts.

 

 

        

 

  

 

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COMMUNICATIONS WITH DIRECTORS

Stockholders and other parties interested in contacting our non-management directors may send an email to nonmanagementdirectors@paramount.com or write to Paramount Global, 1515 Broadway, New York, NY 10036, Attention: Non-Management Directors – 52nd Floor. The non-management directors’ contact information is also available on the “Investors—Shareholder Services, Alerts, & FAQs” page of our website at ir.paramount.com. The non-management directors have approved the process for handling communications received in this manner.

Stockholders should also use the email and mailing address for the non-management directors to send communications to the Board. The process for handling stockholder communications to the Board received in this manner has been approved by the independent directors of the Board. Correspondence relating to accounting or auditing matters will be handled in accordance with procedures established by the Audit Committee for such matters.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Compensation Committee during fiscal year 2022 was, or has ever been, an officer or employee of the Company, and, during fiscal year 2022, no executive officer of the Company served on the board and/or compensation committee of any company that employed as an executive officer any member of our Board and/or Compensation Committee.

 

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Security Ownership of Certain Beneficial Owners and Management

The table below sets forth as of February 1, 2023 information concerning the beneficial ownership of our Class A and Class B Common Stock by (i) each current director and director nominee, (ii) each NEO and (iii) our current directors and executive officers as a group. Each person has sole voting and investment power over the shares reported, except as noted. Also set forth below is information concerning the beneficial ownership by each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our Class A Common Stock. As of February 1, 2023, there were 40,704,595 shares of our Class A Common Stock outstanding and 609,810,905 shares of our Class B Common Stock outstanding.

 

 

 

   Beneficial Ownership of Equity Securities

Name

   Title of Security    Number of Shares  

Percent     

of Class     

Robert M. Bakish

       Class A Common        0   0
 

 

       Class B Common        1,972,556 (1)(2)(3)(4)    *

Candace K. Beinecke

       Class A Common        10,170 (5)    *
 

 

       Class B Common        31,683 (1)(5)    *

Barbara M. Byrne

       Class A Common        0   0
 

 

       Class B Common        30,890 (1)(4)    *

Naveen Chopra

       Class A Common        0   0
 

 

       Class B Common        95,507 (1)    *

Christa A. D’Alimonte

       Class A Common        0   0
 

 

       Class B Common        170,744 (1)    *

Linda M. Griego

       Class A Common        0   0
 

 

       Class B Common        51,030 (1)(5)    *

Robert N. Klieger

       Class A Common        8,159 (5)    *
 

 

       Class B Common        33,679 (1)(5)    *

Doretha (DeDe) Lea

       Class A Common        0   0
 

 

       Class B Common        113,086 (1)(2)(3)    *

Judith A. McHale

       Class A Common        2,895 (5)    *
 

 

       Class B Common        32,568 (1)(5)    *

Ronald L. Nelson

       Class A Common        0   0
 

 

       Class B Common        38,443 (1)(5)    *

Dawn Ostroff

       Class A Common        0   0
 

 

       Class B Common        0   0

Charles E. Phillips, Jr.

       Class A Common        2,633 (5)    *
 

 

       Class B Common        89,023 (1)(5)    *

Nancy Phillips

       Class A Common        0   0
 

 

       Class B Common        43,138 (1)    *

Shari E. Redstone(6)

       Class A Common        37,365 (5)    *
 

 

       Class B Common        471,603 (1)(4)(5)    *

Susan Schuman

       Class A Common        0   0
 

 

       Class B Common        20,548 (1)(5)    *

Nicole Seligman

       Class A Common        0   0
 

 

       Class B Common        30,519 (1)(4)(5)    *

Frederick O. Terrell

       Class A Common        5,578 (5)    *
 

 

       Class B Common        25,788 (1)(5)    *

 

 

        

 

  

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

 

 

   Beneficial Ownership of Equity Securities

Name

   Title of Security    Number of Shares  

Percent     

of Class     

Current directors and executive officers as a
group (18 persons)

       Class A Common        66,800 (5)        *
       Class B Common        3,365,444 (1)(2)(3)(4)(5)        *

National Amusements(7)

 

846 University Avenue
Norwood, MA 02062

      

 

Class A Common

 

Class B Common

 

      

 

31,500,087

 

32,012,190

 

     

 

77.4

 

5.2

%

 

%

Mario J. Gabelli et al.(8)

       Class A Common        3,997,551       9.8 %

GAMCO Investors, Inc.

One Corporate Center

Rye, NY 10580-1435

      

 

 

 

 

 

      

 

 

 

 

 

     

 

 

 

 

 

*

Represents less than 1% of the outstanding shares of the class.

 

(1)

Includes the following shares of Class B Common Stock that the indicated person had the right to acquire on or within 60 days from February 1, 2023, (a) through the exercise of stock options: Bakish, 1,229,036; D’Alimonte, 92,619; Lea, 65,795; and our current executive officers as a group, 1,446,346; and (b) underlying Restricted Stock Unit (“RSU”) awards that are expected to vest within 60 days from February 1, 2023: Bakish, 61,996; Beinecke, 5,558; Byrne, 5,558; Chopra, 15,112; D’Alimonte, 13,601; Griego, 5,558; Klieger, 5,558; Lea, 3,778; McHale, 5,558; Nelson, 5,558; C. Phillips, 5,558; N. Phillips, 6,045; Redstone, 5,558; Schuman, 5,558; Seligman, 5,558; Terrell, 5,558; and our current directors and executive officers as a group, 166,052.

 

(2)

Includes the following shares held through our 401(k) plan as of February 1, 2023: Bakish, 3,026; Lea, 801; and our current directors and executive officers as a group, 4,391.

 

(3)

Includes the following Class B Common Stock phantom units credited pursuant to, as applicable, our supplemental 401(k) plans or bonus deferral plans as of February 1, 2023: Bakish, 42,510; Lea, 777; and our current directors and executive officers as a group, 43,459. Pursuant to the governing plans, the phantom common stock units are payable in cash following termination of service as an employee.

 

(4)

Includes the following number of shares of Class B Common Stock (a) owned by family members: Bakish, 167; and our current directors and executive officers as a group, 167; and (b) held in family trusts, as to which the indicated person has sole voting and investment power: Byrne, 1,384; Redstone, 44,948; Seligman, 798; and our current directors and executive officers as a group, 47,130.

 

(5)

Includes (a) the following Class A Common Stock phantom units and Class B Common Stock phantom units credited pursuant to the Director Deferred Compensation Plans (as defined below): Beinecke, 10,170 Class A and 11,135 Class B; Klieger, 8,159 Class A and 8,912 Class B; McHale, 2,895 Class A and 3,343 Class B; C. Phillips, 2,633 Class A and 2,958 Class B; Redstone, 37,365 Class A and 39,929 Class B; Terrell, 5,578 Class A and 6,136 Class B; and our current directors and executive officers as a group, 66,800 Class A and 72,413 Class B; and (b) the following shares of Class B Common Stock underlying vested RSUs for which settlement has been deferred: Beinecke, 14,990; Griego, 35,597; Klieger, 19,209; McHale, 9,965; Nelson, 6,502; C. Phillips, 62,039; Redstone, 151,805; Schuman, 14,990; Seligman, 20,663; Terrell, 14,094; and our current directors and executive officers as a group, 349,854. Pursuant to the governing plans, the phantom common stock units are payable in cash and the RSUs are payable in shares of Class B Common Stock following termination of service as a director.

 

(6)

Ms. Redstone is a stockholder of National Amusements and has a minority indirect beneficial interest in the Company’s Class A Common Stock and Class B Common Stock owned by National Amusements (and a wholly-owned subsidiary).

 

(7)

These shares are owned by National Amusements and a wholly-owned subsidiary. National Amusements is controlled by the Sumner M. Redstone National Amusements Part B General Trust (the “General Trust”), which owns 80% of the voting interest of National Amusements and acts by majority vote of seven voting trustees (subject to certain exceptions), including with respect to the National Amusements shares held by the General Trust. Ms. Redstone is one of the seven voting trustees for the General Trust and is one of two voting trustees who are beneficiaries of the General Trust. No member of our management or other member of our Board of Directors is a trustee of the General Trust.

 

  

Based on information received from National Amusements, National Amusements has pledged to its lenders a portion of shares of our Class A Common Stock and Class B Common Stock owned directly or indirectly by National Amusements. As of February 1, 2023, the aggregate number of shares pledged by National Amusements to its lenders represented approximately 4.5% of the total outstanding shares of our Class A Common Stock and Class B Common Stock on a combined basis. In addition, as of February 1, 2023, the amount of our Class A Common Stock that National Amusements directly or indirectly owned and that was not pledged by National Amusements to its lenders represented approximately 57.6% of the total outstanding shares of our Class A Common Stock.

 

(8)

The information concerning Mario J. Gabelli et al. is based upon a Schedule 13D/A filed with the SEC on September 16, 2022. In addition to Mr. Gabelli, each of the following entities that Mr. Gabelli directly or indirectly controls, or for which he acts as chief investment officer, is a reporting person, with the following beneficial ownership of the reported shares as of September 15, 2022,

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

  on the Schedule 13D/A: Gabelli Funds, LLC (“Gabelli Funds”), 1,819,551; GAMCO Asset Management, Inc. (“GAMCO”), 1,976,460; Gabelli & Company Investment Advisers, Inc., 10,000; Gabelli Foundation, Inc. (“Gabelli Foundation”), 36,000; MJG Associates, Inc., 81,500; GGCP, Inc. (“GGCP”), 35,000; GAMCO Investors, Inc. (“GBL”), 0; and Associated Capital Group, Inc. (“AC”), 28,000. Mr. Gabelli is deemed to beneficially own 11,000 shares as well as the shares owned beneficially by each of the foregoing reporting persons. AC, GBL and GGCP are deemed to beneficially own the shares owned beneficially by each of the foregoing reporting persons other than Mr. Gabelli and the Gabelli Foundation. Each of the reporting persons discloses that it has sole voting and investment power with respect to the shares it beneficially owns, except that: (a) GAMCO does not have the authority to vote 87,612 of the reported shares, (b) Gabelli Funds has sole dispositive and voting power with respect to the shares held by the Funds so long as the aggregate voting interest of all joint filers does not exceed 25% of their total voting interest in the Company and, in that event, the proxy voting committee of each Fund shall respectively vote that Fund’s shares, (c) at any time, the proxy voting committee of each such Fund may take and exercise in its sole discretion the entire voting power with respect to the shares held by such fund under special circumstances such as regulatory considerations, and (d) the power of Mr. Gabelli, AC, GBL and GGCP is indirect with respect to shares beneficially owned directly by other reporting persons.

 

 

        

 

  

 

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Related Person Transactions

REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS

The Board has a written policy whereby the Nominating and Governance Committee reviews and approves, ratifies or takes other actions it deems appropriate with respect to related person transactions, as defined under the rules of the SEC. Under the policy, the Committee shall approve only related person transactions that are in, or are not inconsistent with, the best interests of the Company and its stockholders, as the Committee determines in good faith. In its review, the Committee considers the importance of the transaction to the Company and the related person; the related person’s relationship with the Company and interest in the transaction; the terms of the transaction, including the dollar amount involved; the impact on a director’s independence if the transaction involves a director; the availability of other sources of comparable products or services; whether the transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally; and any other information the Committee deems appropriate.

Any member of the Committee who is a related person with respect to a transaction under review may not participate in the review or vote respecting the transaction; however, that person may be counted in determining the presence of a quorum at a meeting of the Committee that considers the transaction.

Under the policy, management is primarily responsible for determining whether a related person has a direct or indirect material interest in a transaction with the Company. The determination will be made after a review of information obtained from the related person and information available from our records. Our legal and controller’s groups are responsible for establishing and maintaining policies and procedures to ensure implementation of the policy across the Company.

TRANSACTIONS WITH NATIONAL AMUSEMENTS

National Amusements licenses films in the ordinary course of business for its motion picture theaters from all major studios, including Paramount Pictures. Payments made to us in connection with these licenses for fiscal year 2022 amounted to approximately $14,309,000 and are continuing in fiscal year 2023 as a result of this ongoing relationship. National Amusements also licenses films from a number of unaffiliated companies, and Paramount Pictures expects to continue to license films to National Amusements on similar terms in the future. In addition, National Amusements and Paramount Pictures have had co-op advertising arrangements and occasionally engage in other ordinary course transactions (e.g., movie ticket purchases and various promotional activities) from time to time; Paramount Pictures paid National Amusements approximately $243,000 in connection with these arrangements in fiscal year 2022. We believe that the terms of these transactions between National Amusements and Paramount Pictures were no more or less favorable to Paramount Pictures than transactions between unaffiliated companies and National Amusements.

OTHER TRANSACTIONS

In November 1995, we entered into an agreement with GAMCO pursuant to which GAMCO manages certain assets for qualified U.S. pension plans sponsored by us. For 2022, we paid GAMCO approximately $228,000 for such investment management services. We believe that the terms of the agreement with GAMCO are no more or less favorable to us than we could have obtained from unrelated parties. Entities that are affiliated with GAMCO collectively own 3,997,551 shares of our Class A Common Stock, according to a Schedule 13D/A filed with the SEC on September 16, 2022 by such entities (the latest filing available), which shares, as of March 13, 2023, represented approximately 9.8% of the outstanding shares of the class.

Matthew Jafar, the brother-in-law of Julia Phelps, our Executive Vice President, Chief Communications and Corporate Marketing Officer, is employed by us as Senior Director, Corporate Insights. Mr. Jafar served in his position prior to Ms. Phelps’ appointment to her current role, and Ms. Phelps was not involved in Mr. Jafar’s hiring. Mr. Jafar has never served in Ms. Phelps’ reporting line, and Ms. Phelps is not involved with decisions regarding Mr. Jafar’s compensation. Mr. Jafar received compensation in 2022 in an amount consistent with the compensation paid to other employees at his level.

 

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Item 1 — Election of Directors

The Board of Directors proposes the election of 11 directors, 10 of whom are current members of our Board. Each director elected at the Annual Meeting will hold office, in accordance with our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, until the next annual meeting or until his or her successor is duly elected and qualified. The Board’s nominees for election are Robert M. Bakish, Barbara M. Byrne, Linda M. Griego, Robert N. Klieger, Judith A. McHale, Dawn Ostroff, Charles E. Phillips, Jr., Shari E. Redstone, Susan Schuman, Nicole Seligman and Frederick O. Terrell. All of the nominees except Ms. Ostroff were elected at our 2022 Annual Meeting of Stockholders. Ms. Ostroff is not currently a member of the Board.

For a description of certain arrangements relating to nominations of directors and the composition of the Board, see “Our Board of Directors — Board Committees — Nominating and Governance Committee.”

If, for any reason, any of the director nominees becomes unavailable for election, the proxy holders may exercise discretion to vote for substitute nominees proposed by the Board. Each of the director nominees has indicated that he or she will be able to serve if elected and has agreed to do so.

Each director nominee for our Board brings a diversity of skills and experiences to his or her service on the Board, as described below.

 

LOGO

 

 

 

LOGO

 

President and Chief Executive Officer, Director

 

Age: 59

 

Director since: 2019

 

Committees:

•  None

 

  

ROBERT M. BAKISH

 

Robert M. Bakish has been our President and Chief Executive Officer and a member of our Board since December 2019. Mr. Bakish served as President and Chief Executive Officer and a member of the board of Viacom Inc. (“Viacom”) from December 2016 to December 2019, having served as Acting President and Chief Executive Officer beginning earlier in 2016. Mr. Bakish joined Viacom’s predecessor in 1997 and held positions throughout the organization, including as President and Chief Executive Officer of Viacom International Media Networks and its predecessor company, MTV Networks International, from 2007 to 2016; Executive Vice President, Operations and Viacom Enterprises; Executive Vice President and Chief Operating Officer, MTV Networks Advertising Sales; and Senior Vice President, Planning, Development and Technology. Before joining Viacom’s predecessor, Mr. Bakish was a partner with Booz Allen Hamilton in its Media and Entertainment practice. Mr. Bakish has served as a director of Avid Technology, Inc. since 2009.

 

Mr. Bakish has extensive knowledge and a deep understanding of our business and the entertainment industry as our current President and Chief Executive Officer and through various leadership positions at Viacom spanning approximately 20 years, and has broad expertise overseeing global operations.

 

 

        

 

  

 

2023 PROXY STATEMENT        25  

 


Table of Contents

ITEM 1 — ELECTION OF DIRECTORS

 

 

LOGO

 

Director

 

Age: 68

 

Director since: 2018

 

Committees:

•  Audit Committee (Chair)

 

  

BARBARA M. BYRNE

 

Ms. Byrne is the former Vice Chairman, Investment Banking at Barclays PLC. Ms. Byrne has served as a director of LanzaTech NZ, Inc. since 2023 and of Carta, Inc. and PowerSchool Holdings, Inc. since 2021. Ms. Byrne previously served as a director of Hennessy Capital Investment Corp. V and Slam Corp. Ms. Byrne also serves as a Lifetime Member of the Council of Foreign Relations, a Trustee of the Institute of International Education, a member of the Investment Committee of Catalyst and a member of the Audit Committee Leadership Network.

 

During her more than 35 years of financial services experience, Ms. Byrne served as team leader for some of Barclays’ most important multinational corporate clients and was the primary architect of several of Barclays’ marquee transactions. Widely recognized as a leading investment banker and strategic advisor, she is a member of various industry councils and participates as a forum leader on strategic issues and trends facing the financial services sector and global markets. Ms. Byrne has also gained deep experience in audit committee effectiveness and leadership, expertise in risk oversight, and thought leadership in finance through her participation on the boards and investment committees of various non-profit organizations. With this experience, Ms. Byrne brings to the Board important business and financial expertise in its deliberations on complex transactions, risk management, strategy and other financial matters.

    

    

 

 

LOGO

 

Director

 

Age: 75

 

Director since: 2007

 

Committees:

•  Compensation Committee

 

  

LINDA M. GRIEGO

 

Ms. Griego has served, since 1986, as President and Chief Executive Officer of Griego Enterprises, Inc., a business management company. For more than 20 years, she oversaw the operations of Engine Co. No. 28, a prominent restaurant in downtown Los Angeles that she founded in 1988. From 1990 to 2000, Ms. Griego held a number of government-related appointments, including Deputy Mayor of the City of Los Angeles, President and Chief Executive Officer of the Los Angeles Community Development Bank, and President and Chief Executive Officer of Rebuild LA, the agency created to jump-start inner-city economic development following the 1992 Los Angeles riots. She serves on the LA County Economic & Resiliency Task Force charged with economic recovery efforts related to the COVID-19 pandemic. Over the past two decades, she has also served on a number of government commissions and boards of directors of nonprofit organizations, including current service on the boards of the MLK Health and Wellness Community Development Corporation and the National Trust for Historic Preservation. Ms. Griego served as a director of the American Funds (9 boards) from 2012 to 2022 and served as a director of AECOM from 2005 to 2019.

 

With the breadth of her leadership experience as a businesswoman, in the public sector through her multiple government appointments and extensive community-based participation in Los Angeles, an area where we have a significant presence, and on multiple not-for-profit boards, Ms. Griego provides the Board with financial and business acumen, as well as public policy expertise as it relates to business practices. Ms. Griego is also an experienced director, including through service on other audit, compensation and organization, and nominating and governance committees, with demonstrated expertise in the application of sound corporate governance principles.

    
    
    
    
    
    
    

 

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ITEM 1 — ELECTION OF DIRECTORS

 

 

LOGO

 

Director

 

Age: 51

 

Director since: 2017

 

Committees:

•  None

 

  

ROBERT N. KLIEGER

 

Mr. Klieger is a partner in the Los Angeles law firm Hueston Hennigan LLP. Mr. Klieger’s practice focuses on complex civil litigation and counseling in the areas of entertainment and intellectual property. Mr. Klieger represents motion picture studios, broadcast and cable television networks, production companies, video game publishers and high net worth individuals in the media and entertainment space, as well as clients in other industries including apparel, aviation and venture capital. Prior to joining Hueston Hennigan, Mr. Klieger was a partner at Irell & Manella LLP and a founding partner at Kendall Brill & Klieger LLP. Before beginning his career in private practice, Mr. Klieger served as a law clerk to the Honorable Cynthia Holcomb Hall of the United States Court of Appeals for the Ninth Circuit, and the Honorable William Matthew Byrne, Jr. of the United States District Court for the Central District of California.

 

Mr. Klieger is recognized as one of the most prominent attorneys in the entertainment industry, with a practice focused on complex civil litigation and counseling in the areas of media, entertainment and intellectual property and clients that include leading enterprises in television, film and digital media. With his exceptional legal acumen and distinguished reputation for his trial practice and counsel, Mr. Klieger brings to the Board legal and strategic expertise in matters germane to our businesses and complex business transactions.

    

    

 

 

LOGO

 

Director

 

Age: 76

 

Director since: 2019

 

Committees:

•  Audit Committee

•  Compensation Committee, Chair

 

  

JUDITH A. MCHALE

 

Ms. McHale is President and Chief Executive Officer of Cane Investments, LLC, a private investment company, and served as a member of the board of Viacom from August 2016 to December 2019. Prior to joining Cane Investments in 2011, Ms. McHale served as the Under Secretary of State for Public Diplomacy and Public Affairs for the U.S. Department of State from 2009 to 2011. From 2004 to 2006, Ms. McHale served as the President and Chief Executive Officer of Discovery Communications, Inc., the parent company of Discovery Channel, and served as its President and Chief Operating Officer from 1995 to 2004. In 2006, Ms. McHale worked with private equity firm Global Environment Fund to launch the GEF/Africa Growth Fund, an investment vehicle focused on supplying expansion capital to small and medium-sized enterprises that provide consumer goods and services in emerging African markets. She has served on the board of Hilton Worldwide Holdings Inc. since 2013. She previously served on the boards of Ralph Lauren Corporation, SeaWorld Entertainment, Inc., Host Hotel & Resorts, Inc., DigitalGlobe Inc., John Hancock Financial Services, Inc. and Potomac Electric Power Company.

 

Ms. McHale has extensive experience leading a major media conglomerate with a background in operations and financial management, expertise in global affairs, experience in government affairs and extensive public company and corporate governance experience.

 

 

        

 

  

 

2023 PROXY STATEMENT        27  

 


Table of Contents

ITEM 1 — ELECTION OF DIRECTORS

 

 

LOGO

 

Director Nominee

 

Age: 62

 

Director since: N/A

 

Committees: N/A

 

  

DAWN OSTROFF

 

Ms. Ostroff served as Chief Content and Advertising Business Officer at Spotify from 2018 to 2023. Prior to joining Spotify, Ms. Ostroff co-founded Condé Nast Entertainment (“CNE”) and served as its President from 2011 to 2018. Prior to joining CNE, Ms. Ostroff was President of Entertainment for The CW broadcast network and President of United Paramount Network, a former subsidiary of Paramount. Ms. Ostroff has served on the board of directors of Activision Blizzard, Inc. since 2020. She also serves on the board of trustees of The Paley Center for Media and the Board of Overseers of the New York University College of Arts & Science. She previously served on the boards of directors of Anonymous Content, LLC and Westfield Corporation.

 

Ms. Ostroff has extensive expertise in the media and entertainment industry, having led an international media services provider, founded a studio and distribution network, and developed entertainment content across film, television, premium digital video, social and virtual reality. Ms. Ostroff also has extensive content streaming and advertising experience, having led music and talk content and distribution operations, overseen advertising divisions at a public company and driven worldwide brand and marketing partnerships.

 

 

LOGO

 

Director

 

Age: 63

 

Director since: 2019

 

Committees:

•  Nominating and Governance Committee

 

  

CHARLES E. PHILLIPS, JR.

 

Mr. Phillips is a Co-founder and Managing Partner of Recognize, a technology investing and transformation company. Previously, he was Chief Executive Officer of Infor, Inc., a multi-billion dollar enterprise software company, from 2010 until 2019 and Chairman of Infor from 2019 until 2020. Mr. Phillips served on the board of Viacom from January 2006 to December 2019 and, prior to that, on the board of Viacom’s predecessor beginning in 2004. He was a President of Oracle Corporation from 2003 to 2010 and served as a member of its board of directors and executive management committee from 2004 to 2010. Prior to Oracle, Mr. Phillips was a managing director at Morgan Stanley in the Technology Group and served on its board of directors. He has served as a director of American Express Company and Compass, Inc. since 2020, and serves on the boards of the Apollo Theater, the New York City Police Foundation and the Black Economic Alliance. He previously served on the board of Oscar Health, Inc. He served on President Obama’s Economic Recovery Board, led by Paul Volcker, and is a member of the Council on Foreign Relations.

 

Mr. Phillips has extensive experience as a senior executive in a large, multinational corporation, financial industry background and financial and analytical expertise, significant public company and corporate governance experience, expertise in technology issues and familiarity with issues facing media, new media and intellectual property-driven companies and a deep knowledge of our business.

 

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ITEM 1 — ELECTION OF DIRECTORS

 

 

LOGO

 

Non-Executive Chair

 

Age: 68

 

Director since: 1994

 

Committees:

•  None

 

  

SHARI E. REDSTONE

 

Ms. Redstone has been a member of our Board since January 1994 and served on the Viacom board from January 2006 to December 2019. She has served as Non-Executive Chair of our Board since December 2019 and prior to that served as Non-Executive Vice Chair of the Board beginning in June 2005 and Non-Executive Vice Chair of the Viacom board beginning in January 2006.

 

Ms. Redstone is Co-Founder and Managing Partner of Advancit Capital, an investment firm launched in 2011 that focuses on early stage companies at the intersection of media, entertainment and technology, with investments in over 75 companies. Ms. Redstone has been President of National Amusements since 2000 and Chief Executive Officer since 2020. She also serves on the National Amusements board as its Chairperson. Ms. Redstone serves on the Board of Trustees for the Paley Center for Media and is actively involved in charitable, civic and educational organizations. She is a member of the Board of Trustees of the Dana Farber Cancer Institute. She earned a BS from Tufts University, and a JD and a Masters in Tax Law from Boston University. She practiced corporate law, estate planning and criminal law in the Boston area before joining National Amusements.

 

Ms. Redstone brings to our Board her extensive experience in and understanding of the entertainment industry, broad experience and talent managing a large business, extensive legal experience and her experience as President of National Amusements, including as one of its significant stockholders.

    
    
    

 

 

LOGO

 

Director

 

Age: 63

 

Director since: 2018

 

Committees:

•  Nominating and Governance Committee

 

  

SUSAN SCHUMAN

 

Ms. Schuman is the Executive Chair and Co-Founder of SYPartners LLC, a consultancy firm that partners with chief executive officers and their leadership teams undergoing business and cultural transformation, and Vice Chair of the kyu Collective. Ms. Schuman serves on the board of Wheels Up Partners LLC and previously served on the advisory board of IDEO.

 

Over the past 20 years, Ms. Schuman has built and led SYPartners, working with executives at many high-profile companies and organizations. This experience in advising on business, organization and cultural transformation, including new value creation strategies, positions Ms. Schuman as a skilled advisor to the Board on the strategic and transformational direction of the Company. Ms. Schuman’s service on other public company board committees contributes to her broad understanding of public company governance.

 

 

        

 

  

 

2023 PROXY STATEMENT        29  

 


Table of Contents

ITEM 1 — ELECTION OF DIRECTORS

 

 

LOGO

 

Director

 

Age: 66

 

Director since: 2019

 

Committees:

•  Nominating and Governance Committee (Chair)

 

  

NICOLE SELIGMAN

 

Ms. Seligman served on the board of Viacom from August 2016 to December 2019. Until March 2016, Ms. Seligman served as the President of Sony Entertainment, Inc. (beginning in 2014) and of Sony Corporation of America (beginning in 2012), and as Senior Legal Counsel of Sony Group (beginning in 2014). Ms. Seligman previously served as Executive Vice President and General Counsel of Sony Corporation from 2005 to 2014. She joined Sony in 2001 and served in a variety of other capacities during her tenure, including as a Corporate Executive Officer and Group Deputy General Counsel of Sony Corporation, and as General Counsel and an Executive Vice President at Sony Corporation of America, a subsidiary of Sony Corporation. Prior to joining Sony Corporation of America, Ms. Seligman was a partner in the litigation practice at Williams & Connolly LLP in Washington, D.C., where she worked on a broad range of complex civil and criminal matters and counseled a wide range of clients, including President William Jefferson Clinton and Lt. Col. Oliver North. Ms. Seligman joined Williams & Connolly in 1985. Ms. Seligman served as law clerk to Justice Thurgood Marshall on the Supreme Court of the United States from 1984 to 1985 and as law clerk to Judge Harry T. Edwards at the U.S. Court of Appeals for the District of Columbia Circuit from 1983 to 1984. Ms. Seligman has served on the boards of MeiraGTx Holdings plc since 2019 and Far Peak Acquisition Corporation since 2020, and previously served on the board of Far Point Acquisition Corporation from 2018 until 2020. She has been a Non-Executive Director of WPP plc since 2014 and its Senior Independent Director since 2016.

 

Ms. Seligman has extensive media industry experience with various leadership roles at a major media conglomerate, public company and corporate governance expertise, and exceptional achievements in the legal profession. Ms. Seligman has served and continues to serve on several non-profit boards, including currently as Vice Chair of the Schwarzman Animal Medical Center.

    
    
    
    
    
    
    

 

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ITEM 1 — ELECTION OF DIRECTORS

 

 

LOGO

 

Director

 

Age: 68

 

Director since: 2018

 

Committees:

•  Audit Committee

 

  

FREDERICK O. TERRELL

 

Mr. Terrell is a Senior Advisor at Centerbridge Partners, L.P., a multi-strategy private investment management firm. Prior to his current role, Mr. Terrell served as Executive Vice Chairman of Investment Banking and Capital Markets at Credit Suisse where he was responsible for Credit Suisse’s global banking relationships with some of its most respected clients. His investment banking career began in 1983 as an associate with First Boston Corporation. From 2000 to 2008, he was the Managing Partner of Provender Capital Group, LLC, a private equity firm focusing on investments in emerging companies. Mr. Terrell currently serves as a member of the boards of directors of The Bank of New York Mellon Corporation, Computer Services Inc. (CSI) and Mobility Capital Finance Inc. (MoCaFi) and is a member of the Investment Committee of the Rockefeller Foundation and the board of the Kaiser Family Foundation. He has previously served as a member of the boards of directors of the New York Life Insurance Company, Vroom, Inc., Wellchoice Inc. (formerly Empire Blue Cross Blue Shield) and Carver Bancorp, Inc. His experience also includes past and present service on multiple not-for-profit boards – the University Council of Yale University, Yale School of Management, Partnership for New York City, Partnership Fund for New York City, Coro New York Leadership Center and Big Brothers Big Sisters of New York City. He is a member of the Council on Foreign Relations and the Economic Club of New York.

 

Based on his extensive banking and corporate advisory experience, Mr. Terrell brings significant business and financial expertise to the Board in its deliberations on corporate strategy, complex transactions and other financial matters.

    
    
    
    
    

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.

 

 

 

        

 

  

 

2023 PROXY STATEMENT        31  

 


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Director Compensation

OUTSIDE DIRECTOR COMPENSATION DURING 2022

The following table sets forth information concerning the compensation of our Outside Directors for 2022.

 

Name

Fees Earned or
Paid in Cash
($)

(1)

Stock
Awards
($)

(2)

Change in

Pension

Value and
Nonqualified
Deferred

Compensation

Earnings

($)

(3)

All Other
Compensation
($)

(4)

Total

($)

Beinecke, Candace K.

 

110,000

 

200,032

 

72

 

25,000

 

335,104

Byrne, Barbara M.

 

138,000

 

200,032

 

 

25,000

 

363,032

Griego, Linda M.

 

114,000

 

200,032

 

 

25,000

 

339,032

Klieger, Robert N.

 

100,000

 

200,032

 

42

 

25,000

 

325,074

McHale, Judith A.

 

152,000

 

200,032

 

19

 

25,000

 

377,051

Nelson, Ronald L.

 

132,000

 

200,032

 

 

25,000

 

357,032

Phillips, Jr., Charles E.

 

112,000

 

200,032

 

4,801

 

 

316,833

Redstone, Shari E.

 

300,000

 

200,032

 

202

 

25,000

 

525,234

Schuman, Susan

 

112,000

 

200,032

 

 

7,110

 

319,142

Seligman, Nicole

 

132,000

 

200,032

 

 

25,000

 

357,032

Terrell, Frederick O.

 

116,000

 

200,032

 

34

 

7,500

 

323,566

 

(1)

Reflects cash amounts earned by Outside Directors in 2022 for (a) the annual Board retainer, (b) the Chair retainer and (c) committee Chair retainers and meeting attendance fees for standing and ad hoc committee meetings, as applicable. These amounts include retainers and attendance fees deferred by Mses. Beinecke and Redstone and Messrs. Klieger and Phillips under the Director Deferred Compensation Plans.

 

(2)

Amounts reflect the grant date fair value determined in accordance with FASB ASC Topic 718 of the annual grant of RSUs to each Outside Director under the 2015 Equity Plan for Outside Directors. For a discussion of the assumptions made in calculating the grant date fair value amounts for 2022, see Note 16 “Stock-Based Compensation” to the audited 2022 consolidated financial statements on pages II-91 to II-93 in our Annual Report on Form 10-K for the year ended December 31, 2022. The aggregate number of unvested RSUs outstanding as of December 31, 2022 for each Outside Director was 5,558. There were no option awards outstanding as of December 31, 2022 for the Outside Directors.

 

(3)

Interest accrues on cash in deferred accounts under the Director Deferred Compensation Plans at the prime rate in effect at Citibank, N.A. at the beginning of each calendar quarter. For 2022, the prime rate represented an interest rate that was more than 120% of the long-term applicable federal rate published by the Internal Revenue Service and therefore is deemed to be preferential for purposes of this table. Accordingly, amounts in the table reflect the amount of interest accrued for each Outside Director in 2022 that exceeded the amount of interest that would have been accrued at 120% of the long-term applicable federal rate published by the Internal Revenue Service. Mses. Byrne, Griego, Schuman and Seligman and Mr. Nelson did not have any deferred cash amounts during 2022.

 

(4)

Amounts reflect the aggregate value of all matching contributions made by us on behalf of the director for 2022 under our Matching Gifts Program for Directors. Under the program in effect for 2022, we matched donations made by a director to eligible tax-exempt organizations at the rate of one dollar for each dollar donated up to $25,000 for each fiscal year.

DESCRIPTION OF DIRECTOR COMPENSATION

Directors who are not employees of the Company or any of its subsidiaries are “Outside Directors” as defined in the director plans described below. Outside Directors receive compensation for their service on the Board and are eligible to participate in these director plans. All of the directors identified in the “Outside Director Compensation During 2022” table above were deemed Outside Directors during 2022. Mr. Bakish was not compensated for serving on the Board and was not eligible to participate in any director plans, other than the Matching Gifts Program for Directors.

 

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DIRECTOR COMPENSATION

 

Cash Compensation

We pay the following cash compensation to Outside Directors:

 

 

The Non-Executive Chair of the Board receives an annual Board retainer of $300,000 and all other Outside Directors receive an annual Board retainer of $100,000, in each case payable in equal installments quarterly in advance;

 

 

The Chairs of the Audit, Compensation and Nominating and Governance Committees each receive an annual retainer of $20,000, payable in equal installments quarterly in advance, and the members of those Committees receive a per meeting attendance fee of $2,000; and

 

 

The Chairs and members of any ad hoc committees of the Board that may exist from time to time will be paid as determined by the Board.

Deferred Compensation Plan

We maintain deferred compensation plans for Outside Directors (the “Director Deferred Compensation Plans”). Under the Director Deferred Compensation Plans, Outside Directors may elect to defer their Board and Committee chair retainers and Committee meeting fees. Deferred amounts are credited during a calendar quarter to an interest-bearing income account or a stock unit account in accordance with the director’s prior election. Amounts credited to an income account bear interest at the prime rate in effect at the beginning of each calendar quarter. Amounts credited to a stock unit account are deemed invested in phantom units for shares of our Class A Common Stock and Class B Common Stock on the first day of the calendar quarter following the quarter in which the amounts are credited, with the number of shares calculated based on the closing market prices on that first day. Until the amounts credited to the stock unit account are converted into phantom units, these credited amounts bear interest at the prime rate in effect at the beginning of the relevant calendar quarter.

Upon a director’s leaving the Board, the amounts deferred under the Director Deferred Compensation Plans are paid in cash in a lump sum or in three or five annual installments, based on the director’s prior elections, with the lump sum or initial annual installment becoming payable on the later of six months after the director leaves the Board or January 15th of the following year. The value of a stock unit account is determined by reference to the average of the respective closing market prices of our Class A Common Stock and Class B Common Stock on Nasdaq on each trading date during the four-week period ending five business days prior to the initial payment date. Amounts paid in installments accrue interest until the final installment is paid.

 

 

        

 

  

 

2023 PROXY STATEMENT        33  

 


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DIRECTOR COMPENSATION

 

Equity Compensation

We maintain the 2015 Equity Plan for Outside Directors (the “Director Equity Plan”). Under the Director Equity Plan, Outside Directors receive an annual grant of RSUs and, for Outside Directors who join the Board following the date of the annual RSU grant, and meet the eligibility requirements described below, a pro-rated RSU grant. In consultation with ClearBridge, the Nominating and Governance Committee recommended, and the Board determined, to modify the terms of our Outside Directors’ annual equity compensation, beginning in calendar year 2023, to align the annual grant date with Outside Directors’ election to the Board and to align the formula for determining the number of RSUs underlying the annual grant with that of our annual management grants. The terms of our Outside Directors’ equity compensation are summarized below.

 

 

Equity Compensation for Outside Directors

     

Terms

   Prior to 2023    2023 and After
     

Grant Value

   $200,000    Same
     

Annual Grants

         
     

Grant Date

   February 15th of applicable year    Date of annual meeting of Company’s stockholders (“Applicable Annual Meeting”) for applicable year
     

RSU Determination

Formula

  

Grant Value

                                                                                                                                        

Closing price of a share of Paramount Class B Common Stock (“Share”) on grant date*

  

Grant Value

                                                                                                                                                    

Average closing price of a Share for 20-trading day period immediately preceding and including grant date*

   *If the grant date is not a trading day, the closing price on the last trading day preceding the grant date is used    *Same
     

Grant Vesting Terms

   Generally, vest on first anniversary of grant date    Generally, vest on the earlier of (i) the Applicable Annual Meeting for the year following grant date and (ii) the first anniversary of grant date
     

Pro-Rated Grants

         
     

Eligibility

   Outside Directors joining following the date of the annual RSU grant, but during the calendar year of the grant    Outside Directors joining following the date of the annual RSU grant, but more than one month before the next Applicable Annual Meeting
     

Grant Date

   5 business days after joining the Board    Same
     

Pro-Ration and RSU

Determination Formula

  

LOGO

 

*Counting the month of joining as a full month.

 

**If the grant date is not a trading day, the closing price on the last trading day preceding the grant date is used

  

 

 

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*Rounding up to the nearest whole month.

 

**If the grant date is not a trading day, the closing price on the last trading day preceding the grant date is used

     

Vesting Terms

   Vest on same date as immediately preceding annual RSU grant    Same

 

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DIRECTOR COMPENSATION

 

RSUs are payable to Outside Directors in shares of the Company’s Class B Common Stock upon vesting unless the Outside Director elects to defer settlement of the RSUs to a future date. Outside Directors are entitled to receive dividend equivalents on the RSUs in the event the Company pays a regular cash dividend on its Class B Common Stock. Dividend equivalents will accrue on the RSUs (including deferred RSUs) until the RSUs are settled (and will be forfeited if the RSUs are forfeited).

In light of the transition to a new grant date in 2023, effective March 1, 2023, Outside Directors received a one-time pro-rated transition grant consisting of 2,169 RSUs, based on the number of months from February 15, 2023 to May 8, 2023 (rounded to the nearest whole month) and the average closing price of our Class B Common Stock on Nasdaq for the 20-trading day period immediately preceding and including such grant date.

Matching Gifts Program for Directors

All directors are eligible to participate in our Matching Gifts Program for Directors. Under the program, we match donations made by a director to eligible tax-exempt organizations at the rate of one dollar for each dollar donated up to $25,000 for each fiscal year. The purpose of the program is to recognize the interest of the Company and its directors in supporting eligible organizations.

Director Stock Ownership Requirement

Under the Guidelines, directors are expected to own shares of Paramount stock worth five times the standard annual Board retainer (or $500,000) within three years of becoming a director. Class A Common Stock phantom units and Class B Common Stock phantom units credited pursuant to the Director Deferred Compensation Plans, and vested RSUs for which settlement has been deferred under the Director Equity Plan and the Viacom Inc. 2011 RSU Plan for Outside Directors, count toward the requirement; unvested RSUs are counted at 50%. The Nominating and Governance Committee monitors compliance with these guidelines by receiving an annual progress report from senior management. During 2022, senior management reported to the Committee that all directors subject to the guidelines met the guidelines as applied to each of them at that time.

Other

Expenses: Directors are reimbursed for expenses incurred in attending Board, committee and stockholder meetings and certain Company events (including travel and lodging) in accordance with the Company’s Board travel policies, and administrative expenses that may be approved by the Board from time to time.

Director Attendance at Certain Other Events: Paramount believes it is in its best interest for directors to participate in certain Company and other events, including to meet with management, customers, talent and others important to our business, and that such participation is, therefore, integrally and directly related to the performance of the directors’ duties. The Board has established a policy on director attendance at these events. Under the policy, tickets to these events are allocated to directors and we reimburse directors for travel and related expenses in accordance with our travel policies. Occasionally, a director’s partner or other guest may accompany him or her to events at our invitation or request. To the extent attendance at and/or travel to these events constitutes a reportable perquisite involving an incremental cost to us, we disclose it in the “All Other Compensation” column of the “Outside Director Compensation During 2022” table.

 

 

        

 

  

 

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Item 2 — Ratification of the Appointment of the Independent Registered Public Accounting Firm

The Audit Committee has appointed PwC as our independent registered public accounting firm for the year ending December 31, 2023, subject to stockholder ratification. The Audit Committee has reviewed PwC’s independence from the Company as described in the “Report of the Audit Committee.” In appointing PwC as our independent registered public accounting firm for the year ending December 31, 2023, and in recommending that our stockholders ratify the appointment, the Audit Committee has considered whether the non-audit services provided by PwC were compatible with maintaining PwC’s independence from the Company and has determined that such services do not impair PwC’s independence.

Representatives of PwC are expected to be present at the Annual Meeting and will be given an opportunity to make a statement if they desire to do so. They will also be available to respond to questions at the Annual Meeting.

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP TO SERVE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2023.

 

 

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Report of the Audit Committee

The following Report of the Audit Committee does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate such information by reference.

The Audit Committee Charter states that the purpose of the Audit Committee is to oversee our accounting and financial reporting processes and the audit of our consolidated financial statements. The Audit Committee also assists the Board of Directors’ oversight of:

 

 

The quality and integrity of our consolidated financial statements and related disclosures;

 

 

The evaluation of the effectiveness of our internal control over financial reporting and risk management;

 

 

Our compliance with legal and regulatory requirements;

 

 

The independent auditor’s qualifications and independence; and

 

 

The performance of our internal audit function and independent auditor.

Under the Audit Committee Charter, the Audit Committee’s authorities and duties include:

 

 

Direct responsibility for the appointment, retention, termination, compensation and oversight of the work of the independent auditor, which reports directly to the Audit Committee, and the sole authority to pre-approve all services provided by the independent auditor;

 

 

Reviewing and discussing our annual audited financial statements, quarterly financial statements and earnings releases with management and the independent auditor;

 

 

Reviewing the organization, responsibilities, audit plan and results of the internal audit function;

 

 

Reviewing with management and the independent auditor the effectiveness of our internal control over financial reporting and disclosure controls and procedures;

 

 

Reviewing with management material legal matters and the effectiveness of our procedures to ensure compliance with legal and regulatory requirements; and

 

 

Overseeing our compliance program and receiving periodic reports from the Chief Compliance Officer.

The Audit Committee also discusses certain matters with the independent auditor on a regular basis, including our critical accounting policies, certain communications between the independent auditor and management, and the qualifications of the independent auditor.

The full text of the Audit Committee Charter is available on the “Investors—Corporate Governance & ESG” page of our website at ir.paramount.com. The Audit Committee assesses the adequacy of its Charter at least annually, or more frequently as the Committee may determine.

Management is responsible for the preparation of our consolidated financial statements, the financial reporting processes and maintaining effective internal control over financial reporting. The independent auditor is responsible for performing an audit of the consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and expressing an opinion on the conformity of the audited consolidated financial statements to U.S. generally accepted accounting principles. The independent auditor also expresses an opinion on the effectiveness of our internal control over financial reporting. The Audit Committee monitors and oversees these processes.

As part of its oversight role, the Audit Committee has reviewed and discussed with management and our independent auditor, PricewaterhouseCoopers LLP (“PwC”), the audited consolidated financial statements and our disclosures under “Management’s Discussion and Analysis of Results of Operations and Financial Condition” included in our Annual Report on Form 10-K for the year ended December 31, 2022 and matters relating to the effectiveness of our internal control over financial reporting as of December 31, 2022.

The Audit Committee has also discussed with PwC all required communications, including the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. In addition, the Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with PwC the firm’s independence from the Company.

 

 

        

 

  

 

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REPORT OF THE AUDIT COMMITTEE

 

Based on this review and these discussions, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Audit Committee

Barbara M. Byrne, Chair

Judith A. McHale

Ronald L. Nelson

Frederick O. Terrell

 

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Fees for Services Provided by the Independent Registered Public Accounting Firm

The following table sets forth fees for professional services rendered by PwC to the Company and its subsidiaries for each of the years ended December 31, 2022 and 2021.

 

 

 

   2022      2021  

Audit Fees(1)

  

$

17,848,187

 

  

$

18,252,381

 

Audit-Related Fees(2)

  

 

267,216

 

  

 

432,060

 

Tax Fees(3)

  

 

7,361,264

 

  

 

7,762,122

 

All Other Fees(4)

  

 

119,150

 

  

 

68,854

 

Total

  

$

25,595,817

 

  

$

26,515,417

 

 

(1)

Audit fees principally related to the integrated audit of our financial statements, statutory audits and services provided in connection with our debt and equity offerings, comfort letters and SEC filings.

 

(2)

Audit-related fees principally related to technical accounting advice, agreed-upon procedures and compliance, and domestic and foreign employee benefit plan audits.

 

(3)

Tax fees principally related to tax compliance and consulting.

 

(4)

All other fees principally related to research projects, license fees for the use of PwC reference materials and publications, access to various online tools and other permissible consulting services.

AUDIT COMMITTEE PRE-APPROVAL OF SERVICES PROVIDED BY PWC

All audit and non-audit services provided to us by PwC for 2022 were pre-approved by either the full Audit Committee or the Chair of the Audit Committee. Under the Audit Committee’s pre-approval policies and procedures in effect during 2022, the Chair of the Audit Committee was authorized to pre-approve the engagement of PwC to provide certain specified audit and non-audit services, and the engagement of any accounting firm to provide certain specified audit services, up to a maximum amount of $200,000 per engagement, with the total amount of such authorizations outstanding that have not been reported to the Audit Committee not to exceed an aggregate of $1,000,000. The Audit Committee receives regular reports on the engagements approved by the Chair pursuant to this delegation. For 2023, the Audit Committee has adopted the same pre-approval policies and procedures that were in effect for 2022.

 

 

        

 

  

 

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy and objectives and the decisions of the Compensation Committee of our Board of Directors (“Compensation Committee” or, in this CD&A, “Committee”) regarding the fiscal year 2022 compensation of our named executive officers (also referred to as “NEOs”) included in the compensation tables that appear after this CD&A.

 

 

Our NEOs and Compensation Committee     40  

Our Named Executive Officers

    40  

Our Compensation Committee

    40  
Executive Summary     41  

Recent Compensation Committee Highlights

    41  

Our Strategic Growth Priorities

    41  

Pay for Performance

    42  
Compensation Philosophy and Objectives     44  

Introduction

    44  

Risk Oversight

    44  

Our Compensation Strategies

    44  

Elements of Our Executive Compensation Program

    45  

Role of Compensation Consultants

    46  
Peer Group Composition     47  

Fiscal Year 2022 Peer Group

    47  
Fiscal Year 2022 Compensation     47  

Changes in NEOs’ Compensation Arrangements in 2022

    47  
Fiscal Year 2022 Compensation Elements     48  

Base Salary

    48  

Annual Bonus Awards

    48  

Fiscal Year 2023 Bonus Program

    53  

Long-Term Management Incentive Program

    53  
Stock Ownership Guidelines     55  
Anti-Hedging and Anti-Pledging Policies     56  
Other Benefits and Programs     56  

Retirement and Deferred Compensation Plans

    56  

All Other Compensation

    56  

Post-Termination Arrangements

    56  

Employment Contracts

    57  
Tax Considerations     57  
 

 

OUR NEOS AND COMPENSATION COMMITTEE

Our Named Executive Officers

The following five executive officers are our NEOs for fiscal year 2022:

 

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Robert M. Bakish

President and
Chief Executive Officer

 

Naveen Chopra

Executive Vice President, Chief Financial Officer

 

Christa A. D’Alimonte

Executive Vice President, General Counsel and Secretary

 

Doretha F. Lea

Executive Vice President, Global Public Policy and Government Relations

 

Nancy Phillips

Executive Vice President, Chief People Officer

Our Compensation Committee

The Compensation Committee is currently composed of Linda M. Griego, Judith A. McHale (Chair) and Ronald L. Nelson, each of whom is an independent director.

The Committee is made up entirely of independent directors and reviews and approves our compensation arrangements with our NEOs and certain other senior executives. For 2022, the Committee reviewed all elements of compensation, including base salary, short- and long-term incentives, severance arrangements and benefit programs for each senior

 

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executive under its purview, to ensure that they adhere to our core compensation philosophy and objectives, and approved any salary increases, annual bonus payouts, long-term incentive award determinations and various other compensation actions.

EXECUTIVE SUMMARY

This CD&A describes our executive compensation philosophy and objectives and provides context for the 2022 compensation actions approved by the Committee for the NEOs. In addition to reviewing and approving the compensation arrangements for our NEOs and certain other senior executives, the Committee adopts and periodically reviews our compensation philosophy, strategy, and principles, and oversees the administration of our cash-based and equity-based incentive plans.

Recent Compensation Committee Highlights

As further described elsewhere in this proxy statement, during 2022 the Committee continued to support our executive compensation programs, as outlined below, which demonstrate our pay-for-performance linkage and provide alignment with peer and market practices.

 

 

Executive Annual Bonus Plan Design: Bonus payouts to our NEOs and other executives with respect to 2022 are primarily based on financial and other quantitative performance measures intended to emphasize our focus on direct-to-consumer (“DTC”) streaming growth while also meeting our bottom-line financial goals. Given the Committee’s assessment that the 2021 Short-Term Incentive Plan (“STIP”) design was successful in driving and rewarding desired behaviors, for 2022, the Committee determined to continue with generally the same performance metrics, weightings, payout curves and risk mitigation concepts that were incorporated into the 2021 STIP design. See pages 48-53.

 

 

Stronger Pay-for-Performance Linkage: The Committee recognizes the importance of having long-term performance incentives as a meaningful portion of our NEOs’ total long-term incentive compensation. For 2022, the Committee increased the percentage of long-term incentive awards delivered in performance-based equity from 25% to 50% for our Chief Executive Officer, and from 25% to 35% for the remaining NEOs and certain other senior executives. See pages 53-54. Further, in connection with the employment agreement renewal process for certain NEOs, the Committee took the opportunity to increase the percentages that variable, at-risk pay and long-term incentive awards comprise of such NEOs’ total target compensation. See pages 61-62.

 

 

Enhanced Risk Mitigation: To further discourage imprudent risk taking and avoid undue emphasis on any one metric or goal, for fiscal year 2022 awards, the Committee followed its practice of avoiding the duplication of metrics in the Company’s annual bonus plan and long-term incentive plan designs. The Committee intends to continue this practice for fiscal year 2023 awards and beyond. The Committee maintained multiple risk mitigation concepts in the 2022 STIP design to incentivize our DTC streaming growth while continuing to meet our financial expectations and avoiding unnecessary risk taking. Additionally, the Committee continues to maintain robust executive stock ownership guidelines. See page 48-55.

Our Strategic Growth Priorities

We are a leading global media, streaming and entertainment company that creates premium content and experiences for audiences worldwide. We offer popular streaming services and digital video products, broadcast and cable television programming, and powerful capabilities in production, distribution and advertising solutions, and have one of the industry’s most extensive libraries of television and film titles. As the entertainment industry continues to expand beyond linear-based platforms to streaming video, we have prioritized unlocking the incremental market opportunity in streaming and continue to grow our global ecosystem of pay, free and premium streaming services.

 

 

        

 

  

 

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We execute against a differentiated multiplatform strategy, grounded in three key strengths: our broad range of popular content; our multiplatform distribution model and our global operating reach. The below outlines our approach in detail.

 

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The Committee considers these strategic priorities in its comprehensive annual review of our compensation programs, including its design, and determination, of performance-based compensation. (See “Annual Bonus Awards” for a discussion of how our annual bonus program is intended to link performance to these priorities.)

Pay for Performance

We believe that those executives with significant responsibility and a greater ability to influence our results should have a significant portion of their total compensation tied directly to business results, and we have continued to shift our executive compensation packages to further emphasize performance-based compensation that is aligned with our business and operational strategy. Accordingly, a high percentage of our NEOs’ and other senior executives’ total target compensation is “at risk” — meaning that we do not intend for them to receive targeted pay amounts if performance does not meet expectations. For 2022, the Committee increased the percentage of Mr. Bakish’s and our other NEOs’ long-term incentive awards that was delivered in performance share units (“PSUs”) to 50% and 35%, respectively.

Consistent with this philosophy, our performance-based compensation programs provide for the opportunity to reward NEOs and other senior executives for contributing to annual financial and operational performance (through annual bonus programs) and stock price appreciation (through long-term equity incentives). The only fixed component of pay is annual base salary. Annual cash incentive awards and long-term equity incentive awards are subject to company performance and/or stock price performance.

As illustrated below, approximately 90% of Mr. Bakish’s total target compensation as of December 31, 2022 was at risk and thus strongly linked to our results. Similarly, on average, approximately 74% of total target compensation for the other NEOs as of December 31, 2022 was at risk.

 

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2022 Target Compensation

 

 

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Note: The amounts shown in these graphs reflect the target level compensation package for the NEOs as of December 31, 2022 and may differ from actual compensation amounts reflected in the Summary Compensation Table in this proxy statement.

In selecting the financial performance metrics and goals for the performance-based compensation programs each year, the Committee considers our annual operating budget for the upcoming year, as approved by the Board. Our budgeting process reflects aggressive goal setting and considers the expected performance of the media industry for that year, as determined by media industry analysts. The Committee believes that this goal-setting process results in challenging, yet realistic, financial and operational goals that, if achieved, will lead to a successful return of value for shareholders.

For fiscal year 2022, the Committee determined that it was appropriate to continue utilizing streaming-related metrics — Direct-to-Consumer Subscribers and Direct-to-Consumer Revenue — and our bottom-line financial metrics — budgeted adjusted Operating Income Before Depreciation and Amortization (“Adjusted OIBDA”) and Free Cash Flow (“FCF”) — when setting quantitative performance goals that reflect our core pay-for-performance philosophy. See “Annual Bonus Awards” for additional discussion of these goals.

 

 

        

 

  

 

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COMPENSATION PHILOSOPHY AND OBJECTIVES

Introduction

We designed our executive compensation programs to motivate and reward business success and to increase shareholder value, based on the following core objectives:

 

 

Pay for Performance

Ensure plans provide reward levels that
reflect variances between actual and
desired performance results.

 

    

 

Flexible

Enable management and the Board to
make decisions based on the needs of the
business and to recognize different levels
of individual contribution.

 

 

  

 

 

 

 

Market Competitive

Consider compensation programs of our
peers to attract and retain the
talent needed to drive sustainable competitive
advantage and deliver value to shareholders.

 

    

 

Focused on Shareholder Value

Align executives’ interests with shareholder
interests, with particular emphasis on creating
incentives that reward executives for consistently increasing the value of Paramount.

 

In determining our compensation policies and decisions for fiscal year 2022, we considered the results of the previous votes held on the compensation of our NEOs, and as a result, continued to base our compensation programs on the above-listed core objectives.

Risk Oversight

The Compensation Committee has oversight over the design and administration of our compensation programs, including to ensure that such programs do not promote an environment that encourages unnecessary and excessive risk taking by our employees. Based on management’s assessment and input from the Committee’s independent compensation consultant, the Committee does not believe that our employee compensation policies and practices create risks that are reasonably likely to have a material adverse effect on us.

Our Compensation Strategies

We use a mix of cash and equity incentives. The Committee believes that both cash and equity incentives are important to an effective compensation structure. Annual cash incentives reward executives for short-term financial and operating results that serve as a foundation for creating long-term value, while equity incentives motivate executives to execute long-term financial and strategic objectives to increase shareholder value through stock price performance.

We consider multiple factors when structuring compensation packages. In deciding the amount of cash and equity incentives that our NEOs and other senior executives receive, the Committee does not use rigid guidelines to determine the mix of compensation elements (i.e., short-term versus long-term compensation and cash versus non-cash compensation) for each senior executive. The Committee considers a multitude of factors, including the executive’s total target compensation, the amount of compensation that is delivered in fixed versus variable, at-risk elements of compensation, external and internal market data, our succession planning and retention needs, the scope of the executive’s role and the executive’s performance and length of time in the role.

We choose performance metrics and establish performance goals that are intended to further our long-term strategic goals. The Committee believes that a significant portion of our executives’ compensation should be subject to the achievement of performance goals that are objectively measurable and that represent aggressive performance standards that are reasonably attainable, and that any performance goals are based on easily understood metrics intended to drive shareholder value creation. Each year, the Committee selects the financial performance metrics and goals for the performance-based compensation programs and, to avoid distorted performance goals, approves adjustments to the

 

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calculation of those goals, which adjustments generally are pre-approved. Each year, the Committee also establishes qualitative factors and weightings for the annual bonus plan in which our NEOs and other executives participate, with multiple pre-established objectives for the Committee to assess when evaluating management’s performance. The Committee believes this process results in performance goals that are challenging, yet realistic, and that will not encourage senior executives to engage in overly risky business activities to achieve unattainable goals or overcome lower results caused by unforeseen events.

Elements of Our Executive Compensation Program

The table below outlines the key elements of the compensation arrangements with our NEOs and other senior executives, and describes their purpose, key characteristics and, if applicable, the type of performance measured and how we deliver the compensation.

Total Target Compensation:

 

Compensation Element

   Purpose    Fixed or At Risk    Performance Measured    Cash or Equity

Base Salary

  

•  Provide competitive compensation to attract and retain executive talent

•  Provide secure base of guaranteed cash for services rendered

   Fixed    Individual    Cash

Annual Bonus Awards

  

•  Incentivize, and reward for, achievement of a combination of challenging annual financial and operational performance goals and individual contributions

   At Risk    Corporate and Individual    Cash

Long-Term Incentives

  

•  Align interests between executives and shareholders by linking realizable pay to stock price performance

•  Retain talent and build executive ownership

   At Risk    Corporate    Equity

The table below sets forth the total target compensation packages for our NEOs as of December 31, 2022.

 

NEO

  

Base

Salary

    

Target

Bonus

    

Target LTI

Award

    

Total Target

Compensation

 

Robert M. Bakish

  

$

3,100,000

 

  

$

12,400,000

 

  

$

16,000,000

 

  

$

31,500,000

 

Naveen Chopra

  

$

1,400,000

 

  

$

2,100,000

 

  

$

3,000,000

 

  

$

6,500,000

 

Christa A. D’Alimonte

  

$

1,350,000

 

  

$

1,687,500

 

  

$

2,700,000

 

  

$

5,737,500

 

Doretha F. Lea

  

$

1,000,000

 

  

$

1,000,000

 

  

$

1,000,000

 

  

$

3,000,000

 

Nancy Phillips

  

$

925,000

 

  

$

925,000

 

  

$

1,200,000

 

  

$

3,050,000

 

 

 

        

 

  

 

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Other Forms of Compensation:

 

Compensation Element

   Purpose

Health and Welfare, Retirement and Deferred Compensation Plans

  

•  Promote employee health and well-being, and financial security for retirement

•  Provide competitive benefits to attract and retain executive talent

Perquisites and Other Personal Benefits

  

•  Provide business-related benefits

•  Assist in attracting and retaining executive talent

Post-Termination Arrangements

  

•  Attract and retain executive talent in a competitive market by providing temporary income following an involuntary termination of employment

•  Provide continuity of management

•  Compensate executives for restrictive covenants and other obligations following a termination without cause or a resignation for good reason

 

 

WHAT WE DO AND DON’T DO

   

We design our executive compensation programs to create long-term stockholder value, align pay and performance and avoid excessive risk taking

 

 Include a relative market-based performance metric (i.e., Relative Total Shareholder Return) in our long-term compensation program

 

 Maintain robust stock ownership guidelines for officers and directors

 

 Cap payouts under our annual bonus program and performance-based equity awards through maximum payouts

 

 Vary performance metrics and measurement periods in our compensation programs to mitigate excessive risk-taking

 

 Structure overall target compensation so that a substantial majority of our NEOs’ annual compensation is at risk

 

 Conduct a robust annual risk assessment of our compensation programs, policies and practices

          
     

We incorporate best practices in our compensation programs

 

 Clawback Policy: Provide for forfeiture, repayment or adjustment of incentive compensation in the event of a financial restatement without regard to misconduct in our NEOs’ employment agreements

 

 Anti-Hedging Policy: Prohibit our employees from hedging our securities

 

 Anti-Pledging Policy: Prohibit our executive officers, Section 16 officers and all other employees who report to our CEO from pledging our securities or holding our securities in a margin account

 

 Re-evaluate our peer group on an annual basis

 

 Retain an independent compensation consultant

 

 Engage with shareholders

 

×  No Tax Gross-Ups – We do not provide excise tax gross-ups in the event of a change in control in our executive employment agreements

 

×  No payment of dividends or dividend equivalents on unvested equity awards

 

×  No repricing of underwater stock options

 

×  No single-trigger change in control agreements

Role of Compensation Consultants

The Committee retains an independent compensation consultant to advise the Committee in its review of senior executive compensation. For fiscal year 2022, the independent compensation consultant was ClearBridge Compensation Group LLC (“ClearBridge”). The Committee has the sole authority to retain and terminate the independent compensation

 

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consultant and to review and approve the firm’s fees and other retention terms. The Committee maintains a policy requiring that its independent compensation consultant not provide services to the Company other than its services to the Committee and its services to the Company with respect to the evaluation of non-executive director compensation. ClearBridge did not provide any such services in 2022.

PEER GROUP COMPOSITION

Fiscal Year 2022 Peer Group

In reviewing senior executive compensation, the Committee considers data regarding the competitive market for comparable senior executive talent. The Committee reviews the peer group to be used for benchmarking NEO and other senior executive compensation packages with ClearBridge annually. The Committee seeks to include companies with which we compete for executive and creative talent and with a business of similar scope and complexity. The Committee also seeks to ensure that the number of companies in the peer group is sufficient to provide a degree of continuity year-over-year to avoid statistical distortion.

Following the Committee’s review for 2022, the Committee determined that the established peer group, below, continued to reflect those companies with which we compete for talent and that are of a similar size to the Company when measured by revenue and enterprise value and no changes were necessary.

 

2022 Peer Group

AT&T Inc.

 

Charter Communications, Inc.

 

Comcast Corporation

 

Warner Bros. Discovery, Inc.

 

DISH Network Corp.

 

Fox Corporation

 

 

  

Liberty Global plc

 

Lions Gate Entertainment Corp.

 

Netflix, Inc.

 

News Corporation

 

The Walt Disney Co.

The Committee determined that utilizing data from this peer group would continue to allow it to evaluate our NEO compensation to attract, retain and appropriately compensate our executives, while preserving sufficient year-over-year continuity of our peer group. The Committee used the publicly reported NEO compensation data from companies in this group as reference points in assessing the compensation levels for our NEOs. Consistent with its past practice and overall compensation philosophy, the Committee does not target a benchmark level of compensation and intends to continue to refrain from doing so. The Committee will also maintain its practice of considering the scope of each NEO’s responsibility and his or her length of time in the role, in addition to other factors.

Fiscal Year 2023 Peer Group

In connection with its annual review of the Company’s compensation benchmarking peer group, the Committee determined that AT&T Inc. and News Corporation were no longer aligned with the Company’s business and removed them from the peer group for fiscal year 2023. The Committee also determined to add Altice USA, Inc., finding its addition appropriate due to its size and business similarities to our other peers.

FISCAL YEAR 2022 COMPENSATION

Changes in NEOs’ Compensation Arrangements in 2022

In connection with the renewal of each of the following NEO’s employment agreement, the Committee made the following changes to such NEO’s compensation arrangements:

 

 

increased the base salaries of Mses. D’Alimonte, Lea and Phillips to $1,350,000, $1,000,000 and $925,000, respectively; and

 

 

increased the target value of the annual grant of equity compensation to each of Mses. D’Alimonte, Lea and Phillips to $2,700,000, $1,000,000 and $1,200,000, respectively.

 

 

        

 

  

 

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In keeping with the Committee’s pay-for-performance philosophy and to further align our NEOs’ interests with those of our stockholders, these compensation changes increased the percentage of total target compensation delivered in variable, at-risk pay and performance-based long-term incentives for each of these three NEOs.

Fiscal Year 2022 Compensation Elements

The Committee’s decisions with respect to fiscal year 2022 compensation are discussed below.

Base Salary

In reviewing proposals for changes to base salary for NEOs, the Committee considers the following:

 

 

Appropriate competitive compensation data for the position;

 

 

Individual performance;

 

 

Base salary level for the executive in relation to the executive’s total target compensation;

 

 

Base salary level as it relates to the allocation of fixed versus at risk compensation;

 

 

Input and recommendations of the Chief Executive Officer (for NEOs other than himself);

 

 

The level of the annual merit increase budget across the Company as a whole; and

 

 

Existing contractual obligations, if any.

Annual Bonus Awards

We use annual cash bonuses to reward achievement of financial performance and individual strategic and operational objectives under our STIP, which is the same bonus program in which our broader bonus-eligible employee base participates. In establishing the bonus program for 2022, the following process was utilized:

 

1.

At the beginning of the fiscal year:

Approval of the 2022 STIP Design. The Committee approved the framework under which individual bonus amounts for NEOs (and all other bonus-eligible employees) would be determined under the STIP, which consisted of two steps.

 

   

Step 1: At or shortly following the end of fiscal year 2022, the Committee assesses the degree of achievement against the quantitative and qualitative performance goals previously set for fiscal year 2022, which provides a preliminary bonus funding percentage for each NEO. For the quantitative performance goals, bonus amounts are assessed in relation to pre-established threshold, target and maximum goals. For the qualitative performance goals, bonus amounts are assessed in relation to the degree of achievement against the pre-established objectives.

 

   

Step 2: The Committee has the opportunity to modify the preliminary bonus amount for each NEO based on the Committee’s assessment of each NEO’s individual performance for fiscal year 2022 after consideration of the CEO’s recommendation for all NEOs other than the CEO, subject to the maximum individual bonus payout of 200% of target for each NEO.

This two-step approach reflects the Committee’s view that Company-wide quantitative and qualitative performance, in combination with individual performance, should be the factors used in determining bonuses for NEOs. To avoid undue risk taking, the Committee determined that the final STIP payout for any NEO may not exceed 200% of the NEO’s target bonus amount.

Setting the 2022 STIP Performance Goals. The Committee established the quantitative performance goals applicable to the 2022 STIP, which were not certain of achievement at the time they were set, and the qualitative performance factors for the year. The goals were developed to encourage and reinforce a “One Paramount” mindset, as well as incentivize maximizing our traditional businesses to help drive our DTC streaming growth and continuing our progress on our strategic, organization development and diversity, equity and inclusion initiatives.

In setting the 2022 STIP quantitative performance goals, the Committee sought to establish performance goals that were meaningful, challenging, and designed to motivate collaborative performance, without encouraging senior

 

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executives to engage in excessively risky business activities to achieve unattainable goals or overcome lower results caused by unforeseen events. The Committee determined to base 2022 STIP bonus amounts on the following structure:

 

   

80% based on the degree of achievement of pre-established quantitative performance goals (i.e., collectively, the quantitative performance factor, calculated using weighted average of the payout percentage set for the applicable achievement level). The threshold, target and maximum goals associated with each metric are established annually so that they remain rigorous and in line with our strategic plan. The target established for each metric was set as follows: Adjusted OIBDA, $3.759 billion; FCF, $604 million; DTC Subscribers, 84.6 million; and DTC Revenue, $5.819 billion.

The following chart explains the Committee’s rationale in selecting Adjusted OIBDA, FCF, DTC Subscribers and DTC Revenue as the applicable quantitative performance metrics, and the manner in which each such metric is calculated:

 

   

 

Performance Metric

  Why Chosen   How Calculated

 

LOGO

 

Adjusted Operating Income Before Depreciation and Amortization

(Adjusted OIBDA)

Weighting: 25%

 

An important indicator of our operational strength and performance, as it measures efficiency and profitability and incentivizes management to better control expenses.

 

 

Using our 2022 budget for Adjusted OIBDA and then adjusting for items, if any, approved by the Committee that would otherwise distort the calculation of the performance goal.

 

 

Free Cash Flow (FCF)

Weighting: 15%

 

Provides a clear view of our ability to generate cash (and thus profits), which allows us to pursue opportunities that enhance shareholder value.

 

  Using our 2022 budget for FCF and then adjusting for items, if any, approved by the Committee that would otherwise distort the calculation of the performance goal.
 

DTC Subscribers

Weighting: 20%

  An important indicator of the overall competitiveness of our direct-to-consumer products.  

Using our 2022 budget for DTC Subscribers – i.e., global customers who access our domestic or international streaming services, either directly through our owned and operated apps and websites, or through third-party distributors – and then adjusting for items, if any, approved by the Committee that would otherwise distort the calculation of the performance goal.

 

 

DTC Revenue

Weighting: 20%

  An important driver of our valuation and a key indicator of the future profitability of our direct-to-consumer business.   Using our 2022 budget for DTC Revenue – i.e., global subscription fees and advertising revenue generated by our streaming services, including Paramount+, SHOWTIME OTT, BET+, Noggin and Pluto TV – and then adjusting for items, if any, approved by the Committee that would otherwise distort the calculation of the performance goal.

 

   

20% based on the Committee’s assessment of management’s qualitative performance as a whole with regard to the following factors:

 

  o

Execution of our fiscal year 2022 strategy (10%), including how well we executed in evolving the Company into a leading global, multi-platform, premium content company, capitalizing on opportunities to realize cost synergies and improve business operations, producing high quality content across the entire Company, executing on our ad- and non-ad supported streaming strategy, and continuing to tailor our asset portfolio;

 

  o

Organization Development (5%), executing on our 2022 return-to-office and workplace strategy, integrating values into all people processes and continuing to build a high-performing and inclusive culture that is a competitive advantage for us, building and developing “bench strength” throughout the organization by identifying and developing high potential future leaders; and

 

  o

Diversity, Equity & Inclusion (5%), continuing to make tangible progress on Company-wide diversity, equity & inclusion representation goals by hiring, retaining, promoting and developing diverse talent while fostering an inclusive work environment.

In all cases the maximum amount of STIP funding was capped at 200% of the STIP pool at target.

 

 

        

 

  

 

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In setting the qualitative performance factors for 2022, the Committee determined to exclude the synergy goal included in the 2021 STIP design and reallocate its 5% weighting to the strategy goal described above, as, three years post-merger, the importance of enforcing the Company’s overarching strategy increased relative to the importance of post-merger synergies. Multiple risk mitigation concepts were maintained as part of the 2022 STIP design to strike the appropriate balance in management’s focus on our bottom-line financial goals and our DTC streaming growth strategy. Adjusted OIBDA and FCF achievement were each subject to a maximum payout below 200% of target to incentivize a shift in efforts towards driving streaming growth. The DTC streaming factors were subject to maximum payouts of 300% for achievement of maximum performance, provided that if threshold performance for either of the Adjusted OIBDA or FCF metric was not achieved, both DTC streaming metrics would be capped at a maximum payout percentage of 150%. The Committee determined that these limitations on DTC streaming metric payouts were appropriate to ensure that our bottom-line financial goals continued to remain a priority for management.

 

2.

At or shortly following the end of the fiscal year:

Determining Actual Bonus Payments. In accordance with the framework described above, the Adjusted OIBDA, FCF, DTC Subscribers and DTC Revenue results were calculated by starting with our 2022 results for each metric and then adjusting for items approved by the Committee that would otherwise have distorted the calculation of the performance goals. The Committee determined to adjust our quantitative performance to account for the impact of Russia’s invasion of Ukraine and our decision to suspend operations and pause the supply of content in Russia. Performance results, including such adjustments, were as follows: with respect to Adjusted OIBDA, $3.314 billion, with respect to FCF, $(129) million, with respect to DTC Subscribers, 80.6 million and with respect to DTC Revenue, $4.931 billion.

 

    

 

Adjusted Quantitative Performance Results (80%)

(in millions)

  

Adjusted
OIBDA*

(25%)

  

Free Cash Flow

(15%)

  

DTC Subscribers

(20%)

  

DTC Revenue

(20%)

Unadjusted Result

    

$

3,237

    

$

(206

)

    

 

77.3

    

$

4,904

Adjustment

    

$

77

    

$

77

    

 

3.3

    

$

27

Adjusted Result

    

$

3,314

    

$

(129

)

    

 

80.6

    

$

4,931

* OIBDA was adjusted to exclude the impact of STIP expense on the calculation of percentage achievement.

In accordance with step one of the two-step STIP design process discussed above, in February 2023, the Committee evaluated our adjusted performance for 2022 against the pre-established quantitative performance goals. Based on the adjusted results, DTC Subscribers, DTC Revenue and Adjusted OIBDA results were determined to be between threshold and target, resulting in a below target payout for such factors, and FCF results were determined to be below threshold, resulting in no payout for such factor.

The Committee then evaluated our qualitative performance after receiving the Chief Executive Officer’s overall assessment of the Company’s 2022 qualitative performance goals, which included the following highlights:

 

   

We demonstrated the continued breadth and depth of our multiplatform content capabilities in alignment with our long-term strategy goals;

 

   

For 2022, our global streaming subscribers grew 38% year-over-year and Paramount+ subscribers and revenue grew 70% and 105% year-over-year, respectively; Pluto TV global monthly active users (MAUs) increased 22% year-over-year; and we successfully launched a Paramount+/SHOWTIME bundle;

 

   

CBS finished the 2021-2022 season as America’s number one broadcast network in primetime for the 14th consecutive season and in entertainment was number one across multiple genres in 2022; CBS Sports delivered its most-watched National Football League (the “NFL”) regular season in seven years, while Paramount+ had its most-streamed NFL regular season ever, recording double-digit year-over-year growth; and for the 14th consecutive year, CBS Sports maintained college football’s highest average viewership;

 

   

Paramount Pictures released six films that debuted at number one at the domestic box office in 2022, which were led by Top Gun: Maverick, the fifth highest-grossing domestic movie of all time and first film to top the domestic box office on both Memorial Day and Labor Day; and, released in the fall, Smile became the highest-grossing horror film of the year worldwide;

 

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We expanded our global footprint and built key distribution partnerships with Sky, CANAL+ and Virgin Media; we launched Paramount+ in South Korea, the U.K., Ireland, Italy, France, Germany, Switzerland and Austria, and in the U.S., launched a first-of-its-kind partnership with Walmart to offer Paramount+ Essential to Walmart+ members; we launched SkyShowtime, our streaming joint venture with Comcast, in Denmark, Finland, Norway and Sweden (the “Nordics”); and we launched Pluto TV in Canada with Corus and in the Nordics with Viaplay Group;

 

   

We extended our successful track record in distribution, finalizing key platform and distribution agreements domestically, including with DirecTV, fuboTV, Philo, Mediacom, TEGNA and Scripps;

 

   

We continued to focus on creating operational efficiencies and on portfolio management, including, most recently, our planned integration of SHOWTIME into Paramount+;

 

   

We made progress on our diversity, equity and inclusion representation goals and improved the diverse representation within our talent pipelines, in our writer’s rooms, and on our production sets;

 

   

Our workforce safely returned to the office during 2022, and we continued to navigate COVID-19 issues, keep our productions running, and support the health and wellness of our employees globally; and

 

   

We continued to build and further develop our management team to support our long-term strategic business goals, emphasize global collaboration and look for opportunities to capitalize on efficiencies across the organization.

Based on its quantitative and qualitative assessments, the Committee determined the preliminary bonus funding percentage for 2022 to be 86.5% of target.

In accordance with step two of the two-step STIP design process discussed above, the Committee then modified the 86.5% preliminary bonus funding percentage for each NEO based on the Committee’s assessment of each NEO’s individual performance after consideration of management’s recommendation. When making its 2022 bonus determinations, the Committee considered the input and recommendations of Mr. Bakish with respect to NEOs other than himself. With respect to Mr. Bakish, the Committee took into account his performance evaluation conducted by the Committee, together with the Nominating and Governance Committee, after the close of the fiscal year. The Committee’s determination of the NEOs’ annual bonus amounts, as set forth in the Summary Compensation Table for Fiscal Year 2022 following this CD&A, took into account each NEO’s contributions toward the qualitative performance factors described above, as well as a variety of factors it deemed appropriate, with no pre-determined emphasis on any individual factor. The Committee also considered each NEO’s target bonus amount for 2022, which amounts are based on competitive practice and are included in the table below. The differences in the target bonus amounts set forth in the NEOs’ agreements partly reflect the level of relative impact of each of their positions on our performance.

Because of our NEOs’ performance, we continued to deliver on our streaming strategy. In addition to the accomplishments and other considerations discussed earlier in this CD&A, the Committee noted the following accomplishments within this context:

 

   

Mr. Bakish continued to provide strategic leadership and management for our Company during a time of tremendous challenges and opportunities. He and his senior executive team:

 

  o

continued to successfully execute a differentiated strategy to deliver popular multiplatform content and experiences for consumers globally, while positioning the Company to create long-term value;

 

  o

continued to build scale in the Company’s global streaming business, increasing global DTC subscribers 38% year-over-year to 77.3 million and growing DTC revenue 47% year-over-year to $4.90 billion for 2022;

 

  o

oversaw growth of Paramount+, increasing total subscribers year-over-year in 2022 to 55.9 million as of December 31, 2022, and increasing revenue 105% year-over-year;

 

  o

continued to aggressively expand the Company’s global distribution footprint through joint ventures, hard bundles and other partnerships with industry leaders, including a first-of-its kind partnership with Walmart to offer Paramount+ Essential to Walmart+ members;

 

  o

executed key platform, distribution, partnership and marketing agreements that furthered our long-term business strategy;

 

 

        

 

  

 

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  o

continued to maximize the Company’s strength in linear television and film, with CBS maintaining its position as America’s number one broadcast network in primetime; our portfolio of cable networks attracting mass audiences with hit content, including the most-watched show in the U.S. across all of television, Yellowstone; and Paramount Pictures releasing six films that opened number one at the domestic box office in 2022;

 

  o

prudently managed costs and improved operational efficiencies across the Company as we navigated the complex near-term macro environment; and

 

  o

led our efforts to develop a high-performing workforce, foster an inclusive workplace, and continue supporting the diverse communities and audiences that we serve.

 

   

Mr. Chopra and Mses. D’Alimonte, Lea and Phillips were key members of the senior management team.

 

  o

Mr. Chopra participated in and advised the senior management team and provided leadership of our finance, accounting, tax, treasury, investor relations, strategy and corporate development, technology and facilities and real estate functions, and continued to strengthen and streamline our finance organization and processes. Mr. Chopra revised our reporting segments and internal licensing to improve transparency and showcase our DTC streaming growth and profitability. Mr. Chopra also was instrumental in executing on our DTC streaming strategy and oversaw numerous initiatives to drive efficiencies and manage costs, including our efforts to prioritize content and marketing expenses and further refining our content monetization strategy. Mr. Chopra continues to be a strong advocate and voice in our inclusive, values-driven corporate culture, and during 2022 partnered with our Office of Global Inclusion and Human Resources teams to develop diverse talent pipelines for the finance-related functions reporting to him.

 

  o

Ms. D’Alimonte was a member of our senior management team and provided leadership of our global legal and compliance functions, providing expert counsel and sound judgement to the Board and senior management on a wide variety of matters, including commercial transactions and negotiations, litigation and dispute resolution, regulatory matters, and ongoing business counseling and advice. The Committee recognized that Ms. D’Alimonte provided strategic and legal guidance to our Board of Directors as it addressed complex issues relating to executive management, corporate governance and shareholder matters. Ms. D’Alimonte supported steady execution of our accelerated streaming strategy, and other strategic initiatives including content distribution partnerships and divestitures of non-core assets. She has also been a strong advocate for enabling a diverse, equitable and inclusive law department and Company as a whole.

 

  o

Ms. Lea participated in and advised the senior management team and provided leadership of our worldwide government relations function, overseeing the development and execution of our government relations strategy both domestically and internationally. Ms. Lea advocated public policy positions for the content distribution and film industries at the international, national, state, and local levels, worked extensively on television and film production tax credits and provided political, policy and regulatory expertise to our executives on a wide variety of issues, including continued regulatory advice with respect to federal, state and local rules and mandates pertaining to the COVID-19 pandemic.

 

  o

Ms. Phillips participated in and advised the senior management team and led our people strategy and operations. Ms. Phillips provided leadership of our human resources and security functions, including our talent acquisition, people development, people operations and total rewards strategies. In 2022, she managed several significant leadership and organizational changes, including the oversight of major workforce transformation initiatives and a new hiring process, both generating meaningful financial and operational benefits to the organization. Ms. Phillips was instrumental in the safe return of our people to the workplace, in a hybrid work model, and in continuing to work to create a high-performing, high-development organizational culture that is diverse, equitable and inclusive and that will serve as a competitive advantage for us. Her 2022 focus included expanding people leadership and employee development offerings, leading several workforce enablement initiatives to drive operational efficiencies (including the global launch of an integrated SAP platform and intranet) and undertaking efforts to further reinforce the linkage between pay and performance. Employee engagement continued to be a major focus area for Ms. Phillips and Paramount saw notable improvements in engagement, inclusion and wellbeing in 2022. Ms. Phillips continued to chair our COVID Task Force, which met regularly with experts and officials to stay abreast of best practice protocols that prioritized the safety of our workforce and enabled our

 

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  programming to remain in production throughout the year. In recognition of the accomplishments across Human Resources, Paramount was listed as one of the “2022 World’s Best Employers” by Forbes, based on survey data from more than 150,000 employees in 57 countries.

Based on the foregoing, the Committee approved the specific annual bonus amounts set forth in the table below and in the Summary Compensation Table for Fiscal Year 2022 under the “Non-Equity Incentive” column for each of the above NEOs.

 

NEO

  

Target

Award

   Preliminary
Bonus
Funding
Percentage
   Preliminary
Award
   Individual
Multiplier
   Final
Award

Robert M. Bakish

  

$12,400,000

  

86.5%

  

$10,726,000

  

120%

  

$12,871,200

Naveen Chopra

  

$  2,100,000

  

86.5%

  

$  1,816,500

  

115%

  

$  2,088,975

Christa A. D’Alimonte

  

$  1,687,500

  

86.5%

  

$  1,459,688

  

115%

  

$  1,678,641

Doretha F. Lea

  

$  1,000,000

  

86.5%

  

$     865,000

  

115%

  

$     994,750

Nancy Phillips

  

$     925,000

  

86.5%

  

$     800,125

  

115%

  

$     920,144

Fiscal Year 2023 Bonus Program

For 2023, the Committee determined to tailor certain performance metrics and weightings to better align with our evolving DTC streaming strategy and to continue driving and rewarding desired behaviors within our broader management team. The Committee determined to substitute DTC OIBDA in lieu of DTC Subscribers, reduce the weighting of consolidated Adjusted OIBDA from 25% to 20% and increase overall the combined weighting of both DTC metrics to account for 45% of the STIP funding pool (vs. 40% in the fiscal year 2022 design), with DTC OIBDA weighted at 15% and DTC Revenue weighted at 30%.

Long-Term Incentive Program

Long-Term Incentive Program (“LTIP”)

The LTIP is designed as a “pay-for-performance” vehicle to encourage executives to make decisions that will create and sustain long-term value for shareholders. It is also a vehicle used to retain talent and build executive ownership. Through our total compensation design, a significant portion of the total compensation opportunity for the NEOs is directly linked to stock price performance, with the goal of creating alignment with our shareholders. Eligibility to participate in the LTIP is generally limited to executives who have management responsibility.

The type and mix of equity-based vehicles used to deliver value varies primarily by an executive’s level in the organization and our business needs. The Committee considers the following objectives in determining the appropriate type and mix of equity-based vehicles:

 

   

Increased accountability for senior executives (Performance-Based Stock Awards): Motivate senior executives to focus on our performance through the achievement of pre-established financial goals over a designated period.

 

   

Retention of talent and alignment with shareholder interests in both up and down markets (Time-Based Stock Awards): Provide real retention value in the form of awards that are earned over a specified vesting period, with the value of awards tied to the value of our stock price.

The Committee discusses with management and ultimately approves the values, mix, and type of annual grants for senior executives, subject to the terms of an executive’s employment agreement. In determining the value, mix, and type of awards, the Committee takes into consideration the above objectives and the competitive assessment of total compensation reviewed by the independent compensation consultant and reviews the LTIP with its independent compensation consultant and senior management.

Fiscal Year 2022 LTIP Awards

As previously disclosed, the Committee approved fiscal year 2022 LTIP awards on February 10, 2022, with grants to be made effective on March 1, 2022, to eligible employees, including NEOs, in the form of time-vesting restricted share units

 

 

        

 

  

 

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(“TRSUs”) and PSUs. For 2022, the Committee determined to increase the portion of the LTIP award granted in PSUs from 25% to 50% for Mr. Bakish, our President and Chief Executive Officer, and from 25% to 35% for all other NEOs. The performance criteria for the PSUs granted in 2022 (“2022 PSUs”) is total shareholder return (“TSR”) performance against the companies in the S&P 500 (i.e., relative TSR) during a single three-year performance period commencing on March 1, 2022 and ending on February 28, 2025. The Committee determined relative TSR to be the appropriate performance criteria, finding that it would directly link a significant portion of our NEOs’ target compensation (12-25% in PSUs) to stock price performance while being a market-based measure. The Committee determined to transition to a single three-year performance period based on market practice among the Company’s peers. The price used for determining the number of TRSUs to be granted to each NEO was the average closing price for the 20-trading day period immediately preceding and including the March 1, 2022 grant date. For PSUs, the average closing price for the 20-trading day period immediately preceding and including the March 1, 2022 grant date was used in the Monte Carlo valuation model to determine the number of PSUs to be granted to each NEO.

Consistent with the 2021 LTIP grants, the number of shares of Paramount Class B Common Stock to be delivered following the performance period for the 2022 PSUs is as follows:

 

Achievement of TSR*

   Percentage of Target Shares Earned*
Less than the 25th Percentile    Award Forfeited
25th Percentile    80% of Target Award
50th Percentile    100% of Target Award
75th Percentile or greater    120% of Target Award

 

  *

Linear interpolation between points of TSR achievement

Dividend equivalents accrue on the shares underlying the PSUs and equal the value of regular cash dividends paid on the shares of our Class B Common Stock. Dividend equivalents are paid in cash, less applicable withholdings, when the PSUs vest. If the PSUs do not vest, then the dividend equivalents accrued on those PSUs are forfeited.

Performance Results for 2021 PSUs having a Performance Period ending November 30, 2022

As previously disclosed in our proxy statement filed in connection with our 2022 Annual Meeting of Stockholders, the Compensation Committee granted, effective November 30, 2020, PSU awards for fiscal year 2021 comprised of three tranches of PSUs (the “2021 PSUs”), each with a distinct performance period beginning on December 1, 2020 and ending on each of the 2nd, 3rd and 4th anniversaries of the grant date, respectively. The 2021 PSUs vest based on relative TSR achievement against the companies in the S&P 500, and the number of shares earned with respect to a performance period is determined in the same manner as described for the 2022 PSUs above. The relative TSR achievement for the 2021 PSU tranche having a 2-year performance period ending on November 30, 2022 was determined to be below the 25th percentile, resulting in forfeiture of the associated tranche. This forfeiture of the first 2021 PSU tranche demonstrates our pay-for-performance philosophy as no shares were earned for below-threshold performance.

Fiscal Year 2023 LTIP Awards

For 2023, the Committee determined to continue granting LTIP awards to NEOs in a combination of PSUs and TRSUs and in the same proportions as for fiscal year 2022. As part of its comprehensive annual review of our compensation programs, the Committee looks for opportunities to hone our compensation program to align further with our pay-for-performance philosophy and to remain competitive within our industry and the broader labor market. The Committee determined that the 2023 TRSU awards would vest ratably over three years (rather than ratably over four years) in order to better align with practice within the compensation benchmarking peer group. In addition, the Committee determined that the number of shares earned with respect to 2023 PSUs would be determined based on relative TSR achievement against a broad selection of companies in the media and entertainment, broadcast and cable television, advertising and digital advertising industries. The Committee believes that these companies generally face the same macroeconomic and industry challenges faced by the Company. The Committee also determined to adjust the payout scales for the 2023 PSUs such that 25th percentile relative TSR performance against the comparator group results in a 50% of target payout, 50th percentile relative TSR performance against the comparator group results in a 100% (i.e., target) payout, and 75th percentile or better relative TSR performance against the comparator group results in a 200% of target payout.

 

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Equity Award Grant Date Procedures

The grant date for equity awards is the date on which the Committee approves awards under the LTIP or, if so determined by the Committee, a future grant date, or a date specified in an employment agreement. The Committee may approve an award that will have a future grant date, with the exercise price of any stock option not to be less than the closing price of a share of our Class B Common Stock on the date of grant. We do not grant equity awards in anticipation of the release of material, non-public information. Similarly, we do not time the release of material, non-public information based on equity grant dates. We provide communications regarding individual grant awards, including the terms and conditions, to recipients as soon as administratively feasible.

The Committee approved annual management grants awarded for 2020 on September 24, 2019, with a grant date of November 1, 2019, annual management grants awarded for 2021 on October 21, 2020, with a grant date of November 30, 2020, and annual management grants awarded for 2022, on February 10, 2022, with a grant date of March 1, 2022. The Committee approved annual management grants for 2023 on February 9, 2023, with a grant date of March 1, 2023, and intends that future annual management grants will continue to have a grant date in the first quarter of the applicable fiscal year.

Other Terms for TRSUs

TRSUs granted prior to 2023 generally vest in equal annual installments over the four-year period following the date of grant. For a description of certain other material terms of the TRSUs, see “Grants of Plan-Based Awards During 2022 — Description of Plan-Based Awards.” As previously described, beginning in 2023, TRSUs will vest in equal annual installments over the three-year period following the date of grant.

Delegation of Authority with Respect to LTIP Awards

The Committee has delegated to the Chief Executive Officer limited authority, with respect to executives who are not, and are not reasonably expected to become, specified employees, (i) to grant long-term incentive awards under our long-term incentive plan to such executives in connection with their hiring, promotion, or contract renewal or for any other reason and (ii) to modify certain terms of outstanding equity grants in some post-termination circumstances. The Committee delegated this authority in order for the Chief Executive Officer to have the ability to (i) act in a timely manner in a competitive environment in connection with the hiring of new executives or the compensation of an existing executive being given a significant increase in responsibility and (ii) maintain flexibility to manage compensation in post-termination circumstances when mutually beneficial to us and the executive. The Committee’s delegation specifies the circumstances in which the authority may be used and limits the amount that may be awarded to an individual, the total amount that may be awarded in a given period, and, in certain circumstances, the aggregate incremental expense we may incur as a result of modifications to the terms of outstanding equity grants. The delegation also requires that the Chief Executive Officer report to the Committee periodically on his exercise of this delegated authority.

STOCK OWNERSHIP GUIDELINES

In order to further align the NEOs’ and other senior executives’ interests with those of our shareholders, we have established stock ownership guidelines. The guidelines provide that, within five years, starting in fiscal year 2007 for legacy CBS senior executives and May of 2018 for legacy Viacom senior executives or, if later, in the year in which a senior executive first becomes subject to the guidelines, the NEOs and certain other senior executives are expected to acquire and establish holdings in our stock equal in value to a multiple of their cash base (base salary less mandatory deferrals, if applicable), depending on their positions as follows:

 

Senior Executive

   Ownership Guideline Multiple

Chief Executive Officer

   6x cash base

Other Senior Executives

   1x to 3x cash base

All types of equity holdings, with the exception of stock options, are included in determining ownership. The Committee monitors compliance with these guidelines by receiving an annual progress report from senior management. During 2022, senior management reported to the Committee that all NEOs subject to the guidelines met the guidelines as applied to each of them at that time. The Committee continues to periodically monitor compliance with the guidelines.

 

 

        

 

  

 

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ANTI-HEDGING AND ANTI-PLEDGING POLICIES

We believe that engaging in short-term speculation in Paramount securities or personally profiting from a decline in our stock price would be, or may appear to be, inconsistent with the interests of our stockholders and the long-term value of the Company. Therefore, all employees, including our NEOs, are prohibited from (1) engaging in “short” sales of Company securities that they beneficially own and from buying or selling beneficial ownership of any Company-based derivative securities (such as “puts” and “calls”) that would result in receiving any gain or benefit if the price of the security declines, and (2) entering into any derivative transactions with respect to beneficial ownership of Company securities (including unvested equity compensation), including any short sale, forward, equity swap, option or collar that is based on our stock price.

We prohibit our executive officers, Section 16 officers, including our NEOs, and any other employees who report directly to our CEO from holding our securities in a margin account or pledging our securities (including using our securities as collateral for a loan). Our pledging policy applies to all shares held by persons subject to the policy, regardless of how such shares were obtained, and cannot be waived by pre-clearance.

OTHER BENEFITS AND PROGRAMS

Retirement and Deferred Compensation Plans

We provide active, eligible employees with the opportunity to build financial resources for retirement through our broad-based tax-qualified defined benefit and/or defined contribution plans. In addition, eligible executives participate in our nonqualified defined benefit and/or deferred compensation plans. In some instances, participants in these qualified and nonqualified plans may also have frozen benefits in other qualified and nonqualified plans. Information regarding the retirement and deferred compensation plans applicable to our NEOs is set forth in the narrative after the Pension Benefits in 2022 table and the Nonqualified Deferred Compensation in 2022 table.

All Other Compensation

We provide other compensation to participating employees by making employer contributions in 401(k) and excess 401(k) plans and by providing company-paid life insurance. Compensation paid to the NEOs in relation to these programs is included in the “All Other Compensation” column of the Summary Compensation Table for Fiscal Year 2022.

In certain instances, we provide executives with additional benefits that we believe are reasonable and typical for executives in similar industries and help us to attract and retain these executives. Among these benefits are transportation-related benefits, which we believe provide security, travel flexibility and efficiencies that result in a more productive use of the executive’s time, given the demands of his or her position. Information regarding the benefits described in this paragraph is included in footnote 6 to the “All Other Compensation” column of the Summary Compensation Table for Fiscal Year 2022.

Post-Termination Arrangements

Each of the NEOs is entitled to post-termination payments and benefits upon the occurrence of a termination without “cause” or a resignation for “good reason” and upon death or disability, as set forth in their respective employment agreements.

The terms of these payments and benefits, and the estimated potential payments that would be made to each NEO if his or her employment terminated as of the 2022 fiscal year-end for the applicable reasons noted above are described under “Potential Payments upon Termination and Certain Other Events.” In assessing post-termination payments and benefits in connection with senior executive employment arrangements, the Committee considers competitive practice with respect to comparable executives at peer companies as well as prevailing practice and trends with respect to other public companies that are relevant in terms of size and complexity. The objective of these payments and benefits is to recruit and retain talent in a competitive market and, as applicable, compensate executives for restrictive covenants and other obligations following a termination without “cause” or a resignation for “good reason.”

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Employment Contracts

All of the NEOs have employment contracts with us, as the Committee has considered it to be in our best interests, and as the best means, to secure the employment of each of these executives. The terms and provisions of these contracts are more fully described in the narrative section after the Summary Compensation Table for Fiscal Year 2022.

TAX CONSIDERATIONS

Section 162(m) of the Internal Revenue Code limits our ability to deduct compensation paid to our NEOs for U.S. federal income tax purposes, generally to $1 million per year. Further, once any of our employees is considered a “covered employee” under Section 162(m) of the Internal Revenue Code, that person will remain a “covered employee” so long as the person receives compensation from us. The Committee intends to continue to implement compensation programs that it believes are competitive and in the best interests of Paramount and our shareholders, even if not fully deductible.

 

 

        

 

  

 

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Compensation Committee Report

The following Compensation Committee Report does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate such information by reference.

The Compensation Committee of the Board of Directors of Paramount Global has reviewed and discussed with management the Compensation Discussion and Analysis (“CD&A”) included in this proxy statement. Based on this review and these discussions, the Compensation Committee has recommended to the Paramount Global Board of Directors that the CD&A be included in this proxy statement and incorporated by reference from this proxy statement into the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission on February 16, 2023.

Members of the Compensation Committee

Linda M. Griego

Judith A. McHale, Chair

Ronald L. Nelson

 

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Executive Compensation

SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 2022

The following table sets forth information concerning total compensation for fiscal years 2022, 2021 and 2020, as applicable, for our principal executive officer, principal financial officer and three other most highly compensated executive officers for fiscal year 2022 (the “NEOs”).

 

Name and

Principal Position

  Year    

Salary

($)

(1)

   

Bonus

($)

(2)

   

Stock

Awards

($)

(3)

   

Non-Equity
Incentive Plan
Compensation

($)

(4)

   

Change in Pension

Value and NQDC

Earnings

($)

(5)

   

All Other

Compensation

($)

(6)

   

Total

($)

 

Robert M. Bakish

President and Chief Executive

Officer; Director

    2022       3,100,000             15,999,979       12,871,200             74,827       32,046,006  
    2021       3,100,000                   16,828,412             106,800       20,035,212  
    2020       3,106,923             15,999,968       19,693,060       144,644       29,173       38,973,768  

Naveen Chopra(7)

EVP, Chief Financial Officer

    2022       1,400,000             2,999,976       2,088,975             21,582       6,510,533  
    2021       1,400,000                   2,648,205             20,757       4,068,962  
    2020       538,462       2,000,000       7,499,975       1,208,375             6,617       11,253,429  

Christa A. D’Alimonte

EVP, General Counsel and

Secretary

    2022       1,328,461             2,700,007       1,678,641             25,299       5,732,408  
    2021       1,250,000                   1,970,391             25,007       3,245,398  
    2020       1,260,952             2,187,451       2,481,484             23,717       5,953,604  

Doretha F. Lea

EVP, Global Public Policy and

Government Relations

    2022       931,961             750,003       994,750             37,033       2,713,747  
    2021       911,550                   1,149,510       2,049       25,722       2,088,831  
    2020       911,550             749,967       1,384,736       116,521       23,252       3,186,026  

Nancy Phillips

EVP, Chief People Officer

    2022       885,336             1,200,004       920,144             27,553       3,033,037  
    2021       787,500                   993,077             27,070       1,807,647  
    2020       787,211       540,000       999,957       1,250,668             22,927       3,600,763  

 

(1)

Salary includes amounts deferred under qualified and nonqualified arrangements for each of the NEOs. See the Nonqualified Deferred Compensation in 2022 table for further information on amounts deferred under nonqualified deferred compensation arrangements. Amounts for Mses. D’Alimonte, Lea and Phillips reflect base salary increases applicable from March 15, October 1, and April 11, 2022, respectively, through year-end 2022.

 

(2)

Amounts for Ms. Phillips and Mr. Chopra represent the applicable executive’s sign-on bonus amount paid pursuant to such executive’s letter agreement.

 

(3)

Amounts reflect the aggregate grant date fair values for TRSUs and PSUs determined in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in calculating the grant date fair value amounts for 2022, see Note 16 “Stock-Based Compensation” to the audited 2022 consolidated financial statements on pages II-85 to II-87 in our Annual Report on Form 10-K for the year ended December 31, 2022.

 

(4)

Amounts represent the amount of compensation earned by the applicable NEO under our 2022 annual performance-based bonus program. Consistent with our approach for other participants in our 2022 annual performance-based bonus program, bonus amounts were calculated using the individual’s salary as of year-end.

 

(5)

Amounts relate to changes in pension value only. None of our nonqualified deferred compensation plans for executives provide for above-market interest or preferential earnings. The change in pension value was negative for Mr. Bakish in 2021 and 2022 ($(12,822) and $(538,952), respectively) and Ms. Lea in 2022 ($(415,173)).

 

 

        

 

  

 

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EXECUTIVE COMPENSATION

 

(6)

The following table describes each component of the “All Other Compensation” column for 2022:

 

Named

Executive Officer

 

Company
Contribution
to 401(k)
Plans

($)(a)

   

Company
Contribution
to 401(k)
Excess Plan

($)(b)

   

Company
Contribution
to Profit
Sharing
Plan

($)(c)

   

Company
Paid Life
Insurance

($)(d)

    Perquisites and
Other Personal
Benefits
   

Total

($)

 
  Transportation-
Related
Benefits
($)(e)
 

Robert M. Bakish

    6,833             4,350       7,080       56,564       74,827  

Naveen Chopra

    15,250             4,350       1,982             21,582  

Christa A. D’Alimonte

    5,125       13,912       4,350       1,912             25,299  

Doretha F. Lea

    8,542       11,521       4,350       1,291       11,329     37,033  

Nancy Phillips

    14,643       7,250       4,350       1,310             27,553  

 

  (a)

Represents Company matching contributions made for 2022 under our 401(k) plan.

 

  (b)

Represents Company matching contributions made for 2022 under our excess 401(k) plan.

 

  (c)

Represents Company profit sharing contributions made for 2022 under our 401(k) plan.

 

  (d)

Represents premiums paid by us in 2022 for life insurance coverage.

 

  (e)

For Mr. Bakish, the amounts of perquisites and other personal benefits shown in this column reflect the personal use of a car and driver and/or personal use of car service, all provided for business-related security reasons. For Ms. Lea, the perquisites and other personal benefits shown in this column reflect certain commuting expenses.

 

(7)

Mr. Chopra became our Executive Vice President, Chief Financial Officer on August 10, 2020. Amounts reported for Mr. Chopra reflect compensation paid to him during the portion of 2020 for which he was employed by us.

Employment Agreements with NEOs

During fiscal year 2022, all NEOs had employment agreements that set forth the terms and conditions of their employment. The material terms of each of these agreements that are necessary to an understanding of the information provided in the Summary Compensation Table for Fiscal Year 2022 are provided below. See “Potential Payments Upon Termination and Certain Other Events” for a discussion of the severance payments and benefits for the NEOs in connection with a termination of their employment and, under “Compensation Discussion and Analysis,” the sections entitled “Annual Bonus Awards” and “Long-Term Incentive Program” for discussions of the terms of the bonus awards and equity awards.

Robert M. Bakish

On August 13, 2019, Viacom entered into an employment agreement with Mr. Bakish, pursuant to which, upon the closing of the merger of Viacom with and into CBS Corporation (the “Merger”) on December 4, 2019 (the “Closing Date”), he became our President and Chief Executive Officer. Mr. Bakish’s agreement had a four-year term that automatically extended for an additional year, to December 4, 2024, on the third anniversary of the Closing Date. The term of the agreement will continue to extend by one year automatically on each anniversary of the Closing Date unless either party gives a non-renewal notice at least 120 days before the applicable anniversary. The agreement provides for an annual base salary of $3.1 million per year, which shall be reviewed annually by the Compensation Committee and may be increased at the discretion of the Compensation Committee, and an annual target bonus opportunity of $12.4 million per year. Mr. Bakish is eligible to receive annual grants of equity compensation with an aggregate target value of $16 million. Pursuant to a letter agreement entered into in connection with Mr. Bakish’s employment agreement, he received a one-time grant of TRSUs with a grant date value of $5 million, vesting in equal installments on each of the first four anniversaries of the Closing Date. Mr. Bakish has not received a compensation increase since that time.

Mr. Bakish’s employment agreement contains certain restrictive covenants, including non-solicitation covenants, non-competition covenants, covenants prohibiting interference with business relationships and covenants protecting confidential information. The agreement also provides for severance payments and benefits in the event that his employment is terminated by us without “cause” or by him with “good reason,” or, in certain circumstances, following non-extension of his employment agreement.

 

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EXECUTIVE COMPENSATION

 

Naveen Chopra

On June 30, 2020, we entered into an employment agreement with Mr. Chopra, pursuant to which he became our Executive Vice President, Chief Financial Officer, effective August 10, 2020, as well as a letter agreement setting forth additional terms of Mr. Chopra’s compensation. The employment agreement has a three-year term and provides for an annual base salary of $1.4 million, to be reviewed annually by the Compensation Committee and increased at the discretion of the Compensation Committee, and an annual target bonus of 150% of his annual salary. With respect to fiscal year 2020, the employment agreement provides for Mr. Chopra to receive a guaranteed minimum annual bonus, subject to pro-ration based on Mr. Chopra’s start date. Mr. Chopra is eligible to receive annual grants of equity compensation with an aggregate target value of $3 million, beginning with the annual grant made for fiscal year 2022. Pursuant to a letter agreement entered into in connection with Mr. Chopra’s employment agreement (the “Chopra Letter Agreement”), Mr. Chopra received two grants of equity compensation on August 24, 2020 with grant date values of $3 million and $4.5 million, which were in lieu of a fiscal 2021 long-term equity incentive award and in consideration of forfeited compensation from his former employer, respectively. Pursuant to the Chopra Letter Agreement and as further consideration for forfeited compensation from his former employer, Mr. Chopra received a one-time sign-on cash bonus of $2 million, which was subject to repayment in the event of certain terminations of Mr. Chopra’s employment prior to August 10, 2022.

Mr. Chopra’s employment agreement contains certain restrictive covenants, including non-solicitation covenants, non-competition covenants, covenants prohibiting interference with business relationships and covenants protecting confidential information. The employment agreement also provides for severance payments and benefits in the event that Mr. Chopra’s employment is terminated by us without “cause” or by him with “good reason,” or, in certain circumstances, following non-extension of his employment agreement.

Christa A. D’Alimonte

On August 13, 2019, Viacom entered into an employment agreement with Ms. D’Alimonte, pursuant to which, upon the closing of the Merger, she became our Executive Vice President, General Counsel and Secretary. Ms. D’Alimonte’s agreement had a three-year term and provided for an annual base salary of $1.25 million per year, to be reviewed annually by the Compensation Committee and increased at the discretion of the Compensation Committee, and an annual target bonus opportunity of 125% of her annual base salary. Ms. D’Alimonte was eligible to receive annual grants of equity compensation with an aggregate target value of $2,187,500. On March 11, 2022, Ms. D’Alimonte and the Company entered into a new employment agreement extending the term of her employment through June 30, 2025, increasing her base salary to $1.35 million, effective March 15, 2022, and, beginning with fiscal year 2022, increasing the aggregate target grant date value of her annual equity compensation to $2.7 million. Consistent with our approach for other participants in our 2022 annual performance-based bonus program, Ms. D’Alimonte’s 2022 STIP amount was determined using her salary as of year-end.

Ms. D’Alimonte’s employment agreement contains certain restrictive covenants, including non-solicitation covenants, non-competition covenants, covenants prohibiting interference with business relationships and covenants protecting confidential information. The agreement also provides for severance payments and benefits in the event that her employment is terminated by us without “cause” or by her with “good reason,” or, in certain circumstances, following non-extension of her employment agreement.

Doretha F. Lea

On October 2, 2019, Viacom entered into an employment agreement with Ms. Lea, pursuant to which, upon the closing of the Merger, she became our Executive Vice President, Global Public Policy and Government Relations. Ms. Lea’s agreement had a three-year term and provided for an annual base salary of $911,550 per year, to be reviewed annually by the Compensation Committee and increased at the discretion of the Compensation Committee, and an annual target bonus opportunity of 100% of her annual base salary. Ms. Lea was eligible to receive annual grants of equity compensation with an aggregate target value of $750,000. On April 12, 2022, Ms. Lea and the Company entered into a new employment agreement extending the term of her employment through December 31, 2025, increasing her base salary to $1 million, effective October 1, 2022, and, beginning with fiscal year 2023, increasing the aggregate target grant date value of her annual equity compensation to $1 million. Consistent with our approach for other participants in our 2022 annual performance-based bonus program, Ms. Lea’s 2022 STIP amount was determined using her salary as of year-end.

 

 

        

 

  

 

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EXECUTIVE COMPENSATION

 

Ms. Lea’s employment agreement contains certain restrictive covenants, including non-solicitation covenants, non-competition covenants, covenants prohibiting interference with business relationships and covenants protecting confidential information. The agreement also provides for severance payments and benefits in the event that her employment is terminated by us without “cause” or by her with “good reason,” or, in certain circumstances, following non-extension of her employment agreement.

Nancy Phillips

On December 2, 2019, Viacom entered into an employment agreement with Ms. Phillips, pursuant to which, upon the closing of the Merger, she became our Executive Vice President, Chief People Officer. Ms. Phillips’ agreement had a three-year term and provided for an annual base salary of $750,000, to be reviewed annually by the Compensation Committee and increased at the discretion of the Compensation Committee, and an annual target bonus opportunity of 100% of her annual salary. Ms. Phillips was eligible to receive annual grants of equity compensation with an aggregate target grant date value of $1 million, beginning with the annual grant made for fiscal year 2021. Pursuant to a letter agreement entered into in connection with Ms. Phillips’ employment agreement (the “Phillips Letter Agreement”), she received a one-time grant of TRSUs on December 16, 2019, with a value of $1.75 million, in connection with commencement of her employment. This one-time grant vests over four years in equal annual installments. Also on December 16, 2019, pursuant to the Phillips Letter Agreement, Ms. Phillips received her fiscal year 2020 LTIP grant in the form of TRSUs with a value of $1.25 million, which was 125% of the annual long-term equity incentive target provided for in Ms. Phillips’ employment agreement at that time. This grant also vests over four years in equal annual installments. Ms. Phillips’ base salary was increased to $787,500, effective January 1, 2021, and, beginning with fiscal year 2022, the aggregate target grant date value of annual equity compensation for which she is eligible increased to $1.2 million. On April 12, 2022, Ms. Phillips and the Company entered into a new employment agreement extending the term of her employment through June 30, 2025 and increasing her base salary to $925,000, effective April 11, 2022. Consistent with our approach for other participants in our 2022 annual performance-based bonus program, Ms. Phillips’ 2022 STIP amount was determined using her salary as of year-end.

Ms. Phillips’ employment agreement contains certain restrictive covenants, including non-solicitation covenants, non-competition covenants, covenants prohibiting interference with business relationships and covenants protecting confidential information. The agreement also provides for severance payments and benefits in the event that her employment is terminated by us without “cause” or by her with “good reason,” or, in certain circumstances, following non-extension of her employment agreement.

 

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EXECUTIVE COMPENSATION

 

GRANTS OF PLAN-BASED AWARDS DURING 2022

The following table sets forth information concerning grants of awards under our incentive programs to the NEOs in fiscal year 2022. No option awards were granted to NEOs in fiscal year 2022.

 

Name

 

 

Grant

Date

 

   

Committee
Action

Date(1)

 

    Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards(2)
    Estimated Future
Payouts Under Equity
Incentive Plan Awards(3)
   

All Other
Stock
Awards:
Number of

Shares of
Stock or

   

Grant Date
Fair Value of
Stock and
Option
Awards

($)(5)

 

 
 

Threshold

($)

 

   

Target

($)

 

   

Maximum

($)

 

   

Threshold

(#)

 

   

Target

(#)

 

   

Maximum

(#)

 

   

Units

(#)(4)

 

 

Robert M. Bakish

    3/1/2022       2/10/2022                         213,049       266,311       319,574             7,999,983  
    3/1/2022       2/10/2022                                           247,985       7,999,996  
                      3,100,000       12,400,000       24,800,000                                

Naveen Chopra

    3/1/2022       2/10/2022                         27,963       34,953       41,944             1,049,988  
    3/1/2022       2/10/2022                                           60,446       1,949,988  
                      525,000       2,100,000       4,200,000                                

Christa A. D’Alimonte

    3/1/2022       2/10/2022                         25,167       31,458       37,750             944,998  
    3/1/2022       2/10/2022                                           54,402       1,755,009  
                      421,875       1,687,500       3,375,000                                

Doretha F. Lea

    3/1/2022       2/10/2022                         6,991       8,738       10,486             262,490  
    3/1/2022       2/10/2022                                           15,112       487,513  
                      250,000       1,000,000       2,000,000                                

Nancy Phillips

    3/1/2022       2/10/2022                         11,185       13,981       16,778             419,989  
    3/1/2022       2/10/2022                                           24,179       780,015  
                      231,250       925,000       1,850,000                                

 

(1)

The “Committee Action Date” refers to the date on which the Compensation Committee approved the grants reported in the table.

 

(2)

Amounts reflect the range of potential bonus payments for each NEO from threshold to maximum based on the NEO’s target opportunity under the STIP, with threshold, target and maximum payouts amounting to 25%, 100% and 200% of the applicable NEO’s target opportunity, respectively.

 

(3)

Amounts reflect the range of PSUs potentially earned by each NEO from threshold to maximum with respect to the PSU component of 2022 LTIP awards based on the NEO’s target number of PSUs, with threshold, target and maximum payouts amounting to 80%, 100% and 120% of the applicable NEO’s target PSUs, respectively. Amounts reflect the fair value on the date of grant, calculated in accordance with FASB ASC Topic 718.

 

(4)

Amounts reflect TRSU component of 2022 LTIP awards.

 

(5)

Amounts reflect the fair value on the date of grant, calculated in accordance with FASB ASC Topic 718.

Description of Plan-Based Awards

The Compensation Committee approved fiscal year 2022 LTIP awards on February 10, 2022, with grants to be made effective March 1, 2022, to eligible employees, including NEOs. The number of TRSUs awarded for fiscal year 2022 was determined by dividing the value of the award by the average closing price of a share of our Class B Common Stock over the 20-trading day period immediately preceding and including the grant date, and the target number of PSUs granted was determined by dividing the target value of the award by the grant date fair value determined using a Monte Carlo valuation model for the performance period.

For other terms of these awards relating to performance goals and grant dates, see “Compensation Discussion and Analysis — Long-Term Incentive Programs — Fiscal Year 2022 LTIP Awards” and “— Equity Award Grant Date Procedures.”

 

 

        

 

  

 

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EXECUTIVE COMPENSATION

 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2022

The following table sets forth the outstanding equity awards held by our NEOs on December 31, 2022, which included vested and unexercised stock options and unvested TRSUs and PSUs. Market values were calculated using the closing price of our Class B Common Stock on December 31, 2022, which was $16.88.

 

          Option Awards     Stock Awards  

Name

 

Grant

Date

    Number of
Securities
Underlying
Unexercised
Options —
Exercisable
(#)
   

Number of
Securities
Underlying
Unexercised
Options —
Unexercisable

(#)

   

Option
Exercise
Price

($)

    Option
Expiration
Date
   

Number
of Shares
or Units of
Stock

Held
That Have
Not Vested

(#)(1)

   

Market

Value
of Shares
or Units
of Stock

Held
that Have
Not Yet
Vested

($)

   

Equity
Incentive
Plan

Awards:
Number of
Unearned
Shares, Units
or Other
Rights
That Have
Not Yet
Vested

(#)(2)

   

Equity
Incentive
Plan

Awards:
Market or
Payout

Value of
Unearned
Shares,
Units or
Other

Rights
That Have
Not Yet
Vested

($)

 

Robert M. Bakish

    5/20/2015       43,641             110.56       5/20/2023                          
    5/18/2016       62,037             65.18       5/18/2024