Next week’s Paramount Global shareholder meeting is set to be more than routine. The merger with Skydance remains stalled due to pending FCC approval and silence from the Trump administration. Meanwhile, proxy adviser ISS is calling for accountability at the top.
ISS has recommended shareholders vote against the re-election of Shari Redstone and three other board members: Barbara Byrne, Linda Griego, and Susan Schuman. The firm cited concerns over Paramount’s dual-class capital structure and executive pay practices. It’s a direct challenge to the status quo, even if the outcome is largely symbolic given Redstone’s control through National Amusements.
Here’s the breakdown:
- Governance Issues: ISS flagged Paramount’s “problematic capital structure,” specifically the unequal voting rights attached to different classes of shares. The firm continues to push for a one-share, one-vote system, which is considered industry best practice and has long been resisted by Paramount.
- Executive Pay: ISS criticized Paramount’s long-term incentive plans, pointing to time-vesting awards and high bonus payouts tied to individual performance. In 2024, each of the company’s three co-CEOs received a $6 million bonus, on top of a $2.75 million base salary and severance protections that trigger if they are demoted.
- Board Turnover: Judith McHale, who chairs the compensation committee, is not standing for re-election. Paramount has nominated three new board members: Mary Boies, Charles E. Ryan, and Roanne Sragow Licht. ISS has endorsed all three.
The broader context is that these governance concerns are emerging just as Paramount tries to finalize its $8.4 billion merger with Skydance. The FCC has not explained the delay, and President Trump’s recent public comments suggest a personal grudge may be at play. His $20 billion lawsuit against CBS, stemming from a “60 Minutes” interview with then-VP Kamala Harris, remains unresolved. Paramount has called the suit meritless but has entered into settlement discussions.
If the merger closes, Redstone will exit the board, and Skydance CEO David Ellison will take over as CEO and chairman. Until then, Paramount’s leadership and governance structure remain under scrutiny.
