Paramount's $148 Million CEO Payroll: A Reward for Performance or a Risky Gamble?

The entertainment industry has long been a hotbed of high-stakes compensation, but Paramount Global’s 2024 executive pay disclosures have set a new benchmark. The company paid its former CEO and three co-CEOs a staggering $148 million combined, a figure that has sparked debate over whether this reflects justified rewards for success or reckless spending amid operational upheaval.

The CEO Pay Breakdown: A Severance Splurge and Shared Leadership Bonuses

The compensation figures reveal stark contrasts in outcomes for Paramount’s leadership. Former CEO Bob Bakish received $86.96 million in 2024, including a $69.3 million severance package after being ousted in April . His payout included accelerated equity awards, continued bonuses, and benefits, even as he transitioned to an “advisory role” until October. Meanwhile, the trio of co-CEOs—George Cheeks, Chris McCarthy, and Brian Robbins—each pocketed between $19.48 million and $22.15 million, with bonuses tied to their roles in the newly created Office of the CEO.

The co-CEOs’ compensation included $6 million bonuses for assuming leadership during a period of massive change, including layoffs, asset sales, and a contentious merger with Skydance Media. Their pay packages also featured stock awards, with McCarthy, Cheeks, and Robbins each receiving $8 million+ in equity grants, a nod to their long-term stake in the company’s success.

Performance Metrics: A Mixed Bag of Growth and Uncertainty

Paramount’s leadership claims its compensation decisions align with quantifiable achievements:
- Paramount+ added 10 million subscribers in 2024, hitting 77.5 million total subscribers, a 15% increase.
- Five Paramount Pictures films, including Mean Girls and Sonic the Hedgehog 3, topped domestic box office charts.
- Cost-cutting efforts delivered $500 million in annualized savings via layoffs and asset sales, such as the divestiture of Viacom18.

However, the company’s stock price has struggled.

Regulatory and Legal Headwinds: A Merger on Thin Ice

Despite these gains, Paramount faces significant hurdles. Its merger with Skydance Media, controlled by Shari Redstone’s National Amusements, remains pending FCC approval. The agency, under Chair Brendan Carr, has aggressively pushed media companies to abandon DEI initiatives—a stance that could complicate Paramount’s content strategy.

Adding to the pressure is Donald Trump’s $20 billion lawsuit against Paramount, alleging bias in CBS News’ reporting. While Paramount insists the lawsuit is unrelated to the FCC merger review, the dual challenges create operational and reputational risks.

The Bottom Line: Rewarding Risk or Investing in Resilience?

The $148 million CEO payout raises critical questions for investors:
1. Value for Money? The co-CEOs’ bonuses were tied to measurable goals like subscriber growth and cost savings. However, Bakish’s severance—a 180% increase from his 2023 pay—seems excessive given his abrupt exit.
2. Merger Uncertainty: The Skydance deal’s fate hinges on FCC approval, which could be delayed until mid-2025. If it collapses, Paramount’s valuation could plummet.
3. Stock Performance Lag: Despite cost cuts, PARA’s stock underperforms peers like Netflix and Disney, suggesting investors are skeptical of its long-term strategy.

Conclusion: A High-Reward, High-Risk Play

Paramount’s 2024 compensation decisions reflect a company betting big on leadership continuity amid transformative challenges. The co-CEOs’ achievements—driving streaming growth and cost discipline—support their pay hikes. However, the $148 million total is a hard sell without clarity on the Skydance merger and resolution of the Trump lawsuit.

Investors should weigh Paramount’s 77.5 million subscribers and $500 million in annual savings against the $500 million+ in legal and regulatory risks tied to unresolved lawsuits and FCC scrutiny. While the stock’s current valuation offers potential upside, the path to profitability hinges on executing the merger and navigating political headwinds. For now, Paramount’s CEO paychecks signal confidence—but the market is waiting to see if that confidence is justified.

Data as of October 2024. Past performance does not guarantee future results.