Is New York eyeing Leslie Moonves?
At the risk of being a bit too critical as I head off on vacation to an island in Maine where I’ll have no email access, I couldn’t help but wonder about this post from the new Silicon Valley Insider blog on Leslie Moonves’ new contract at CBS (CBS). That’s because the blog is run by former DoubleClick executive Kevin Ryan and former Internet analyst Henry Blodget, two people who ought to be familiar with reading SEC filings. Yet, Blodget only seemed to read the summary before poking at the contract.
So what does Moonves’ contract actually say? The new contract makes clear who’s boss:
Other than Sumner M. Redstone, the Executive Chairman and Founder, you will be the highest ranking executive of CBS.
There’s also the interesting bit about being reimbursed for his New York City (and state) taxes and an equally intriguing part about what happens if Moonves is audited by either the city or the state:
“You shall promptly notify CBS of any New York State or Local taxing authority’s assertion during an audit respecting any payment by CBS, respecting incremental New York State and Local taxes and fees, on your behalf or reimbursement to you, but you shall be under no obligation to defend against such claim by the New York State or Local taxing authority unless CBS requests, in writing, that you undertake the defense of such claim on behalf of CBS and at CBS’s sole expense.”
Now, I’m no CPA, but I do read a lot of employment contracts and the language is odd enough to make you wonder if Moonves is being audited by either NYC or the state for his cross-country employment. Of course, that also seems odd, because Moonves is hardly the only executive to live in one place and work in another. Any CPAs out there who care to hazard a guess on this one?
There ought to be some good filings later today, and probably even better ones next Friday, since judging by the number of “I’m on vacation” emails I’ve been getting, just about everyone has left, which makes the conditions just about perfect. Today, I join all of those folks and head off to my own vacation. But my regular substitute, who because he has a day job prefers to remain anonymous, will continue to post. I’ll be back on Sept. 4.
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August 24th, 2007 at 9:59 am
If Mr. Moonves lives in California (which seems to be according to your post), he could be audited by New York. The State of New York has recently asserted in several cases that employees working in other states for companies located in New York have to pay New York income taxes on their full income. Many of these cases have been related to telecommuting employees, but if Mr. Moonves is the only employee of CBS in California and is working there for his convenience rather than the convenience of CBS, it is possible that he is in New York’s crosshairs.
Or, he has a good lawyer that has heard about these cases and wants to make sure he doesn’t get caught up in them.
September 7th, 2007 at 9:54 am
I agree with Mr. Walsh. New York is notoroius for its aggressive stance on taxing non-resident commuters.
California is permitted to tax Mr. Moonves on all of his income (assuming he lives in California), but New York can tax Moonves on income “sourced” or earned in New York. New York’s extraordinarily expansive view on what income is “sourced” to New York is well known in the tax-nerd world, and my guess is that is what Moonves is trying to avoid.