Intellectual Property

Even by the mundane standards of the TV-station business, CBS’ Fred Reynolds is about as low-key an executive as they come, barely recognizable even to many industry insiders. By contrast, even among the ranks of audacious network bosses, few are as brash as Fox News Chairman Roger Ailes. But both executives offer a good lesson on the lengths to which company leaders need to go to keep the right people.

CBS Chairman Les Moonves brought Station Group President Fred Reynolds back into the fold last week, a month after Reynolds resigned when he accepted the position of COO of private-equity firm Evercore Partners. His resignation was a blow, as Moonves was counting on Reynolds to become CFO of CBS when the unit spins off from Viacom Inc. next year.

On the same day as Reynolds’ return, News Corp. Chairman Rupert Murdoch rewarded one of his favorite—and best-compensated—executives, Ailes. (The Fox News chief made $7.6 million last fiscal year.) Murdoch dramatically expanded Ailes’ turf, putting him in charge of the Fox stations group, which generates $2.5 billion in revenue.

Providing Upside 

Murdoch couldn’t persuade his son to stay—Lachlan quit as station-group chief and New York Post publisher three weeks ago—but that has more to do with Murdoch’s family issues than with his ability to manage executive talent.

Key talent stays at the company only as long as they are engaged. “You have to continue to provide upside,” says Bill Simon, chief of the media and entertainment practice at giant headhunter Korn/Ferry International.

Simon is on the opposite side of the retention fight, skilled at identifying ambitious executives who can be lured away from their current corporate slots. While a big payday is an essential part of the mix, Simon says, money alone is rarely enough to either keep someone happy or make him or her jump: “They want new challenges, growth opportunities and ways to use their intelligence.”

Michael Wolf, managing partner of McKinsey & Co.’s media practice, concurs. “More and more, senior executive talent wants to be treated as if they’re owners,” he says. “The issue here is giving them a very, very large stake in the outcome. It means control—and the ability to shape their own destiny.”

“Viaslow” vs. “Viagrow”

Reynolds, the finance executive, isn’t as prominent a member of the Moonves entourage as CBS entertainment executives Nancy Tellem or Nina Tassler, who followed Moonves from Warner Bros. Nevertheless, Reynolds has been an ally ever since Westinghouse—where he was CFO—first bought CBS in 1995, and he became more so after then-Viacom President Mel Karmazin put him in charge of the CBS station group in 2001.

Although he was never actually offered the job, no one doubts that Reynolds was destined to become Moonves’ CFO once the CBS spinoff was complete.

But Reynolds got itchy. He describes himself as a deal guy, helping engineer the initial CBS deal, then later takeovers of King World and Infinity Broadcasting. Associates on Wall Street say he doesn’t see much dealmaking in CBS’ future. The whole purpose of the spinoff is to lump all of Viacom’s slow-growing businesses together, load 65% of Viacom’s debt on the new company, then spin it off.

CBS’ spare cash is slated largely to service debt and pay shareholders fatter dividends, earning the publicly traded spinoff the nickname “ViaSlow.” The newly MTV-centric Viacom, or “ViaGrow,” by contrast, would be flexible and more prone to cutting deals.

Reynolds dismisses that assessment as too simplistic. It’s not that he sees CBS as limiting. He just saw in Evercore a challenge to orchestrate all kinds of financial engineering in the investment firm’s portfolio. Chairman Roger Altman has been Reynolds’ primary investment banker for years, a man Reynolds calls “my idol.” When he asked Reynolds to be a partner rather than a client, says the CBS executive, it was an easy move.

But he caught Moonves off guard, informing him after he had already made his decision. Now, Moonves is a world-class schmoozer. I’ve seen him in action only when he didn’t particularly want much from me. I can’t fathom what he’s like in full courtship mode.

In Reynolds’ case, Moonves unleashed “a tsunami of Jewish guilt,” says Reynolds, who had already cleared out his office and shipped boxes over to Evercore.

Reynolds’ hot button: “I lost sight of how important these deep, deep relationships I have here are. It’s my family, it’s where I spend my time.”

And while Reynolds’ new CBS deal is better than his old one, Moonves did not match Evercore’s pay package (believed to be $10 million). Without offering details, Reynolds notes that “media pays well, but investment banking pays really, really well.”

So despite all the money offered by Evercore, he decided to stick around at CBS. Good for Moonves that he runs the kind of shop where Reynolds would choose that path—and for going the extra mile to keep him.

Bully Pulpit

At News Corp., Murdoch has made sure Ailes feels the love. At 65 and in charge of the best bully pulpit in America, he wasn’t going anywhere, and he coyly says that he didn’t ask for the job.

But Ailes had been angling for greater reach. Last year, he successfully lobbied to install Fox News exec Jack Abernethy as president of the slow-growing TV group. He has also stretched creatively by generating ideas for late-night and morning programs.

When media companies’ best assets go down the elevator each evening, CEOs have to make sure the right ones come back up. Playboy Lachlan Murdoch was readily replaceable. Disciplined dealmaker Fred Reynolds was not. Neither is Ailes.

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