Under the terms of the agreement, Moonves' salary remains at its current level.
Moonves got a pay raise in 2016 to $69.6 million, an increase of 22% from 2015, according to Variety.
The extension also provides for him to become a senior advisor to the firm for an additional five years.
Moonves first came to CBS in 1995 as president of entertainment and was named CEO in 2006.
Shares of CBS were higher during afternoon trading on Friday.
Over on Real Money Jim Cramer gives advice to investors looking at how to play the Trump Trade. Get his insights or analysis with a free trial subscription to Real Money.