Report: Redstones are wrangling
EmptyPublished reports of a developing rift between Viacom Inc. and CBS Corp. chairman Sumner Redstone and daughter Shari, who is vice chair at both companies, didn't bother Wall Street on Thursday, where Viacom shares that had gone nowhere for months rose 3%.
The father and daughter are reportedly feuding over the younger Redstone's efforts to tie executive compensation more closely to performance, an idea perhaps spurred by the $59 million that Tom Freston was paid when he was forced from his Viacom CEO perch last year.
Freston was made Viacom CEO in 2005 after CBS and Viacom were split into separately traded entities, with Les Moonves heading CBS. Under Freston's watch, Viacom stock headed steadily south.
According to the Wall Street Journal, which cited an unidentified source, things have gotten so contentious between the Redstones that she could be negotiating her resignation from the CBS and Viacom boards.
Company executives did not return phone calls Thursday.
Wall Street's enthusiastic response to the leak of their relationship rift could have the effect of sending Viacom's board a message that Shari Redstone, considered Sumner Redstone's heir apparent, might not be the best choice for assuming her 84-year-old father's role when the time comes.
Published reports speculate that Shari Redstone could be seeking an arrangement similar to the one given her brother Brent when he sued their father in a dispute over National Amusements, then owned by all three. National Amusements is privately held and owns movie theaters and, because of its voting stock in both, is considered the parent of Viacom and CBS.
The settling of that suit gave Brent access to money that had been locked up in National Amusements while Shari Redstone got 20% of the company and Sumner Redstone the remaining 80%. Shari Redstone is president of National Amusements.