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Viacom on Thursday named a new executive chairman to replace Sumner Redstone: president and CEO Philippe Dauman.
He takes on the added title while Redstone becomes chairman emeritus. The board offered Shari Redstone the role of non-executive chairman, but she declined and will continue in her role as non-executive vice chair.
The news from the conglomerate, whose assets include MTV, Nickelodeon and Paramount Pictures, came Thursday after a board meeting that started around 10 a.m. ET.
On Wednesday, CBS Corp. named president and CEO Leslie Moonves chairman with Redstone becoming chairman emeritus. The chair role also had been offered to vice chair Shari, the daughter of Redstone who has also been serving as Viacom vice chair, but she declined it, saying it should go to someone not involved in family matters. Sumner Redstone controls 80 percent of Viacom and CBS via holding company National Amusements.
“Sumner Redstone’s contributions to Viacom and the media industry are legendary,” said William Schwartz of the law firm of Cadwalader Wickersham & Taft and chairman of the governance and nominating committee of Viacom’s board. “He has successfully led Viacom with a dedication to building a global business for the benefit of all shareholders. On behalf of the Viacom board, his colleagues and all our shareholders, we want to thank Sumner for his vision and leadership. There is no one who loves this company more, and we will continue to be inspired by his wisdom in the years to come.”
Of Dauman, Schwartz said: “Philippe has been instrumental with Sumner in every aspect of Viacom’s success for nearly 30 years and most recently as CEO has taken on the tough task of navigating our future in a time of unprecedented innovation and disruption. He has laid out a strategic long-term vision for the company that we fully endorse. We have complete confidence that his dedication to Viacom, his global experience and his determination to further our culture of creativity and innovation will continue to serve the interests of all shareholders and build long-term value.”
Schwartz added: “In choosing a successor to Sumner, the board considered the need for seasoned leadership in this time of unprecedented change, Philippe’s business experience and unparalleled knowledge of Viacom, and his long-term vision for the company. We believe his becoming executive chairman is in the best interests of the company and all shareholders.”
Said Dauman: “I am honored to succeed my friend and longtime colleague Sumner in the role of executive chairman. His steadfast belief in our company and the power of entertainment will always be an inspiration for me and I look forward to carrying forward his leadership role as a champion for all shareholders. I am gratified by the continued confidence and support of the board of directors and all of my colleagues at Viacom whose creativity and unrelenting hard work is evident in our recent successes across the company.”
In an unusual move, Viacom announced Thursday’s board meeting late Wednesday after the CBS news. Shari Redstone suggested that Dauman shouldn’t become Viacom chairman, saying no trustee of her father’s trust and no one “otherwise intertwined in Redstone family matters” should lead the CBS and Viacom boards. Shari and Dauman both sit on the seven-person trust board, which will assume control of Sumner Redstone’s holdings whenever he is no longer able to do so himself.
Amid Wednesday’s developments, activist Viacom shareholder SpringOwl again called for a change at the top, saying: “We strongly urge management and the board to appoint an independent director as executive chairman and that it not be Philippe Dauman.”
Dauman, 61, has a contract that runs through 2018, with the latest two-year extension coming a year ago. A longtime confidant of Sumner Redstone’s, Dauman has been a Viacom board member since 1987 and was named CEO in September 2006, shortly after the company split from CBS. Redstone has often called Dauman one of the “wisest” men he has ever met.
Viacom raised eyebrows in January when it revealed a raise for Dauman for the latest fiscal year. His $54.2 million in compensation was up 22 percent even as the company’s stock plunged more than 40 percent.
Viacom and its future have been the topic of much debate as of late amid Redstone’s weakened health. Among Viacom’s current challenges: a court fight over the mental capacity of Sumner Redstone, a shareholder lawsuit accusing the company’s board of failing in its duties, and criticism from SpringOwl about the company’s financial performance amid ratings and advertising challenges.
Redstone didn’t appear at last year’s annual meeting of Viacom and hasn’t actively participated in an earnings conference call over the past year.
Viacom’s stock opened higher on Thursday before the board meeting started. As of 9:50 a.m. ET, it was up 5.8 percent at $47.24. As of 11:20 a.m. ET, it was up only 0.5 percent.
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