Viacom extends contract with CEO

Philippe Dauman to stay through Dec. 2016

NEW YORK - Viacom Inc. said Thursday that president and CEO Philippe Dauman, 56, has signed a five-year contract extension that will keep him in place through Dec. 2016.

Dauman, an old confidant of chairman and controlling shareholder Sumner Redstone, first signed on as CEO in Sept. 2006 after Redstone looked for a new leader to replace Tom Freston. Dauman's previous contract ran through December 2011.

His new contract comes after Redstone-controlled CBS Corp. in February re-upped president and CEO Leslie Moonves through Feb. 2015. The two extensions are the latest sign that Redstone is comfortable with the heads of his two publicly traded media and entertainment giants and their performance. Redstone has a reputation for not being too patient with top executives since Freston's departure and the end of Redstone's partnership with Mel Karmazin after they merged CBS and Viacom a decade ago.

Under the terms of his new employment contract, most of Dauman's compensation will remain performance-based, meaning it will be tied to Viacom's ability to reach certain financial and operational targets.

While some critics on Wall Street have at times called for a different leadership for the company, Viacom's board cited Dauman's "strong operational and financial leadership," the company said in a statement, highlighting higher operating free cash flow in 2009, among other things. It also pointed out that Viacom shares have outperformed most of its large media peers since the start of 2009.

"Philippe is a great leader who has demonstrated an extraordinary and consistent ability to deliver results for all Viacom shareholders," said Redstone. Phillipe has strengthened Viacom's iconic entertainment brands, increased efficiency in every area, profitably extended our worldwide footprint and forged significant long-term agreements with distribution and other partners." He repeated previous comments that Dauman has revived Viacom's creative spirit and content power.

Dauman predicted a "bright future" for Viacom and its shareholders and vowed the company will "fully realize our unlimited potential."