Saturday, January 23, 2016

Viacom Cuts Redstone Pay, Judge Orders Med Exam

Sumner Redstone
By Ross Kerber

BOSTON (Reuters) - Viacom Inc said on Friday it cut the total pay of its 92-year-old Executive Chairman Sumner Redstone by 85 percent to $2 million last year in light of his "reduced responsibilities" and that it had raised the pay of Viacom Chief Executive Philippe Dauman.

In a securities filing, the media company said the total compensation of Dauman rose to $54.2 million for the fiscal year ended Sept. 30, 2015, up from $44.3 million in the previous period, driven by a contract renewal award. The company's shares fell 44 percent during the period.

Viacom, whose networks include Comedy Central, MTV and Nickelodeon, has faced ratings challenges, cord-cutting by cable TV consumers, and growing concerns about the health of Redstone, its founder, and his fitness to oversee the company.

Even as the company was issuing its annual proxy filing, a California judge ruled on Friday that Redstone could be examined by a doctor hired by his ex-girlfriend in a dispute over his mental competency.

Also, a recent lawsuit claims that Viacom and CBS Corp,  where Redstone is also executive chairman, improperly paid millions for Redstone's services even though he was "incapacitated".

Viacom's filing did not describe how Redstone's responsibilities had been reduced, and a company spokesman said on Friday that he did not have more details.

Viacom had outlined some of the pay changes on Jan. 20, but it had not said that Redstone's duties had been decreased or that Dauman would get a pay increase overall.

Redstone's new role meant he was no longer eligible to receive a bonus, which was $10 million in the previous fiscal year, Viacom said. Redstone's annual salary rose to $2 million in fiscal 2015 from $1,935,577 the prior year.

Viacom said in the filing that for fiscal 2015 the total pay of Chief Operating Officer Thomas Dooley fell to $29.4 million from $35 million in the prior year. Dooley's employment agreement is due  to expire at the end of this year, which has raised questions about whether he will stay with the company.

CEO Dauman's pay last year included a stock award worth $17 million tied to the renewal of his contract. Dauman's bonus was $14 million, down from $20 million the prior year, while Dooley's bonus was $11.2 million, down from $16 million in the prior year.

Viacom said both executives had requested that their bonus payments be reduced so money could be shifted to increase incentive payments at the company's operating units.

While Redstone controls a supermajority of the company's Class A voting shares through his holding company, National Amusements, his health situation and the company's high executive pay have led to questions about its corporate governance.

As expected, Friday's filing included a shareholder proposal calling for the company to recapitalize itself so that all shares would have an equal vote. Viacom said it opposes the measure because its current capital structure protects it from disruptive activist challenges and that Redstone's holding company would vote against it, ensuring it cannot pass.

(Reporting by Ross Kerber in Boston Additional reporting by Jessica Toonkel in New York. Editing by Peter Henderson and)

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