Viacom Directors Question Latest Redstone Action

Viacom board eliminated mogul’s compensation
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Viacom directors said they haven’t heard from controlling shareholder Sumner Redstone and questioned his decision to diminish Viacom CEO Philippe Dauman’s role in his affairs.

Dauman and another long-time Viacom director, George Abrams, were removed as trustee of the trust that will oversee Redstone’s assets when the 92-year-old dies or is judged incompetent to make decisions on his own.

The move appears to put Redstone’s daughter Shari Redstone in position to control National Amusements, the family company that holds Redstone’s stake in Viacom and CBS.

Frederic Salerno, the lead independent director of Viacom, noted that Sumner Redstone’s role at the company has been diminished and that in the best interest of all shareholders, Redstone’s compensation has been eliminated.

Salerno said there has been a “complete lack of communication” from Redstone with the board. He also that he and the chair of Viacom’s governance and nominating committee, have been denied access to Sumner for a face to face meeting.

Abrams, an attorney, said he’s known and represented Redstone for more than 50 years and called him a friend.

”The Sumner Redstone I knew would never have taken this action.  What is going on now is unsettling and sad,” Abrams said in a statement.

Here are the statements of Salreno and Abrams:

Statement from Frederic Salerno, Lead Independent Director of Viacom:

“In March, the Board of Viacom elected me to serve as Lead Independent Director to ensure a continuation of good governance at Viacom, particularly as a result of Sumner Redstone’s diminished role.

‘The majority of the full Board and every Board Committee is comprised of independent directors and we are completely focused on ensuring that the interests of all shareholders are considered and fully protected. The Board has taken a number of steps including, most recently, eliminating Mr. Redstone's compensation.  We took this action based upon his recent complete lack of communication with the Viacom Board and management team and his silence during recent board meetings, as well as recent public disclosures raising concerns about his health.  In addition, despite numerous requests, I, along with the Chair of Viacom’s Governance and Nominating Committee, have been denied access to Sumner for a face-to-face meeting.

The Independent Directors are fully engaged and will carefully monitor actions at National Amusements, which is the controlling shareholder of Viacom. We are also continuing to work closely with the management team of Viacom and we fully endorse the strategy for the future of Viacom that the team presented at the Board’s day-long strategy meeting this week.

We have great respect for Sumner and what he has accomplished. Our overarching duty is to represent the interests of all shareholders — in the same spirit that Sumner Redstone always led our Board to do.  We will continue to fulfill that role and uphold our fiduciary responsibility to ensure that Viacom’s interests are protected in concert with good governance practices.”

Statement from Viacom Director George Abrams:

“I have known and represented Sumner Redstone for over 50 years.  I worked closely with him on the building of his theater chain, the acquisitions of Viacom, Paramount and CBS and countless business matters relating to all three of those entities as well as National Amusements.  I have also handled many personal matters for Sumner.  Above all, he is my friend.  The Sumner Redstone I knew would never have taken this action.  What is going on now is unsettling and sad.”  

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