Viacom on Saturday formally announced the deal ending the battle over the media company, with the Sumner and Shari Redstone in control and CEO Philippe Dauman stepping down.
The agreement, ratified by Viacom directors late Thursday, ends lawsuits in three states between the Redstones, whose family holding company National Amusements holds 80% of the voting stock, and Dauman and other Viacom directors.
COO Thomas Dooley was named interim CEO through the end of the fiscal year on Sept. 30 and National Amusements will be adding five directors to Viacom’s board.
“We thank Philippe for his many years of dedicated service and the important role he has played at Viacom. We also welcome the new Board members who join us today,” Shari Redstone said in a statement. “By strengthening Viacom’s governance and leadership, these changes will enable the Company to embark swiftly on a strategy that strengthens its position as an industry leader. Viacom has extraordinary assets and people, and we look forward to taking the necessary steps to realize the Company’s full potential to the benefit of all stockholders.”
Viacom’s stock hit new lows earlier this year. With the battle for control holding out promise of a management change, the shares have trended up over the last few weeks.
Redstone had made moves to remove Dauman a long-time trusted advisor and confidante, and other Viacom directors, from the Viacom board. Redstone also attempted to remove Dauman as a director of National Amusement and as a trustee of the trust that will control his media assets after he dies or is deemed mentally incompetent to make decisions.
Dauman and other Viacom directors challenged the removals, charging that Redstone was incompetent and under the undue influence of his daughter Shari Redstone.
“With the resolution of these issues, I am looking forward to working closely with the Board to develop a strategy to position Viacom for growth and success,” said Dooley. “ I have very much enjoyed partnering with Philippe over many years and am grateful for the opportunities that have been presented to me by the Redstone family. We share a strong commitment to Viacom’s future and to guiding the Company through an orderly and successful transition.”
Under the plan, the board will make decisions on succession by the end of Viacom’s fiscal year in September. Until then Dooley will work with the board to develop a financial and strategic plan to fix Viacom.
Sumner Redstone remains chairman Emeritus and Shari Redstone will remain non-executive vice chairman
The five new Viacom Board members elected by NAI are Kenneth Lerer, Thomas May, Judith McHale, Ron Nelson and Nicole Seligman.. Seligman will head the Governance and Nominating Committee,. Nelson will head the Audit Committee and. McHale will head the Compensation Committee. The five new directors elected to the Viacom Board will comprise a majority of each committee, solidifying the Redstones control over the company.
Dauman will remain as non-executive chairman through Sept. 13. He is being allowed to present his plan to sell a 49% stake in Paramount Pictures. The plan would have to be approved unanimously by the board to be adopted.
Dauman will leave with a golden parachute valued at $72 million.
“I care deeply for Viacom, which has been an important part of my life since I joined Sumner in the acquisition of the Company 30 years ago. I believe this agreement will give the Company and its employees the best opportunity to continue a smooth evolution into the future. I will do my utmost to ensure an effective Board and management transition in my remaining time as Non-Executive Chairman,” Dauman said.
“It has been a privilege to lead Viacom and have the rare opportunity to work side by side with so many friends and colleagues to build great brands and implement successful initiatives in the U.S. and around the world. Most of all, I am proud of our people, our culture and our inclusive values,” Dauman said.
Viacom has been one of the most poorly performing media stocks in the past year with its cable network ratings in decline, ad revenues falling and its Paramount movie studio underperforming. Critics blamed Dauman for buying back stock rather than invest in the digital businesses that were stealing viewers from MTV and Nickelodeon.