In a recent news release, Viacom, Inc. (NASDAQ: VIA; VIAB) announced an agreement with National Amusements, Inc. (“NAI”), a privately-owned American theater company and member of the Redstone media empire, settling all disputes between the two parties. Per the terms of the settlement, which has been unanimously approved by the boards of both companies, all outstanding lawsuits between them will be terminated. Additionally, Viacom has agreed to expand its board of directors to include five additional directors elected in June by NAI, including Kenneth Lerer, Thomas May, Judith McHale, Ron Nelson and Nicole Seligman. Moving forward, Seligman will head the company’s governance and nominating committee, Nelson will head its audit committee and McHale will head its compensation committee. The five new directors will comprise a majority of each of these committees.
Perhaps the biggest shakeup delivered by the newly-announced agreement was the immediate resignation of Philippe Dauman as president and chief executive officer of Viacom. Dauman has served in these positions since September 2006. He will remain as nonexecutive chairman of Viacom’s board until September 13, 2016, when the new board will select a successor. In the meantime, Dauman will have the opportunity to present a proposal on the previously announced exploration of a potential sale of a minority equity stake in Viacom’s Paramount Pictures film unit. Per a provision adopted in June by NAI, the proposal would require unanimous approval from the expanded Viacom board to pass.
For Dauman and Viacom, approval of the Paramount proposal could have significant financial ramifications. According to a report by Bloomberg (http://nnw.fm/dJr6t), Dauman will receive exit payments of more than $75 million. Depending on the performance of the media giant in the months following his departure, his final severance package could exceed $100 million.
Thomas Dooley, who has been with Viacom since 1980 and served as chief operating officer since 2010, will serve as interim president and CEO through September 30, 2016, the end of Viacom’s fiscal year. In the interim, Dooley will work with the board to determine a succession plan and develop a financial strategy to position Viacom for future growth.
“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,” Dooley stated in the news release. “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.”
For more information, visit http://ir.viacom.com
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