Viacom CEO resigns with $72m settlement

Viacom CEO resigns with $72m settlement

Media giant Viacom has announced that its Chief Executive Officer, Philippe Dauman, has resigned, ending a battle for control of the company that has dragged on for months.

In May, Dauman and George Abrams were removed from the Sumner M. Redstone National Amusements Inc Trust, because Sumner Redstone was not pleased with the CEO's plans to sell a stake in Paramount and has also not been happy with the company's performance, said a spokesman for Redstone.

Dauman will "resign immediately as president and chief executive officer" and be replaced by chief operating officer Tom Dooley until September 30, with the board to decide his permanent successor. New CEO Dooley will continue pursue that plan, according to reports.

Keryn Redstone, granddaughter of media mogul Sumner Redstone, who is questioning the validity of the settlement between her aunt Shari Redstone and Viacom, has been granted a hearing in Massachusetts Friday.

But Viacom is in trouble: it has lost more than a third of its stock value in the last 12 months, and Dauman has been shopping Paramount Pictures - a move Redstone is said to oppose.

Folta, who joined the company when Viacom acquired Gulf+Western parent Paramount Communications in 1994, has recently had to defend Dauman during his feud with Sumner and Shari Redstone.

Under the settlement, the board would add the five directors that National Amusements put forward in June, bringing the board to 15 directors after Dauman departs.

Viacom's share price today sits at US$43.49, which is nearly exactly what it was at the beginning of 2006, when Dauman became CEO.

Sumner Redstone, a Hollywood legend whose fortune is estimated at $5 billion, is also the majority shareholder in CBS media group. Dauman, who stepped down as CEO Thursday, will leave the board September 13.

Viacom owns such assets as Nickelodeon, MTV, VH1, Comedy Central, BET and the Paramount Pictures movie studio.

Viacom also said in the filing that 167,460 of the 300,000 "performance restricted share units" awarded to Dauman were withheld to satisfy his tax liability, presumably, then in the neighborhood of $7.2 million.

What the settlement appears unlikely to resolve, once and for all, is the status of the 93-year-old Mr. Redstone, whose mental competency has been a matter of debate throughout the ordeal. The board would provide feedback and Mr. Dauman could submit a final proposal for the board to consider.

The central question in the legal fight between Dauman and the Redstones was whether Sumner was of sound mind when he made a decision to cut ties with his longtime business associate.

The ousted CEO also gets to keep his health care package for two years, while Viacom will fund outside office space for him and the salary and benefits for his executive assistant for three more years.



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