Philippe Dauman has been named executive chairman of US media giant Viacom, an appointment that board member Shari Redstone has publicly opposed.
That saw Sumner Redstone resigning his chairman post, with CBS Corp. CEO Les Moonves was nominated to replace him.
At Viacom, which split from CBS in 2005, Sumner Redstone becomes emeritus chairman, with Dauman executive chairman, president and CEO.
Shari Redstone was offered a post as non-executive chairman, but declined and remains non-executive vice-chairman. She was the only board member to vote against Dauman’s appointment.
Dauman has been widely tipped as successor to the National Amusements empire, but dissenters have pointed to his large remuneration, and the ratings performance of Viacom’s key cable channels, which include MTV and Comedy Central.
Viacom’s share price has fallen dramatically in the past two years, and currently sits at US$45.35. Shares rose to more than $47 after news broke, but soon fell again.
“We are disappointed with the company’s decision to appoint Philippe Dauman as executive chairman,” said activist shareholder SpringOwl Asset Management. “It raises questions about the board, corporate governance and fiduciary duties. As evidenced by the negative reversal in the stock price, the market agrees with the position of both SpringOwl and Shari Redstone that someone other than Philippe Dauman should be the chairman.”
Shari Redstone has a volatile relationship with her father. Earlier this week indicated she favoured an independent chairman over Dauman, who has been on Viacom’s board since 1987, and president and CEO since 2006.
Dauman also sits on the board of trustees that oversee Sumner Redstone’s National Amusements media firm, which houses his 80% controlling voting stakes in Viacom and CBS.
“Shari is going to continue to advocate for what she believes to be in the best interests of Viacom shareholders,” said a spokesman for Shari Redstone in the wake of the development.
However, William Schwartz, counsel of law firm Cadwalader, Wickersham & Taft and chairman of the governance and nominating committee of Viacom’s board of directors, welcomed the appointment.
“Philippe has been instrumental with Sumner in every aspect of Viacom’s success for nearly 30 years, and most recently as CEO has taken on the tough task of navigating our future in a time of unprecedented innovation and disruption.
“He has laid out a strategic long-term vision for the company that we fully endorse. We have complete confidence that his dedication to Viacom, his global experience and his determination to further our culture of creativity and innovation will continue to serve the interests of all shareholders and build long-term value.”
“In choosing a successor to Sumner, the board considered the need for seasoned leadership in this time of unprecedented change, Philippe’s business experience and unparalleled knowledge of Viacom, and his long-term vision for the company,” Schwartz added. “We believe his becoming executive chairman is in the best interests of the company and all shareholders.”
Dauman paid tribute to Sumner Redstone, whom he called a “friend and long-time colleague”.
“I am gratified by the continued confidence and support of the board of directors and all of my colleagues at Viacom whose creativity and unrelenting hard work is evident in our recent successes across the Company,” he added.