Viacom’s chief executive, Philippe Dauman, is one of five directors axed from the media giant’s board by parent company National Amusements.
Five new directors have been elected to the board to replace those chopped, who comprise Dauman (pictured), George Abrams, Blythe McGarvie, Frederic Salerno and William Schwartz. Dauman does remain CEO for the time being, though he appears to be in a fight for that post as critics line up against him.
The move came after National Amusements amended Viacom corporate bylaws that mean a sale of a portion or all of Paramount Pictures must be unanimously agreed by Viacom’s board of directors.
Dauman and the other axed directors have launched a lawsuit against National Amusements’ latest move.
Dauman has been pushing to sell a 49% stake in Paramount to pay off debts and release equity for investment, which is in opposition to statements released by National Amusements president Sumner Redstone’s camp.
The new board members include Kenneth Lerer, who co-founded The Huffington Post and is chairman of BuzzFeed. Former Viacom chief Tom Freston yesterday claimed none of the previous Viacom board had practical digital media experience.
Former Discovery Communications CEO Judith McHale, Eversource Energy chairman Thomas May, former DreamWorks co-COO Ronald Nelson and recently-departed Sony Entertainment president Nicole Seligman round out the new board members.
They will sit alongside Viacom COO Tom Dooley, Cristiana Falcone Sorrell, Deborah Norville, Charles Phillips Jr., chairman emeritus Sumner and non-executive vice chairman Shari Redstone.
The latest developments followed a series of public clashes between Dauman and National Amusements, with Redstone’s camp unhappy with the actions of the board members, who claim Sumner Redstone has been manipulated by his daughter, Shari Redstone, as his health declines (though a doctor has said he retains his mental capacity).
Salerno, Viacom’s lead independent director until this week, yesterday filed a lawsuit that aims to have the board changes overturned. The suit claims Shari Redstone is the spearhead behind National Amusements’ latest moves, and aims to reduce her perceived power.
“Under Mr. Redstone’s long-standing estate plan, control and management would remain independent of Shari, for whom Mr. Redstone generously provided but who he determined did not have the skills to control or manage Viacom and from whom he was bitterly estranged for many years,” Salerno said in the suit, adding the elder Redstone “specifically did not want his family to control” National Amusements or Viacom.
“With his decline in health, Shari has placed Mr. Redstone’s decades-long plan to run Viacom as an independently controlled and professionally managed company in jeopardy,” the suit added.
“Sensing an opportunity presented by her father’s severely impaired mental and physical condition, and unsatisfied with the limited role for her at her father’s companies that he envisioned, Shari has implemented a scheme to wrest control of Viacom in contravention of Mr. Redstone’s well-established desires.”
National Amusements, which owns 79.8% of Viacom’s voting stock and 10% of the overall equity, said the new board would elect a new chairman, and “evaluate the current management and take whatever steps it deems appropriate to ensure that Viacom has in place strong, independent and effective leadership”.
Dauman and Abrams have already been removed from the National Amusements board of trustees and Redstone family trust, which will ultimately decide Viacom’s future after the 93-year-old Sumner Redstone retires or passes away.
An SEC filing this morning revealed Dauman and Abrams would use Viacom shareholder cash to foot the legal and PR bill in their fight to be reinstated to the National Amusements board of trustees.
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20th January 2019