Philippe Dauman is set to leave his role as CEO of Viacom in exchange for a massive pay-out, ending the war for control of the US entertainment giant.
Viacom COO Tom Dooley will be named interim CEO and president as a search for a long-term replacement is conducted. He will remain in that post until September 30, the end of the financial year, with Dauman remaining on the board until September 13.
Estimates of Dauman’s exit fee range from US$70 million to US$90 million. National Amusements, which holds the Redstone family’s shareholdings in both Viacom and CBS Corp., reportedly agreed to the deal earlier this week.
This will not please investors, who have long seen Dauman as overpaid. Variety cited Equilar, a compensation research company, which said his total reported compensation since taking the CEO job in 2006 was an eye-watering US$409.7 million.
In effect, the agreement ends all of the court cases and knots the untied threads in the battle between Dauman and his board members at Viacom and the National Amusements team.
Dauman had been seeking reinstatement on both the National Amusements board – which would ultimately decide on what to do with Sumner Redstone’s estate when he either dies or is deemed incapable of looking after its affairs – and at Viacom.
Redstone had removed Dauman and his lieutenants from both, though there was a temporary reprisal for the Viacom board members ahead of a court case in October, which will no longer go ahead.
The Viacom board appointed in June to replace Dauman – former Discovery Communications CEO Judith McHale, Eversource Energy chairman Thomas May, Buzzfeed chairman Kenneth Lerer, former DreamWorks co-COO Ronald Nelson and recently-departed Sony Entertainment president Nicole Seligman – is expected to be immediately ratified.
The new board is expected to reject the former CEO’s plan to sell a 49% stake in Paramount Pictures to China’s Dalian Wanda Group, as Redstone sees the film studio as a crown jewel of the media empire.
Terms of Dauman’s exit, however, allow him to pitch the case for a sale to the board.
Dauman’s exit completes a total volte-face in his relationship with Sumner Redstone, who has described his former protégé as “the wisest man I’ve ever known”.
The CEO has come under intense shareholder criticism for taking huge bonuses during his ten-year tenure despite an increasingly poor performance in both the Viacom television and Paramount film units.
He has been blamed for ratings problems at flagship cable channels MTV, Comedy Central and Nickelodeon; poor box office performances; and a serious reduction in the company share price. Since hitting a high of US$88 a share in 2014, share value has fallen more than half and currently sits at US$42.84.
However, Dauman saw attacks on his leadership as unfounded and primarily motivated by Sumner Redstone’s daughter, Shari Redstone. His supporters have characterised this as a power grab, especially since Sumner once claimed he did not want Viacom deputy chairman Shari to lead the business after him.
Dauman claimed Sumner appeared unable to oversee his own affairs, and that his daughter was, in effect, manipulating the situation. She has repeatedly denied this is the case.
Questions over Redstone’s mental capabilities have lingered since he was forced to make a video-taped deposition in a court case against former romantic partner Manuela Herzer, who had claimed she should be in control of the 93-year-old mogul’s affairs.
Despite struggling with speech, Redstone was clear he did not want Herzer overseeing his affairs, with a judge ruling for him.
This year, psychiatrist Dr. James E. Spar said Sumner Redstone had proven his mental faculties after a medical evaluation, though this did not quell Dauman’s protests.
Once Dauman’s exit is ratified – an announcement is expected today – attention will turn to his successor.
Interim chief Dooley may look to keep the role in the long-term, though the new board could look to fresh blood from outside of the organisation. CBS CEO Les Moonves is thought to be in pole position to add Viacom to his duties.
Names bandied around include former Viacom chief Tom Freston, who was critical of Dauman’s leadership earlier this year; Jeffrey Katzenberg, who sold DreamWorks Animation to Comcast this year for US$3.8 billion; Steve Mosko, who recently exited Sony Pictures Television; and new board member Seligman, who has run Sony Entertainment and the US arm of Sony Corp.