In their truce, Dauman next month will leave the company that he’s served as CEO since 2006.
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Viacom’s board was expected to meet Thursday to approve the settlement, with an announcement expected soon, barring unforeseen delays, said the people briefed on the agreement, who spoke on the condition of anonymity because it was not final.
Under terms of the settlement, if finalised, Mr Dauman, 62, will be replaced by Viacom Chief Operating Officer and his longtime right-hand man, Thomas Dooley, who will be interim CEO until Sept 30, and then may stay on longer, according to the sources, who wished to remain anonymous because the discussions are confidential.
Dooley will organize meetings between shareholders and the heads of the company’s cable networks, including Nickelodeon, Comedy Central and MTV. National Amusements, directly and through subsidiaries, holds approximately 79.8% of the Class A (voting) common stock of Viacom Inc., constituting 10% of the overall equity of Viacom.
Redstone objected as well to the drop in stock price of Viacom as it lost close to 40% over the past three years. “It reduces a level of uncertainty”. He will also be entitled to about $72 million compensation package under the deal. Michael Nathanson, an analyst with MoffettNathanson Research, said such a deal would cut costs for executive salaries and put “a real programmer in charge of the business”, a reference to Leslie Moonves, CBS’s well-respected chief executive.
Redstone took over the company in 1987 after a power struggle of his own.
In mid-October, Redstone chose to also have Herzer removed from his hilltop mansion in Beverly Park and cut her out of his will.
John Janedis, an analyst at Jefferies, sees more than a figurehead in Dooley. 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.
The settlement caps a bitter struggle between Dauman and Redstone’s formerly estranged daughter, Shari Redstone, now a Viacom director and president of National Amusements.
Dauman will remain as non-executive chairman through September 13, when the board will be reduced to 15 directors. And Paramount has not had many hits over the past year or two, which they say shows problems with its pipeline of movies. In May, Dauman filed a complaint with the Commonwealth of Massachusetts Probate and Family Court to dispute his ouster from a family trust by Redstone.
Sumner Redstone in May removed Dauman and Viacom board member George Abrams from the Sumner M. Redstone National Amusements Inc Trust. Dauman, who stepped down as CEO Thursday, will leave the board September 13. And a host of operational challenges await them in all their main business units.
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In the release, she thanked Dauman “for his many years of dedicated service and the important role he has played at Viacom. I have worked with so many of you to launch powerful brands, create cultural touchstones and build a global entertainment content engine that is second to none”, Dooley said in the memo.
