NEW YORK — Viacom’s co-deputy chairmen Philippe Dauman and Thomas Dooley, who will exit the company when it completes its merger with CBS, will each receive a $29 million lump sum severance package to settle their existing five-year employment contracts.
Deferred compensation and other considerations will bring Dauman and Dooley’s total cash payout to about $40 million, Viacom said in a Securities and Exchange Commission filing Wednesday. The bulk of their severance package, however, will come from stock options worth about $100 million at Viacom’s current stock price.
The pair will resign as part of Viacom’s agreement, announced Tuesday, to merge with CBS in a $35 billion, all-stock deal. The deal makes CBS head Mel Karmazin the chief operating officer and Viacom chief Sumner Redstone’s successor for a period of at least three years. According to Wednesday’s SEC filing, Karmazin cannot be fired from the combined company during that period without the approval of 14 members of an 18-member board of directors.
CBS will owe Viacom a breakup fee of $1 billion if it terminates the agreement, which is expected to close in six to nine months.
The filing also said Karmazin and Redstone will receive identical annual salaries of $1 million and will be eligible for cash bonuses of up to $10 million in 2000. The amount of their maximum annual bonuses will increase to $13.3 million in 2003. They will also receive $2 million per year in deferred compensation and the right to purchase 2 million Viacom Class B shares.
Stressing their commitment to getting the deal done, the companies said in the filing that they “each agree to take promptly any and all steps necessary to avoid or eliminate each and every impediment and obtain all consents or waivers under any antitrust, competition or communications or broadcast law that may be asserted by any U.S. federal, state and local … antitrust and competition authority.”
After a day of euphoria Tuesday that saw Viacom and CBS stocks rise, the shares dipped on Wednesday. Viacom eased 1.30% to $47.31 and CBS was down 0.99% at $50.19.