Sumner Redstone is sticking with the status quo in his bifurcated media empire.
Viacom has cut a new five-year deal with Philippe Dauman that will keep him at the helm as prexy and CEO through December 2016. Pact comes six weeks after Redstone’s CBS Corp. set a new contract with CEO Leslie Moonves ( Daily Variety , Feb. 25).
Dauman will continue to hold a seat on the Viacom board. His contract as Viacom prexy and CEO wasn’t set to expire until December 2011. Viacom/CBS chairman Redstone tapped Dauman, his longtime trusted lieutenant, to succeed Tom Freston as Viacom boss in September 2006.
Dauman has led the company during a tumultuous few years for Paramount Pictures in particular, where he has navigated a high-profile series of comings and goings, including the separation from DreamWorks Studios.
Hollywood took notice when Dauman, a negotiator with a reputation for staying cool under fire, stood tough with DreamWorks during the acrimonious divorce.
Dauman also had to contend with troubled financials as Viacom charted its course after the 2006 split with CBS and in the face of the economic meltdown that started in fall 2008. He mandated that Paramount, as well as other Viacom divisions, institute strict cost-cutting measures.
In announcing Dauman’s new contract, Viacom’s board of directors cited his strong operational and financial leadership.
“Philippe has strengthened Viacom’s iconic entertainment brands, increased efficiency in every area, profitably extended our world-wide footprint, and forged significant long-term agreements with distribution and other partners,” Redstone said in a statement.
“Most important, he has revived our creative spirit and our focus on innovative and distinctive content.”
In 2009, Viacom increased its operating cash flow and expanded its operating margins, as well as restructuring and strengthening its debt profile in a move that produced $200 million in cost-savings.
As a result, Viacom shares have been among the best performing media stocks since January 2009.
“We have many of the greatest entertainment brands in the world and an unparalleled tradition of innovation and creativity in films and in television programming, all supported by a strong operational and financial organization,” Dauman said in a statement.
Dauman has been a demanding captain. In December 2008, Viacom slashed 850 jobs –7% of its workforce — including an estimated 100 positions at Par.
Paramount chair-CEO Brad Grey and Dauman trimmed the studio’s overall slate to keep costs down and maximize revenues. They also shuttered specialty label Paramount Vantage.
The MTV Networks cable unit has faced similar belt-tightening, amid the advertising downturn and a prolonged ratings slump at MTV. Nickelodeon and Comedy Central, on the other hand, have been on the upswing.
The majority of Dauman’s compensation continues to be in the form of performance-based awards, which are tied to a combination of operational and financial targets and shareholder returns. Terms of his deal will be detailed in an upcoming filing with the Securities and Exchange Commission.
Dauman has been a member of the Viacom board since 1987. In 1993, he became Redstone’s point man when Viacom and Barry Diller battled to take over Paramount Pictures. After Viacom landed the studio, Redstone made him general counsel for Viacom.