Philippe Dauman is not likely to become chairman of Viacom Inc., according to a statement released Wednesday night by Shari Redstone, daughter of controlling shareholder Sumner Redstone, who is in failing health.
Redstone asserts that she believes the next chairman of Viacom should be someone who is not connected to the Redstone family trust that will inherit Sumner Redstone’s controlling shares in Viacom and CBS after his death. Shari Redstone and Dauman are among the seven members of the trust. Shari Redstone has the right to succeed her father in the chairman’s post at Viacom and CBS but she set an agreement with CBS’ CEO Leslie Moonves to give the chairman’s reins to him. That move came Wednesday just before Shari Redstone released her statement.
“As has been accurately reported, my father’s Trust states his intention that I succeed him as (non-executive) Chair at CBS and Viacom, and also names me as a Trustee after his death,” Shari Redstone said. “However, it is my firm belief that whoever may succeed my father as Chair at each company should be someone who is not a Trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice. I was honored to nominate Les as the CBS Chair and am delighted to congratulate him on his new position. He follows in the visionary tradition of my father, and I know that Les will successfully lead CBS into the digital future.”
A Viacom spokesman was not immediately available for comment but the company said its board members would meet on Thursday. CBS’ move puts pressure on Viacom, as shareholders have increasingly raised concerns about the health and mental status of 92-year-old Sumner Redstone. A lawsuit is also in progress regarding control of Sumner Redstone’s health care decisions. That legal action was initiated by Manuela Herzer, a former Redstone companion who claims that she was ousted from his home last October at the behest of Dauman, a longtime lawyer for Redstone who took over health care directive decisions for the mogul.
SpringOwl Asset Management, an investment firm that has pushed for Dauman’s ouster and other changes at Viacom, applauded Shari Redstone’s statement. The sharp drop in Viacom shares during the past year has spurred SpringOwl and other investors to go public with its criticism of the company that is firmly in Sumner Redstone’s control through the super-voting shares owned by his private National Amusements Inc. holding company.
Viacom shares shot up 10% in after-hours trading Wednesday as the news of Moonves’ elevation and decisions to come at Viacom spread.
“SpringOwl has recently made a case for change at Viacom with the goal of increasing value for all shareholders and the company has responded. The positive jump in share price in after-hours trading demonstrates shareholder approval for these changes,” the company said. “We strongly urge management and the board to appoint an independent director as Executive Chairman and that it not be Philippe Dauman. We hope management and the board will continue to act responsibly in addressing Viacom’s depressed stock price relative to its much higher asset value.”