Sumner Redstone has for years controlled Viacom Inc. with a fastidious eye. No detail was too small for the media mogul, who kept a fine grasp on the entertainment conglomerate’s operations. In recent months, however, his presence has diminished. He is no longer heard during conference calls with investors and has not attended recent Viacom shareholder meetings.
In an acknowledgement that Redstone’s presence in Viacom operations has lessened, the company said in a proxy filing with the U.S. Securities and Exchange Commission Friday that the reason behind a cut in his overall annual compensation for its fiscal year 2015 was “reduced responsibilities.”
It’s the latest signal that the media mogul, who controls both Viacom Inc. and CBS Corp. through his family owned movie-exhibition company, National Amusements Inc., may not be as involved in company operations as he once was. And the disclosure comes as unrest is growing among the company’s shareholders and Redstone is in the midst of a prickly court dealing with a former paramour who has called his competence into question.
Viacom disclosed earlier this week that Redstone’s annual compensation fell 85% in fiscal 2015 to $2 million, compared with a total of $13 million in 2014.
The executive became ineligible to receive a bonus beginning in fiscal 2015, the company said, and has not been eligible to receive an annual equity award since fiscal 2012. The amount of salary he received was on par with what he was awarded in fiscal 2014.
In the proxy, Viacom’s board of directors indicated Redstone should be allowed to stay on as executive chairman.
Redstone should remain in the role “because of his position as our controlling stockholder, his role in founding Viacom, including managing it for many years, his extensive experience in and understanding of the media and entertainment industry and his relationships in the business community,” the Board of Directors said in a statement. The board noted that it had appointed Shari Redstone, Sumner Redstone’s daughter, as non-executive vice chair of the board “to increase her involvement with our company in a non-executive capacity.”
The proxy also revealed that Viacom Chief Executive Philippe Dauman and Chief Operating Officer Thomas Dooley took slightly smaller bonuses for the fiscal year in order to give incentive pay to executives in Viacom’s operating units.
“Messrs. Dauman and Dooley stated their belief that such a reallocation would be appropriate to reflect outstanding efforts by divisional executives and other employees that would not otherwise be appropriately reflected in financial measures of performance,” the company said in its proxy.