Viacom ride too rough for treasurer Clarke

NEW YORK — Viacom Inc. treasurer Vaughn Clarke, a key figure in the company’s capital-raising operations for the past five years, won’t renew his contract when it expires Dec. 31, Viacom said Tuesday.

As treasurer, Clarke was closely involved in the team that negotiated the Paramount and Blockbuster acquisitions in 1993-94, and he negotiated debt financing that followed those deals.

But he also oversaw Viacom’s relations with Wall Street, a position that has become a hot seat in the past couple of years as Viacom plunged from a high after the acquisitions of $54 to around $35, where it has traded for much of the past 18 months. Viacom stock closed down 68¢ to $34.75 Wednesday.

Clarke is the third exec with responsibilities for dealing with investors to leave Viacom in the past year, following Reed Nolte’s resignation as investor relations VP last December and the short tenure of his successor, Christina Hornbeck.

Some Wall Streeters believe the revolving door reflects frustration with the company’s stock market performance.

“Senior management was unhappy, and there is a question of whether it was the individuals in investor relations or did it have to do with the operations themselves … The biggest issue was that the results just didn’t materialize,” said one person with knowledge of the situation.

Viacom has angered many on Wall Street over the past two years by repeatedly telling analysts to revise down their estimates of how much the company would earn, as Blockbuster’s performance went from bad to worse. That cost Viacom credibility among Wall Street analysts, highlighted by Merrill Lynch analyst Jessica Reif’s comments in a note to clients April 22, when Viacom warned that Blockbuster’s first quarter earnings would fall 15-20%.

“We have lowered our estimates so many times for Viacom in the past year alone that we have little confidence in the company’s ability to meet its operating budgets,” Reif said in the note, which was headlined “Sad day for shareholders, lowering numbers yet again.”

Clarke denied Viacom’s problems on Wall Street were connected with his departure, saying he quit because he no longer wanted to commute between his family’s Maryland residence and Viacom’s New York City headquarters, as he had been doing since joining Viacom in 1993. He said that while “some people won’t believe it,” he wanted to spend more time with his wife and two boys aged 8 and 10.

“Nobody is happy with the stock price,” Clarke added, but noted he had the option to renew his contract for another three years.

A Viacom spokesman also denied dissatisfaction with the company’s relations with investors was related to the departure of any of the execs, noting that Nolte had quit to take a position at News Corp., and Clarke’s personal situation. The spokesman declined to comment on the circumstances surrounding Hornbeck’s departure.

“I left because I got a great opportunity in News Corp.,” Nolte confirmed Tuesday, declining to comment further. Hornbeck could not be reached for comment.

Viacom announced late Tuesday that Martin Shea would start Jan. 1 as senior VP for investor relations, replacing some of the duties performed by Clarke. Shea worked at Paramount Communications as VP for investor relations for 17 years until Paramount was acquired by Viacom in 1994, and has since been working as senior VP for corporate communications at Triarc Companies Inc.

Viacom declined comment on how it would replace Clarke’s treasurer functions. While the company is committed to reducing its debt, and is unlikely to negotiate many big deals in the short term, Clarke said the treasury side of his job was likely to get busier next year.

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