NEW YORK — Viacom toppers Sumner Redstone and Mel Karmazin spent several hours defending their generous pay packages for last year when shareholders blasted the big bucks at a raucous annual meeting Wednesday in Gotham.
Redstone insisted he and Karmazin are the best of friends now and “have never been more productive as a team than we are today.” He didn’t discuss succession. When one shareholder said the Viacom chairman-CEO is 78, Redstone yelled, “Don’t take potshots at my age.”
The execs each pocketed $15.3 million in salary and bonus for 2001 and said their compensation was based on strong relative performance in a difficult economic climate. Viacom stock has indeed proven sturdier than shares of other media congloms, but it’s still down about 17% year-to-year.
“I don’t know where their heads are. What are they going to give you when the stock goes up?” asked one irate shareholder, referring to the compensation committee of the board of directors, which sets pay for top execs.
The duo might have expected a flap over their pay, which far outstripped that of most other media CEOs — even with their dueling $12 million bonuses cut from $15 million the year before. The U.S. economy slipped into recession last year, unemployment jumped and times have been rough for the retirees who make up a big portion of those who attend and comment at annual meetings.
And in general, independent directors have come under fire lately as being too cozy with management and less concerned with the best interests of small shareholders.
Angered by the repeated criticism, which came mostly from three or four tenacious and loquacious shareholders, Redstone lost his cool. “Sell your stock,” he hollered. He said the company has outperformed rivals like AOL Time Warner, Vivendi, News Corp. and Walt Disney and that its merger two years ago was the most successful of the big media combinations.
Karmazin joked that the meeting was so riveting, “We’re really thinking of a new reality show.”
Mel catches hell
Shareholders also weighed in on Karmazin. One insisted he was planning a coup in cahoots with Farid Suleman, a longtime Karmazin lieutenant who left Viacom several months ago to join private equity firm Forstmann Little & Co. Another, a Karmazin fan, said he fears Viacom will lose its chief operating officer due to Redstone’s ego.
“I trust Mel implicitly. We’re very good friends,” Redstone parried. “We love each other. Mel, would you go out with me tonight?”