UPDATED: Viacom’s board has eliminated the $2 million in compensation that had previously been paid to Sumner Redstone, the chairman emeritus and controlling shareholder in the entertainment conglomerate.
The action came Wednesday, according to a source familiar with the action, less than two weeks after a Los Angeles judge dismissed a court case which challenged the 92-year-old magnate’s mental competency.
Redstone had already had his pay reduced substantially for 2015, it was revealed earlier this year when he left his post as executive chairman of Viacom. He had dipped to the $2 million level, compared to the $13 million he made in 2014.
A group of shareholders filed a lawsuit earlier this year, complaining that the executive was no longer able to function adequately and was being overpaid. The lawsuit noted that Redstone made a total of more than $20 million, including his compensation as chairman of CBS Corp.
The shareholders later withdrew their complaint and suggested they would pursue a different avenue in their attempt to recover the excess pay.
Redstone saw his pay from CBS Corp. decline to $1.8 million in 2015 from $10.8 million a year prior. CBS is also expected to address the issue of Redstone’s pay, given his diminished involvement with the company.
The focus on Redstone’s mental state and declining health intensified beginning last November, when his long-time companion, Manuela Herzer, filed a lawsuit claiming that the billionaire was no longer mentally competent. It was revealed that the once-powerful businessman required round-the-clock care and could barely communicate because of a speech impediment.
Los Angeles Superior Court Judge David J. Cowan dismissed the case in early May, finding that Redstone was capable of deciding who should oversee his care and clearly wanted it to be his daughter, Shari, rather than Herzer. The judge made his ruling, without making a finding about Redstone’s mental capacity. Herzer promptly said she would appeal and filed a new lawsuit, attempting to be returned to Redstone’s estate plan. Redstone’s attorneys said they would file a lawsuit of their own, seeking to recover some $150 million they charge was siphoned off his fortune by Herzer and another one-time love, Sydney Holland.
CNBC first reported the news about the Viacom pay cut.
Cynthia Littleton contributed to this story.