- Thursday, Jun. 16, 2016
- LOS ANGELES (AP)
Viacom CEO Philippe Dauman may not have much time left at the entertainment conglomerate.
National Amusements, the theater company through which Sumner Redstone controls both Viacom and CBS, said Thursday that it has replaced Dauman and four other directors on Viacom's 11-member board.
The shakeup comes as lawyers battle over whether Redstone, 93, is mentally competent to run the multibillion-dollar New York-based media companies Viacom Inc. and CBS Corp.
Frederic Salerno, the lead independent director who was among those ousted, said in a statement the move was "brazen and demonstrably invalid." He pinned it on Redstone's daughter, Shari. Salerno contends she is manipulating her father in a bid to control his empire upon his death.
National Amusements filed papers with a Delaware court to reaffirm the move, to which Salerno immediately responded with filings of his own. National Amusements asked the court to keep the current board - including the ousted directors - temporarily in place and prohibit it from taking any unusual actions until a final judgment.
The company also hinted that Dauman's CEO job was on the line, although he keeps it for now. National Amusements said it will be up to the new board to "take whatever steps it deems appropriate" to ensure "strong, independent and effective leadership."
Dauman, the third highest-paid CEO in America last year, has been criticized by analysts and investors alike for failing to keep up with changes wrought by the internet on Viacom's TV networks like Comedy Central, MTV and Nickelodeon.
Viacom shares jumped nearly 7 percent Thursday, but are still down 49 percent from their all-time highest close of $88.90 in March 2014.
Among the new directors are Buzzfeed Chairman Kenneth Lerer; former Discovery Communications CEO Judith McHale; former DreamWorks SKG co-COO Ronald Nelson and former Sony Entertainment President Nicole Seligman. Along with Dauman, George Abrams and Salerno, board members Blythe McGarvie and William Schwartz were removed.
SpringOwl Asset Management LLC, a small minority shareholder that slammed Viacom management in a January presentation, said in a statement "the board has been significantly upgraded," and it continued to press for Dauman's removal.
The Redstone saga has been dragging on for months and became highly public in November after he booted ex-girlfriend Manuela Herzer from his home and she sued to be reinstated as his health care proxy. Her case continues to roil through the courts.
Dauman and Abrams also brought a suit in a Massachusetts probate court last month asking to be reinstated to their roles on both National Amusements and the Redstone family trust after being stripped of their positions.
They argue Redstone is incapacitated and would have been unable to make those decisions. Redstone's lawyers have disputed the charge, citing doctor's reports that say he is mentally capable despite his speech impediment and feeding tube.