Five Viacom Board Members, Including CEO Philippe Dauman, Ousted By Redstone's National Amusements
June 16, 2016 at 1:44 PM (PT)
SUMNER REDSTONE's NATIONAL AMUSEMENTS, controlling shareholder of VIACOM, has replaced five members of the VIACOM board of directors, including CEO PHILIPPE DAUMAN.
The WALL STREET JOURNAL reports that DAUMAN, GEORGE ABRAMS, BLYTHE MCGARVIE, WILLIAM SCHWARTZ, and lead independent director FREDERIC SALERNO were booted from the board TODAY (6/16) and replaced by former SONY ENTERTAINMENT President NICOLE SELIGMAN, BUZZFEED Chairman KENNETH LERER, AVIS BUDGET GROUP Executive Chairman RONALD NELSON, former DISCOVERY CEO JUDITH MCHALE, and EVERSOURCE ENERGY Chairman THOMAS MAY. Remaining in place are the other six directors, COO TOM DOOLEY, REDSTONE and his daughter, Vice Chair SHARI REDSTONE, CRISTIANA FALCONE SORRELL, DEBORAH NORVILLE, and CHARLES E. PHILLIPS, JR.
The move is likely to precipitate legal action by the ousted directors, and NATIONAL AMUSEMENTS has filed papers in DELAWARE Chancery Court to affirm the validity of the ouster. "It will be the responsibility of the newly-constituted board to evaluate the current management team and take whatever steps it deems appropriate to ensure Viacom has in place strong, independent and effective leadership," NATIONAL AMUSEMENTS said in a release. The release adds that NATIONAL AMUSEMENTS "requested that, pending a final ruling, the Court: (1) temporarily maintain the existing VIACOM Board in place; and (2) prohibit that Board from taking any action outside of the ordinary course of business." Late THURSDAY, SALERNO, on behalf of the ousted board members, filed suit in the same DELAWARE court seeking to block the "brazen" move, blaming SHARI REDSTONE for the ouster and requesting an expedited hearing.
Previously, after SALERNO sent an open letter this week pleading for the chance to talk to REDSTONE, REDSTONE responded in a statement delivered through a spokesperson that he "no longer trust(s) (CEO) PHILIPPE (DAUMAN) and those who support him" in his quest to block being removed from the trust formed to handle REDSTONE's affairs in the event of incapacity or death, reports the LOS ANGELES TIMES.
“I am determined to act in the best interests of the company and all of its shareholders,” the statement said. “I do not trust you or the current board to do the same." He added, "I am being sued by my fellow board members and my wishes are being ignored."
REDSTONE's condition has been the focus of suits by DAUMAN and ABRAMS, fighting to block their removal from the board of REDSTONE's NATIONAL AMUSEMENTS holding company and the trust, and ex-girlfriend MANUELA HERZER, refiling her challenge to being removed as REDSTONE's health care representative. In each case, the plaintiffs are alleging that REDSTONE is not competent to make decisions about the company and CBS CORP., and that his affairs are being controlled by SHARI REDSTONE.
Freston: Dauman, Current Board Not Best For Viacom
Meanwhile, former VIACOM CEO and MTV NETWORKS Chairman/CEO TOM FRESTON told CNBC that DAUMAN is "not the optimal leader for the company" and "not a great listener," suggesting that "The right guy for a job like that in a company that's steeped in the popular culture with young audiences, the person who owns that chair should be somebody who is turned on, attracted to and somewhat knowledgeable about the popular culture and what's going on there." He also called the present VIACOM board "complicit in the inactivity of VIACOM" and out of touch with the company's viewers. But he added that SHARI REDSTONE, with whom he is friendly, was not involved in his opinion on DAUMAN and the board and "doesn't even know I'm on TV" for the interview.