Sumner Redstone Out as Viacom Executive Chairman--2nd Update

By Keach Hagey 

Viacom Inc. said Thursday that Chief Executive Philippe Dauman will succeed media mogul Sumner Redstone as the company's next executive chairman.

The decision, announced after a morning board meeting at Viacom, follows news on Wednesday that Mr. Redstone resigned from the same post at CBS Corp. and was replaced by CBS CEO Leslie Moonves.

Mr. Redstone, 92 years old, continues to control Viacom and CBS through nearly 80% voting stakes. He will take on the new role of chairman emeritus at both companies.

Mr. Dauman is a longtime confidant of Mr. Redstone who has served as CEO since 2006. His elevation to the chairman position wasn't a foregone conclusion. Viacom, owner of cable networks like MTV and Comedy Central and Paramount film studio, has faced headwinds in its cable business and suffered a one-third drop in its stock price over the past year.

Some investors had expressed displeasure with Mr. Dauman's leadership and have been pushing for change. Viacom shares opened up around 5% at $47 on Thursday, as investors anticipated dramatic change at the company, but lost some ground after Mr. Dauman's election to chairman was announced. Shares were up 1% in early trading.

"In choosing a successor to Sumner, the board considered the need for seasoned leadership in this time of unprecedented change, Philippe's business experience and unparalleled knowledge of Viacom, and his long-term vision for the company," said Viacom board member William Schwartz. "We believe his becoming executive chairman is in the best interests of the company and all shareholders."

The choice of Mr. Dauman wasn't unanimous. Shari Redstone, Mr. Redstone's daughter and the vice chair of Viacom, didn't vote in favor of Mr. Dauman's chairmanship, according to people familiar with the matter.

Ms. Redstone issued a statement on Wednesday foreshadowing such a vote by saying that she didn't believe that her father's successor at Viacom could be a "trustee of my father's trust or otherwise entwined in Redstone family matters, but rather a leader with an independent voice."

Both Mr. Dauman and Ms. Redstone are members of the trust that will oversee Mr. Redstone's holdings in CBS and Viacom once he dies or if he is incapacitated.

As was the case with the CBS leadership change, Ms. Redstone was offered the position of nonexecutive chairman of Viacom but declined, according to people familiar with the matter.

Write to Keach Hagey at [e-mail]

(END) Dow Jones Newswires

February 04, 2016 13:15 ET (18:15 GMT)

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