Sumner Redstone has moved to oust Philippe Dauman and four others from the Viacom board of directors in his latest showdown with the media company Thursday.
For months, Redstone has taken an increasingly aggressive stance toward Dauman, his former confidante who has remained as Viacom’s chairman and CEO despite lagging corporate performance and sagging stock price.
In a move announced by Redstone’s National Amusements Inc., which controls 80 percent of both Viacom and CBS, Redstone named potential replacements for Dauman as well as for directors George Abrams, Frederic Salerno, Blythe McGarvie and William Schwartz.
The targeted directors would be replaced by Kenneth Lerer, Thomas May, Judith McHale, Ronald Nelson and Nicole Seligman. And Viacom’s six other board members, including Sumner Redstone and his daughter Shari Redstone, would remain in place. Dauman still remains Viacom CEO — for now.
Anticipating a legal fight, National Amusements filed paperwork in a Delaware court seeking approval of the replacements — and requested that the existing board “temporarily” remain in place and be barred from any “action outside of the ordinary course of business” until the board’s composition is settled.
“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 that Viacom has in place strong, independent and effective leadership,” National Amusements said in a statement.
“The newly elected directors have deep experience in corporate governance of public companies and will provide valuable expertise to Viacom in the areas of media, entertainment and technology. None of the new directors is affiliated with National Amusements, Viacom or any Redstone family trust,” it continued.
Salerno, the lead independent director on the board and one of those targeted for removal, issued a statement on Thursday:
“Today Viacom received notice from National Amusements, Inc. that purports to remove Viacom directors and replace them with new directors, subject to a ruling by the Delaware Court. This is a brazen and demonstrably invalid attempt by Ms. Redstone to gain control of Viacom and its management in disregard of Sumner Redstone’s wishes and to undermine the current Board’s ability to represent the best interests of all of the stockholders of Viacom.”
“With the support of the independent directors of the Board, I am filing today a lawsuit in Delaware Chancery Court seeking an expedited determination that Ms. Redstone’s attempted removal and replacement of Viacom directors is invalid and that the directors elected at the 2016 Annual Meeting continue to serve. I am also seeking an expedited hearing, expedited discovery and an order of the court to maintain the status quo pending resolution of the litigation.”
“Mr. Redstone established and maintained for decades a clear estate plan for the governance of Viacom upon his death or incapacity — based on independent control and professional management of Viacom going forward. He said repeatedly that the Board will be responsible for making decisions about governance, leadership and succession, and he hand-selected a group of trusted advisors and independent directors to fulfill this role.”
“Sadly, it is now clear that Mr. Redstone is being manipulated and used by his daughter in an attempt to accomplish her long-held goal of gaining complete control of Viacom.”
Here are short bios of the newly appointed directors, in National Amusements’ own words:
Lerer: Lerer is a Managing Partner at Lerer Hippeau Ventures and the Chairman of Buzzfeed. Previously, he was the Chairman and Co-Founder of The Huffington Post.
May: May is Chairman of Eversource Energy and, until May 2016, he also served as President and Chief Executive Officer of Eversource.
McHale: McHale serves as President and Chief Executive Officer of Cane Investments, LLC, which she joined in 2011. McHale previously served as the Under Secretary of State for Public Diplomacy and Public Affairs for the U.S. Department of State from 2009 to 2011. From June 2004 to December 2006, she served as the President and Chief Executive Officer of Discovery Communications, Inc., the parent company of Discovery Channel, and served as its President and Chief Operating Officer from 1995 to 2004.
Nelson: Nelson serves as the Executive Chairman of the Board of Avis Budget Group, Inc. and previously served as Chairman, President and Chief Executive Officer from August 2006 to December 2015. Nelson also served as Co-Chief Operating Officer of DreamWorks SKG from November 1994 to March 2003.
Seligman: Until March 2016, Seligman served as the President of Sony Entertainment, Inc. (since June 2014) and of Sony Corporation of America (since June 2012). She previously served as Executive Vice President and General Counsel of Sony Corporation from June 2005 to June 2014.