Philippe Dauman was ousted as CEO of Viacom on Thursday night during a meeting of the media giant’s board that ended a multi-pronged legal battle with the company’s founder, Sumner Redstone, and his daughter Shari Redstone, a person with knowledge of the situation told TheWrap.
Viacom’s board has approved an agreement that would remove Dauman after 10 years as the top executive at the company and install COO Thomas Dooley as interim chief executive, effective immediately. A formal announcement is expected soon.
Dauman, who is set to receive a golden parachute package worth $72 million, will remain non-executive chairman through September 13. Dooley will hold the interim top executive title through Sept. 30, buying the board time to assess and evaluate for the future.
Meanwhile, the board will expand with the five new members that Viacom parent company National Amusements Inc. had previously selected, growing to 16 — at least until Dauman departs next month. The newbies will be Kenneth Lerer, Thomas May, Judith McHale, Ronald Nelson and Nicole Seligman.
Some time later, three more board members will cycle out to bring the total to an even dozen, which will probably take place at the next annual meeting, likely in March 2017. Redstone had previously attempted to remove four current board members — George Abrams, Frederic Salerno, Blythe McGarvie and William Schwartz — so may be the most vulnerable in any turnover.
The deal would also settle three discrete lawsuits in Massachusetts, Delaware and California filed by Dauman and Abrams, challenging the 93-year-old mogul’s mental capacity to make decisions about his businesses.
This settlement should also squash a proposed sale of a 49 percent stake in Paramount Pictures, which Dauman and board members had championed but the Redstone family vehemently opposed.
Redstone oversees the privately held National Amusements Inc., which controls an 80 percent stake in both Viacom and CBS. He also served as a mentor to Dauman for much of their shared careers. Not anymore.
Recently, that relationship has been much different. The Redstone/National Amusements camp has argued that Dauman has done a bad job running the publicly traded corporation, whose stock price has basically halved since its height two years in the midst of troubled performance by cable networks like MTV and Nickelodeon as well as the Paramount movie studio.
In after-hours trading, Viacom stock was up about 1 percent, to $43.27. Shares had previously slipped about two percent during the regular U.S. trading day.
Meanwhile, the Dauman’s camp has countered that Sumner’s daughter Shari — with whom he reconciled last year after a period of estrangement — is actually pulling the puppet strings in an epic and bitter power play.
Well, the Redstones won, unless you consider Dauman’s $72 million to not work anymore the bigger victory here.
A Timeline of Sumner Redstone's Crazy Life in Pictures (Photos)
May 27, 1923: Sumner Murray Rothstein (later Redstone; pictured) is born in Boston, and the media world will never be the same.
1993: Redstone's Viacom acquires film studio Paramount Pictures.
This April, the aging figurehead publicly stated that he doesn't want to sell a minority stake in that company. The Viacom Board of Directors, on the other hand, is pushing for that to happen as early as end-of-June.
2000: Viacom and the so-called Tiffany Network, CBS, merge. It wouldn't last.
Just five years later, Viacom and CBS split, though the two publicly traded companies are still under the same umbrella -- Redstone's National Amusements, Inc. still controls 80 percent of both companies today.
2006: Shortly after the spinning off, Sumner began feuding publicly with daughter Shari (the pair pictured together here) over her role within the companies.
On September 5 of that year, Sumner Redstone taps legal counsel Philippe Dauman to lead Viacom. Shari Redstone and Dauman seemingly haven't gotten along since then, though she's apparently repaired the relationship with her ailing father.
October 2015: Sumner Redstone's longtime girlfriend Manuela Herzer (pictured) was booted as his healthcare proxy, losing her sizable inheritance in the process.
Dauman became Sumner Redstone's interim proxy, before Shari Redstone re-ingratiated herself and took the role over.
Herzer would sue in May 2016 to get back in the inner circle -- or at least reclaim her spot in Sumner Redstone's will -- but was denied by a judge. Sumner's mental competency was held up at the same hearing, though it wouldn't be the last time an adversary asks someone sitting on the bench to double-check that.
Jan 20, 2016: Activist investor SpringOwl calls for the Sumner Redstone (pictured, from 2012) to step down as Viacom and CBS chairman. The 92-year-old has had problems with his speech for years, and hasn't been able to so much as deliver a pre-written statement during quarterly investor calls.
May 18, 2016: The Viacom Board of Directors votes to stop paying Sumner Redstone (pictured at LACMA), a perceived slap in the face by his legal counsel.
If you got a candid answer from someone at Viacom, however, they'd point out that the billionaire has plenty of money and does exactly zero work, so he's just fine. Plus, the company's been trying to cut costs where it can.
May 20, 2016: Sumner Redstone (pictured here with daughter Shari) removes Philippe Dauman and George Abrams as trustees in the Sumner M. Redstone Trust, and as board members of his family business, National Amusements, Inc.
This kicked off much public fighting between the two far-apart sides. The nastiest accusation came from Viacom and Dauman, who accused Shari Redstone of "manipulating" her father's signature.
They're not the only people who believe the daughter is pulling daddy's puppet-strings.