Viacom CEO Philippe Dauman explains Sumner Redstone succession planning
Viacom CEO Philippe Dauman on Monday sought to tamp down speculation that the ailing Sumner Redstone, executive chairman of both Viacom Inc. and CBS Corp., has become incapacitated -- or that there will be a leadership vacuum at the top of the media companies.
Redstone, 92, is the executive chairman of both Viacom and CBS, and his health has been steadily declining -- leading to concern among investors about the fate of the two media companies that he controls.
“Well over 20 years ago, he put in place an estate planning mechanism to ensure continuity,†Dauman said Monday at the UBS Global Media and Communications Conference in New York.
Dauman’s comments came as the company has been under increasing pressure from prominent investors to be more transparent about Redstone’s health situation. The elderly mogul has not taken part in public company events for the past year, including annual meetings or quarterly earnings calls.
The state of Redstone’s health has been in dispute as a result of a lawsuit filed last month by Redstone’s former girlfriend, Manuela Herzer. Until October, Herzer had been overseeing Redstone’s household and nursing staff.
“He is fully in charge of his own health care decisions today,†Dauman told investors Monday at the conference. “It is not a big secret that he is 92 and has physical ailments that require him to be under medical supervision.â€
The Redstone family, through its holding company, National Amusements Inc., controls nearly 80% of the voting stock in the two media companies, Viacom and CBS. Sumner Redstone controls 80% of National Amusements; his daughter Shari Redstone holds the remaining 20%.
Dauman explained that trustees have been designated to oversee Sumner Redstone’s stake in National Amusements after Redstone dies or when there is a legal determination that he is mentally incapacitated.
“Neither of which has happened,†Dauman said. “He has an incredible will to live... and to enjoy life.â€
The seven trustees includes two Redstone family members, Shari Redstone and her son, Tyler Korff. The group will make decisions regarding the family’s shares of the two media companies. Dauman is another of the trustees.
“There will be seven trustees... and each of them are independently minded but collectively, the group will make decisions,†Dauman said. “There is no one individual that will control the trust; [decisions] will be by a majority vote.â€
Redstone’s health was topic No. 1 at Viacom’s presentation at the UBS conference, which was held at a Hilton hotel in midtown Manhattan.
Investors were largely silent and attentive as Dauman immediately launched into his prepared points about the ailing mogul’s health and the future of Viacom and CBS. Dauman also made a call for those who write or speak about Redstone to “look in the mirror†and show some humanity when doing so.
That was an unusually emotional statement for an executive to make a such a gathering. “We should retain a sense of decency here,†Dauman said.
Herzer’s lawsuit, filed in Los Angeles County Superior Court, seeks to have Redstone declared mentally incompetent. A judge has ruled that Redstone’s healthcare situation is not an emergency and a hearing will be held early next year.
Redstone still is in command of his faculties, Dauman said.
“I’ve been with Sumner for three decades now, as his business associate and personal friend,†Dauman said. “Nothing has changed. I talk to Sumner frequently, several times a week.â€
Dauman said that he would not comment on the litigation, but acknowledged that he was named as Redstone’s agent in charge of his advance health care directive. Dauman was designated the representative three days after Herzer was told that she was no longer welcome at Redstone’s home in the Beverly Park section of Los Angeles, according to the court documents.
Until that time, Herzer had been the person overseeing Redstone’s household and nursing staff. Herzer wrote in a declaration supporting her lawsuit that she became an on-again, off-again girlfriend of the mogul in 1999.
During the last three years, she said she has been actively involved in Redstone’s healthcare and that his health has deteriorated in the last three months.
Staff writer Stephen Battaglio contributed to this report.
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