National Amusements Blasts Viacom Leadership After Q3 Earnings Report

NORWOOD: Sumner Redstone’s National Amusements has released a statement calling for changes in the top leadership at Viacom, which just reported lower profits in its third-quarter results.

“Viacom’s overall performance continues to highlight the need for changes to leadership at the company, as National Amusements and many other investors have called for,” the company stated. “In recent years, the company’s senior management has overseen a steep erosion of revenue growth, earnings, operating performance, financial capacity and shareholder returns—with Viacom ranking at or near the very bottom of industry peers across many of these critical metrics. At the same time, there has been a significant exodus of creative and business talent. Viacom’s third-quarter performance does little if anything to change these adverse trends.”

National Amusements, which controls 80 percent of Viacom’s voting stock, took aim at CEO Philippe Dauman, whose contract was extended through 2018. Dauman was also promoted to chairman and was awarded $54.2 million in compensation for 2015. “Mr. Dauman is the third highest paid CEO in the United States and among the worst as measured by pay for performance,” the company said. “Including his pre-negotiated ‘golden parachute,’ he stands to receive almost a half billion dollars for a tenure that has seen the marked decline of one of the nation’s greatest media companies.”

Nevertheless, National Amusements said it remains “confident in the underlying value and potential of Viacom’s assets.”

National Amusements previously exercised its rights to appoint five new directors, “who will bring fresh, forward-looking thinking to the board. Other major investors have endorsed these new directors and urged the board to promptly replace current leadership.”

When National Amusements announced the new appointments, Viacom’s stock price went up 7 percent. “However, against the interests of all shareholders, the current board continues to allow Viacom to remain in a state of prolonged and costly paralysis, obstructing changes that are essential to revitalize the company’s assets and create long-term value.”

The company is calling for Viacom’s current directors to “stop supporting failed management and start representing shareholders, by allowing the new board to take the reins, and return the company to its position as an industry leader.”

Viacom has responded with a statement of its own: “Viacom continues to execute on its strategic plan, which is supported by a majority of its independent board.  As discussed by management on this morning’s earnings call, we are looking to the future and executing on the significant growth opportunities we see around the world. In contrast, It is unfortunate that one of our directors feels the need to try to damage the company in response to losses in the courtroom.”