Updated with compensation information: Tom Dooley’s tenure as Viacom’s interim CEO didn’t last long. He says this morning that he will leave on November 15 — as the company, following lengthy board meetings, said it has “ended the process of seeking a minority investor in Paramount Pictures at this time, in order to consider all options available to the Company.”
Viacom directors also acknowledged that the company needs more cash: They announced a plan to cut its dividend payout in half to 20 cents a share and increase borrowing.
“These actions are designed to balance the Company’s focus on a strong balance sheet and its strategy to invest in world class content and pursue opportunities to grow its core businesses,” the company says.
Meanwhile, Viacom cut its earnings estimates for the September quarter due to a $115 million impairment charge for Paramount “related to the expected performance of an unreleased film” as well as severance expenses likely due to the the exit agreement for former CEO Philippe Dauman.
Viacom now expects adjusted earnings for the quarter to come in between 65 cents and 70 cents a share. Analysts had been looking for 91 cents. The stock price is off a little less than 1% in early trading this morning, and is down more than 20% for the last 12 months.
“The Board believes Viacom has a product strategy that is among the best in the industry. The steps we are taking will make the Company financially stronger and more flexible and will position Viacom to take advantage of future growth opportunities,” Chairman Tom May says.
Vice Chair Shari Redstone says she’s “energized by the passion, commitment and ideas put forward by our newly-expanded board and members of Viacom’s senior team. While there is more work to do, the actions announced today are an important first step towards realizing the value of Viacom’s exceptional assets and positioning the Company for the future.”
And Dooley says that while his decision to leave was “difficult” the board “will be best able to execute on their vision for the Company in the hands of a new President and CEO. I am certain that the Board will make the most of the Company’s extraordinary potential.”
Viacom disclosed in an SEC filing that Dooley will receive a $4.38 million “Retention Payment” to extend his tenure from the end of this month — when his interim CEO arrangement was due to expire – to mid-November. He’ll see that in a lump sum payment on November 23, and it will not be construed as adjustment to his salary or bonus when computing his severence.