Viacom Overpaid Redstone, CEO & COO Millions, Shareholder Lawsuit Claims

Robert Freedman claims that Viacom chairman Sumner Redstone, CEO Philippe Dauman and COO Thomas Dooley were overpaid $36.6 million and the shareholder is taking the trio to court to get the money back. In a 17-page complaint (read it here) filed on August 17, Freedman says that between 2008 and 2011 the three were incorrectly awarded millions by Viacom’s board’s compensation committee in direct violation of the company’s own 2007 executive pay plan.  Calling the payments “unjust enrichment” and based on “subjective measure,” the Viacom shareholder wants the court to compel Redstone, Dauman and Dooley, as well as the several compensation committee members named as defendants, to repay the $36,645.750 plus his legal fees. Not that big payouts are anything new for the three at Viacom. In 2011, Dauman received $43.1 million from the company in salary, stock and other compensation. That was down from the $84.5 million he made in 2010 but that’s in part because of the big resigning bonus Dauman got when he renegotiated his contract that year. COO Dooley made $34.1 million in 2011 and Redstone took home $21 million as executive chairman. In the action, filed in federal court in Wilmington, Delaware, Freedman also wants the court to force Viacom to not pay such “excessive compensation” again and to let Class B shareholders to vote on the 2012 executive pay plan approved at Viacom’s annual meeting on March 8, 2012. Only Class A shareholders have that right presently and Redstone hold 80% of the company’s Class A stock. The 2012 plan is virtually the same as the 2007 Senior Executive Short-Term Incentive Plan that lies at the heart of this action. As one would expect, Viacom politely disagrees with Freedman’s suit. “The Plaintiff’s complaint is filled with inaccuracies and completely fails to make a valid claim for a variety of substantive and procedural reasons. We are confident that Viacom’s compensation practices are fully compliant with the law, and consistent with our 2007 plan,” said Viacom in a statement. Robert Freedman is represented by New York firm Barrack, Rodos & Bacine and Wilmington firm Farnan LLP.

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