Annual meeting March 14, 2016
With a sharp fall in stock price and a tremendous increase in pay for CEO Phillippe Dauman (to an astonishing $54 million); Viacom may seem like a candidate for a significant vote against compensation. However, only one class of shares can vote at the annual meeting, and Sumner Redstone controls 80% of those shares. Those shares were voted a few years back to avoid even having an annual advisory vote on pay.
The increase in Dauman’s compensation, included an extraordinary “contract renewal” payment of over $17 million. ISS issued a recommendation against six of the directors up for election, in part based on concerns regarding board independence. As quoted in a New York Times article, ISS noted, “These ties, along with ongoing concerns over executive compensation and independent oversight at Viacom, call in to question the board’s willingness to represent the interests of minority shareholders going forward.”
The second largest shareholder of voting shares, Mario Gabelli with over 5 million shares, is quoted in the same article as saying “There is nothing you can do. It is moot.”
Gabelli could have, however, voted against directors or in favor of a shareholder proposal seeking to get rid of the dual class structure. Based on the 8-k released March 16 it appears that he did not. This should not be surprising, Gabelli did not vote against a single compensation plan on our list of overpaid CEOs last year.
As Viacom’s proxy statement noted, “Holders of our non-voting Class B common stock are not entitled to vote at the Annual Meeting, . . . , and will receive this proxy statement and related materials only for informational purposes.” Perhaps the information gleaned could be used to re-evaluate whether holding shares in a controlled company is a wise investment.