Defying the wishes of some activist investors, Philippe Dauman is succeeding Sumner Redstone as the executive chairman of Viacom.
Dauman, the CEO of Viacom, was elevated to chairman in a board of directors vote on Thursday morning.
Redstone, whose deteriorating health has been a cause for Wall Street concern, gave up the chairmanship of his other company, CBS Corporation, on Tuesday. CBS CEO Les Moonves was named the new chair on Wednesday.
The twin announcements symbolize the beginning of the end of the Redstone era. He will be chairman emeritus of both companies.
The transition at Viacom — the owner of MTV, Nickelodeon, BET, Comedy Central, and Paramount Pictures — had an added layer of intrigue because of Redstone’s daughter Shari.
On Wednesday evening, after nominating Moonves to take the CBS chairman position, she suggested that she did not want Dauman to succeed her father as Viacom chairman.
“It is my firm belief that whoever may succeed my father as chair at each company should be someone who is not a trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice,” Shari Redstone said in a statement.
The comments seemed aimed at Dauman, who is both a trustee of the elder Redstone’s trust and Sumner’s personal health care agent.
But Shari Redstone apparently did not have the necessary support from other board members to install someone else as chairman.
Shari Redstone was the lone vote against Dauman, a source close to the company told CNNMoney. The Viacom announcement said that Shari Redstone was offered the position of non-executive chairman, but she turned it down. She will remain as non-executive vice chair.
Viacom board member William Schwartz said in a statement, “In choosing a successor to Sumner, the board considered the need for seasoned leadership in this time of unprecedented change… We believe his becoming executive chairman is in the best interests of the company and all shareholders.”
Viacom stock was up about 2.8% at the time of the announcement.
Viacom has underperformed other major media companies, including CBS, during a period of rapid change and turnover in the television business.
Springowl Asset Management, an activist fund, cited Moonves’ appointment at CBS when it renewed its efforts to remove Dauman and Redstone.
“We strongly urge management and the board to appoint an independent director as executive chairman and that it not be Philippe Dauman,” Springowl said in a statement Wednesday night. “We hope management and the board will continue to act responsibly in addressing Viacom’s depressed stock price relative to its much higher asset value.”
Shari Redstone confirmed in her statement that “my father’s trust states his intention that I succeed him as (non-executive) Chair at CBS and Viacom, and also names me as a trustee after his death.”
She concluded, however, that Moonves was the right individual to “lead CBS into the digital future.”
She did not mention Dauman by name in the statement.
And Sumner himself had no comment on any of the maneuverings.
Widely read media analyst Michael Nathanson called the Redstone news “change we can believe in.”
“Thinking about what this change for CBS and Viacom could mean for the broader media landscape, we believe that changes for the Redstone controlled empires could be the trigger for media company consolidation as each company will be forced to figure out if they are a buyer or seller in the coming months,” Nathanson wrote in a note to investors.
Redstone’s health is a matter of much speculation. In recent months his competency has been repeatedly challenged in court proceedings.
Court papers filed by an ex-girlfriend last fall described Redstone as a “living ghost” who is practically unable to make decisions for himself.
Manuela Herzer described him as “vacant, expressionless and out of touch.” She said he was basically unable to talk and “cannot walk or stand by himself.”
But Dauman has challenged many of her accusations.
