Exclusive: Viacom should end non-voting stock, give vote to all investors - California fund
By Ross Kerber and Jessica Toonkel
BOSTON/NEW YORK (Reuters) - An official for the second-largest U.S. public pension system on Thursday urged Viacom Inc (VIAB.O: Quote) to do away with its dual-class share structure, the latest call from an investor for change at the media empire controlled by the aging mogul Sumner Redstone as doubts grow over his ability to lead.
Redstone, 92 years old, controls about 80 percent of the voting rights at Viacom, and the company has a second class of shares with no voting rights. The California State Teachers' Retirement System has 1.1 million non-voting shares.
"Ideally we think there should be a one-share, one-vote capital structure," said Aeisha Mastagni, an investment officer for the $184 billion system known as CalSTRS, in an interview on Thursday.
While not a top-20 investor in Viacom, CalSTRS is an influential activist shareholder and has supported calls for the end of dual-class structures at other companies. It has not previously focused on Viacom.
Mike McCauley, senior officer at the Florida State Board of Administration, which has $144 billion in pension assets and is another high profile voice on governance with a mid-sized stake in Viacom, said on Thursday that he also supports the idea that Viacom should move to a one-share, one-vote capital structure.
Viacom has denied any issues with Redstone's mental capability. Asked about its share structure, Viacom spokesman Jeremy Zweig said via email that "we believe that it has contributed, and continues to contribute, to our stability and long-term stockholder returns."
He added that it "allows investors an opportunity to participate financially in companies in which the existing owners may not wish to part with voting control.”
Other media companies use dual-share class structures as well, making similar arguments that they can help stave off attacks by activist investors. Continued...