Exclusive: Viacom to allow vote on expanding shareholder rights
By Ross Kerber and Jessica Toonkel
BOSTON (Reuters) - Viacom Inc (VIAB.O: Quote) will allow investors to vote in March on a proposal to extend voting rights to all shareholders, though the measure is certain to fail as it is opposed by executive chairman Sumner Redstone's holding company.
Still, the vote will test how much confidence minority shareholders have in Viacom's senior management, amid concerns over the health of 92-year-old Redstone.
Redstone controls about 80 percent of Viacom's Class A voting shares through his holding company, National Amusements Inc. Most outsiders hold Viacom's Class B shares, which do not have voting rights.
The proposal to extend voting rights to all shareholders came from Seamus Finn, director of socially responsible investing for Missionary Oblates, a Roman Catholic congregation in Washington which owns 4,000 voting Class A shares in Viacom.
The proposal called for a share recapitalization plan that would give all Viacom shareholders one vote per share, according to the proposal seen by Reuters.
Viacom spokesman Jeremy Zweig confirmed the plan to hold the vote at the company's annual shareholders meeting in March. He also reiterated Viacom's view that its dual-class share structure helps it focus on long-term goals.
Value investor Mario Gabelli, whose firm is the second largest holder of voting shares of Viacom with 10 percent, said he would not support Finn's proposal unless he was paid for giving up his voting shares.
"It makes no economic sense," Gabelli said in an interview, noting that it has taken his firm 17 years to accumulate its position in Viacom. "Why would I give up my right without economic compensation?" Continued...