Viacom shareholders re-elect directors, reject voting rights proposal

Mon Mar 14, 2016 6:23pm EDT
 
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By Jessica Toonkel

MIAMI (Reuters) - A substantial majority of Viacom Inc's (VIAB.O: Quote) independent shareholders on Monday voted to re-elect the media company's directors and rejected a move to extend voting rights to all shareholders, going against recommendations by the leading proxy advisory firm.

By backing the directors and rejecting the proposal, investors are effectively giving Viacom Chief Executive Philippe Dauman more time to improve sliding viewer ratings at the company best known for owning MTV, Nickelodeon and Comedy Central.

The shareholder vote comes as no surprise given that 80 percent of Viacom's Class A voting shares are owned by 92-year-old longtime leader Sumner Redstone, through his holding company National Amusements Inc. Viacom's more numerous Class B shares, which make up most of the stock's day-to-day trading, do not have voting rights.

In preliminary numbers disclosed on Monday, the proposal for a single share-class structure, which would have given all shareholders voting rights, won about 4 percent of the total vote, representing about 20 percent of the independent voting shareholders, assuming all holders of Class A shares voted. The final tally will be disclosed in a securities filing in the next few days, according to a spokesman.

Kevin McManus, vice president of proxy adviser Egan-Jones, said the support from independent investors to the proposal appeared to be significant, given it was the first year for the measure. "It’s a shot across the bow" for management, he said.

Viacom's shares closed up 1.2 percent at $39.76 on Monday.

The meeting, at Viacom's new international studios in Miami, was sparsely attended, with only about 30 people present. Redstone did not show up, the second year in a row he has not attended. He has not spoken on an earnings call since 2014. His daughter Shari Redstone, a member of Viacom's board, was present, but did not speak.

Viacom has faced mounting investor concern about Redstone's mental competence after ex-girlfriend Manuela Herzer filed a lawsuit referring to the media mogul as a "living ghost," incapable of making decisions when he removed her last year as his health care agent in favor of Dauman.   Continued...

 
A woman exits the Viacom Inc. headquarters in New York April 30, 2013. REUTERS/Lucas Jackson