Viacom's new lead independent director pledges close eye on strategy

Thu Mar 17, 2016 10:17am EDT
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By Jessica Toonkel

NEW YORK (Reuters) - Viacom Inc's (VIAB.O: Quote) new lead independent director pledged on Wednesday to represent all of the media company's shareholders and improve board and management coordination, including on potential mergers and acquisitions.

On Wednesday, Viacom, which owns MTV, Comedy Central and Paramount, named Frederic Salerno, former vice chairman of Verizon Communications Inc (VZ.N: Quote) and a Viacom board member, as its first lead independent director as the New York-based company looks to counter investor criticism of its corporate governance.

As first reported by Reuters earlier on Wednesday, Viacom's board was looking to name one of its independent board members to the new role to assure independence after it voted to make Chief Executive Philippe Dauman executive chair last month. He replaced Sumner Redstone despite calls by the 92-year-old media mogul's daughter for an "independent voice" in that position.

Roughly a quarter of the independent shares voted was in opposition to Salerno's reelection to the board on Monday, the lowest level of support among board members. But overall, investors cheered the move on Wednesday, and Viacom's stock rose 3.7 percent.

Salerno told Reuters he wanted to ensure Viacom's independent directors had a good handle on every aspect of Viacom's business, including mergers and acquisition activity. Last month, Dauman said the company was looking to sell a "significant stake" in Paramount.

"The priorities are that we clearly understand the strategic plan that exists and to make sure it's holistic enough for each and everyone of the directors to not only understand it but to be able to input their views as to the doability [and] the appropriateness," he said in an interview on Wednesday after the announcement.

"We will make sure that we represent all shareholders, which is important in a controlled company," he added.

Proxy adviser Institutional Shareholder Services recommended that Viacom investors withhold support for six of the company's directors, including Salerno, who chairs the compensation committee, citing concerns about executive pay.   Continued...

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