May 25 (Bloomberg) -- Viacom Inc., owner of MTV Networks and Paramount Pictures, increased its quarterly dividend by 67 percent to 25 cents a share, boosting the yearly payment to Chairman Sumner Redstone’s family company to $41 million.
The new dividend will be payable July 1 to shareholders of record on June 15, New York-based Viacom said today in a statement. The previous dividend was 15 cents and was projected to increase to 18 cents, based on data compiled by Bloomberg.
“Viacom is in excellent shape financially and momentum across our businesses is strong,” Philippe Dauman, chief executive officer, said in the statement. The action reflects “the confidence we have in our ability to generate ample free cash flow to support returning greater value to our stockholders while continuing to maintain a strong balance sheet and invest in the long-term growth of our operations.”
Redstone, who turns 88 in two days, controls Viacom through his holdings of the company’s voting stock, which represents less than 10 percent of the total equity. CBS Corp., Redstone’s other key holding, voted this month to double its quarterly dividend to 10 cents a share, increasing the annual payment to his National Amusements company to about $17 million.
Viacom rose 1 cent to $49.95 at 4:01 p.m. in New York Stock Exchange composite trading. The nonvoting Class B shares have advanced 26 percent this year. CBS fell 3 cents to $26.33 and has gained 38 percent.
The dividend gains represent a partial restoration of income Redstone and other CBS shareholders received before the 2008 U.S. recession and financial crisis. In February 2009, New York-based CBS cut its quarterly dividend to 5 cents a share from 27 cents as advertising sales fell and the company faced bond maturities in 2010.
National Amusements sold almost $1 billion of stock in both companies in 2009 to repay loans.
Redstone owns 41.4 million Viacom voting shares, or 80 percent of the voting stock, along with 1,296 nonvoting shares, according to company regulatory filings. He holds 34.5 million voting shares of CBS, or 79 percent of that class, and 8.26 million nonvoting shares, filings show.
He also collected more than $35 million in total compensation from both companies in 2010, filings show.
To contact the reporter on this story: Rob Golum in Los Angeles at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Palazzo at email@example.com