Viacom Inc. wrongly overpaid Chairman Sumner Redstone and two top executives by more than $36.6 million from 2008 to 2011, a shareholder claimed in a lawsuit.
Shareholder Robert Freedman alleged that Viacom’s board violated the company’s 2007 executive-pay plan with payments to Redstone, Chief Executive Officer Philippe Dauman and Chief Operating Officer Thomas Dooley. Freedman asked a federal judge to force the three executives and board members named in the suit to repay the $36.6 million and to let Class B shareholders vote on the 2007 pay plan.
“Accepting that excessive compensation constitutes disloyalty, waste and is not the product of a valid exercise or business judgment,” according to the complaint, filed Aug. 17 in federal court in Wilmington, Delaware. “Such conduct also constitutes unjust enrichment.”
The $36.6 million represents the portion of the men’s pay that Freedman claims violates the 2007 plan. The payments were based on subjective factors barred under the plan and under the U.S. tax code, according to the suit, filed by lawyers Brian E. Farnan in Wilmington and Alexander Gershon in New York.
Carl Folta, a spokesman for New York-based Viacom, and Carole Robinson, a spokeswoman for the Viacom-owned MTV Networks Co., didn’t immediately respond to e-mails seeking comment on the lawsuit.
The case is Freedman v. Redstone, 12-cv-01052, U.S. District Court, District of Delaware (Wilmington).