- Action follows competency trial that revealed frail condition
- Directors had previously halted stock awards, bonus payments
Viacom Inc.’s board voted to stop paying its ailing chairman emeritus, Sumner Redstone, according to a person with knowledge of the matter, after court proceedings shed light on his frail state.
The board acted Wednesday, said the person who asked not to be identified discussing the private deliberations. Redstone, 92, who controls Viacom and CBS Corp., stepped down as chairman of both companies in February. He received $2.01 million in total compensation from Viacom in fiscal 2015, according to company filings, a drop from $13.2 million the previous year.
A lawsuit by an ex-girlfriend revealed the aging mogul to be in poor health, with round-the-clock nursing care and great difficulty speaking and eating. Manuela Herzer had sued to be reinstated as Redstone’s health-care agent. Los Angeles Superior Court Judge David Cowan, after viewing Redstone’s videotaped testimony, said the billionaire had clearly stated that he didn’t want Herzer involved in his health-care decisions. The judge said there were no legal grounds for him “not to follow his stated wishes.”
Redstone, who built a theater chain started by his father into a media empire with a stock market value of more than $40 billion, had already seen reductions in his pay. In 2012, Viacom stopped giving him share awards. In 2014, the company eliminated his cash bonus. CBS paid him $1.76 million in 2015, according to filings.
Viacom, the owner of MTV and Nickelodeon, fell 1.4 percent to $38.86 at the close in New York. The Class B shares are down 5.6 percent this year.
Redstone’s National Amusements owns 39.4 million Class A Viacom shares, according to data compiled by Bloomberg, and received about $63 million in the past year based on the company’s quarterly dividend of 40 cents.
Redstone’s saga is continuing to play out in court. The same day as Cowan dismissed her case, Herzer sued Redstone’s daughter Shari and her two sons along with members of the elder Redstone’s household staff over claims they interfered with her expected inheritance. Shari Redstone has called that lawsuit a “baseless attack” and “total fiction.”
Lawyers for Sumner Redstone have said that he will seek to recover $150 million that he lavished on Herzer and another ex-girlfriend.