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New Agreement Cuts Redstone’s Salary, Bonuses

Sep 25, 2006  •  Post A Comment

Viacom said Monday it has reached a new compensation agreement with Executive Chairman Sumner Redstone in which Mr. Redstone receives smaller cash salary and bonuses effective Jan. 1, 2007.

The new deal is supposed to immediately link the majority of Mr. Redstone’s compensation to shareholder returns.

Viacom’s new CEO, Philippe Dauman, and Chief Administrative Officer Tom Dooley have similar compensation plans. Mr. Redstone hired those executives to replace CEO Tom Freston because Viacom stock fell under Mr. Freston’s tenure.

Under the agreement, Mr. Redstone’s salary will be $1 million a year, down from $1.75 million. His cash bonus is cut from $6.1 million to $3.5 million. He also will receive stock options with a value of $3 million.

On top of that, Mr. Redstone will receive performance share units worth $3 million, which could rise in value based on Viacom’s stock performance compared with the Standard & Poor’s 500 Composite Index.

“This is a highly progressive arrangement that will put the compensation of Viacom’s most senior executives directly in line with the interests of its shareholders,” said Robert Kraft, chairman of the compensation committee of Viacom’s board.