Viacom’s Redstone Gets Pay Totaling $56 Million, Up 58%

Viacom Inc. paid its chief executive, Sumner Redstone, $56 million in total compensation in 2004, an increase of 58% from the year before, even as the entertainment giant’s share price declined 18% last year.

Redstone drew a $5-million salary last year and received a $16.5-million bonus, as well as options for 2 million of the company’s shares that were valued at $34.4 million, according to a document the company filed Friday with the Securities and Exchange Commission.

The previous year, the 81-year-old media mogul drew a salary and bonus of $19 million and was granted options worth $16.4 million, bringing his total compensation to $35.5 million.

Redstone, who controls Viacom and has amassed a fortune worth an estimated $8 billion, paid his two top lieutenants last year almost as much as he made.

Tom Freston and Leslie Moonves, who became co-presidents last July after the sudden resignation of Mel Karmazin, each made about $20 million in 2004 salaries and bonuses. In addition, they each received options valued at about $32 million, bringing their total compensation to about $52 million apiece.

Analysts said the pay packages were rich considering the company’s track record.

“They should spend less time paying themselves and more time getting the company to perform,” said Richard Greenfield, an analyst at Fulcrum Global Partners, who noted that after splitting Karmazin’s job, Viacom was now paying top dollar for three executives rather than two.

Viacom said it set executive compensation based on the company’s financial performance rather than its stock price. Viacom’s cash flow increased 17% last year.

Even so, Redstone, frustrated by the company’s stock slump, is considering cleaving the company into two separately traded entities. He believes Freston’s faster-growing cable programming group, which includes MTV, Comedy Central and Nickelodeon, will be able to make acquisitions and expand more quickly if it is freed from the slower-growing broadcasting businesses. Managed by Moonves, those divisions include CBS and Infinity Broadcasting.

Since the proposed separation was disclosed last month, Viacom’s share price has dropped about 5%, suggesting that many investors don’t believe in the merits of the proposed divorce.