Viacom chiefs got ’08 raises

Although Viacom Inc.’s stock took a beating in 2008, losing more than half its value, the media conglomerate’s chairman, Sumner Redstone, and its chief executive, Philippe Dauman, earned pay raises for the year.

Redstone was awarded a total compensation package valued at $12.1 million. Viacom said that given the decline in value of his stock options, Redstone’s actual take-home pay was $6.3 million. In 2007, the chairman took home $8.3 million.

Dauman’s total compensation package was valued at $23 million, nearly $3 million more than his 2007 package. His take-home for 2008 was $14 million, also as the result of a decline in value of stock options.

Still, the raises in pay raised some eyebrows.

“Their compensation correlation between pay and performance has been worsening,” said Robert McCormick, chief policy officer for Glass, Lewis & Co., a research firm that monitors executive compensation. McCormick said Glass Lewis gave Viacom a D for its executive compensation last year and indicated that “at an early glance” the company might be getting another D this year.

Viacom noted that the compensation packages for Redstone and Dauman were approved in February 2008 -- more than six months before the stock plunged -- and that there would be no salary increases for senior management in 2009.

Last year was a challenging one for Viacom, parent of MTV Networks and Paramount Pictures. The company laid off 800 employees and took a $454-million restructuring charge in the fourth quarter as it faced a tough advertising environment for its cable networks; slackening ratings at MTV, its flagship cable network; and a large decline in sales of DVDs and video games.

Viacom’s stock drop, along with the loss in value of CBS Corp., led in October to a default on bank loans by National Amusements Inc., the holding company through which Redstone controls the two media giants. That forced him to sell $230 million worth of shares in Viacom and CBS, pulling down the value of the stock even further.

To satisfy bankers and restructure debt, Redstone has been shedding some of National Amusements’ assets and has some of the family’s movie theaters on the block.

Redstone also sold video game company Midway Games Inc. at a huge loss last year. The 85-year-old Redstone is under pressure to repay National Amusements’ debt of $1.46 billion by the end of 2010.

Redstone and Dauman are not the first media chiefs to get pay raises in a bad year. Walt Disney Co. Chief Executive Robert Iger’s 2008 compensation package was valued at $30.6 million, compared with $27.7 million the year before. The compensation package for Peter Chernin, News Corp.’s outgoing president and chief operating officer, was almost $29 million, although the company’s stock has lost much of its value over the last year.

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joe.flint@latimes.com