Viacom execs rake in big pay
The three top executives of media company Viacom Inc. received a total compensation of nearly $165 million in fiscal 2010, underscoring that despite tougher times for the entertainment business, the industry’s executives continue to rank among the highest paid in America.
The disclosures came in a Securities and Exchange Commission filing by Viacom, which owns Paramount Pictures and cable television channels MTV, Nickelodeon and Comedy Central.
Chief Executive Philippe Dauman was awarded salary, stock and other benefits totaling $84.5 million in the fiscal year, which comprised the first nine months of 2010, according to the documents filed Friday. That was up from $34 million in fiscal 2009.
The company’s second-in-command, Thomas Dooley, received a compensation package worth an estimated $64.7 million, compared with the $27-million package he got in fiscal 2009.
“Those are amazing numbers,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “Those are entrepreneurial returns for a managerial role. I’ll be interested to see what the investors think.”
Viacom had a strong year as its marquee property — MTV Networks — rode a wave of ratings success based on the popularity of its hit show “Jersey Shore.”
Mid-year, the company changed its fiscal year and it now concludes on Sept. 30. Thus, Viacom reported nine months of salary information — Jan. 1 through Sept. 30 — in its proxy. The executives’ compensation would have been several million dollars higher if the period had been 12 months.
Dauman’s compensation included a one-time stock award valued at $31.65 million, an amount that was not paid to him during 2010 but will vest over the next five years if the company achieves certain performance goals. Accounting rules mandate that companies declare such an award, and its potential value, in the fiscal year that a grant was made. The shares could change in value before they vest.
The award was bestowed on Dauman, 56, in April as a signing bonus after he extended his employment contract 6 1/2 years.
Dooley, 54, the chief operating officer, signed a new 6 1/2-year contract in May. He was awarded a signing bonus stock allocation valued at $24.2 million. Like Dauman’s, his shares could change in value before they vest.
The company’s 87-year-old controlling shareholder and executive chairman, Sumner Redstone, received compensation worth $15 million in fiscal 2010. Viacom has two classes of shares, with Redstone holding 79% of the voting shares.
“This points out the difficulty of dual-class stock,” Elson said. Holders of the common shares, he said, have relatively little sway in setting policies.
“If the investors object [to the executives’ compensation], there is little they can do about it,” Elson said.
The company defended the amounts, saying that compensation of its top executives was based on performance measures. Viacom’s common shares increased in value 22% for the nine months covered in the reporting period, outperforming the market.
“About 90% of the 2010 compensation is long-term equity awards that align our executives’ interests with those of our stockholders,” Viacom said in a statement. “The majority of 2010 compensation is one-time equity grants related to the previously announced long-term extensions of employment agreements, which vest over the life of those agreements.”