We’ve written a lot in CEO Daily about shareholder activists. But what happens when the activist is a member of the founder’s family? That’s the position Viacom now finds itself in, having chosen CEO Philippe Dauman as its new chairman, over the objections of Shari Redstone, who owns 20% of the company’s stock. Redstone issued a statement yesterday pledging “to continue to advocate for what she believes to be in the best interests of Viacom shareholders” – which means this battle is far from over, and will continue to be a cloud over the company.
It’s a shame 92-year-old Sumner Redstone didn’t settle the succession issue while he still had the faculties to do so. But like so many others, Redstone thought he was going to reign forever, and couldn’t seem to contemplate his own replacement. Shari Redstone insists that a family trust agreement, never made public, gives her the right to succeed her father as non-executive chair of both CBS (CBS) and Viacom (VIAB). But the elder Redstone, who has fought openly with his daughter over the years, has publicly stated succession would be determined by the two companies’ boards. Shari Redstone agreed to Les Moonves becoming chair of CBS, but is demanding ABP – anyone but Philippe – at Viacom.
All this is playing out in the midst of a legal battle over the elder Redstone’s mental competence, with his ousted former girlfriend Manuela Herzer claiming in court documents that he has become a “living ghost,” while Shari Redstone counters his health has “flourished” since Herzer’s ouster. Shari says she has personally visited her father for 39 days since mid-November, and “patched up” their “very public disagreements.” You can read Peter Elkind’s report on the sad saga here.
As an aside, FORTUNE ran a story in 2007 about the anti-aging elixir that Redstone thought would keep him going indefinitely. If you share his delusions, you can read it here.
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