Shareholder sues Viacom, contends executives were overpaid
At companies where the rich keep getting richer, sometimes shareholders get upset.
August 22, 2012 at 07:12 AM
2 minute read
The original version of this story was published on Law.com
At companies where the rich keep getting richer, sometimes shareholders get upset. Such is the case at New York media company Viacom Inc., which is facing a lawsuit from one of its shareholders that claims it overpaid its executive chairman, Sumner Redstone, and two of his lieutenants by $36.6 million over four years.
The plaintiff, Robert Freedman, has been a shareholder at Viacom since 2005. He alleges in his suit filed on Aug. 17 that Viacom's board has not been following its own rules for calculating executive compensation. Freeman also accused the company of using a too-broad formula to calculate executive bonuses, which included criteria like “vision and leadership” and “continuing to navigate economic challenges,” the Los Angeles Times reports.
The three executives in question—Redstone, CEO Phillipe Dauman and COO Thomas Dooley—are among the highest paid executives in the U.S. Freedman's suit seeks to force the executives to pay back the company for what he considers to be overpayments, as well as asking for the ability for Class B shareholders to have a say in executive compensation.
Read more InsideCounsel stories about compensation:
Median starting salaries plummet
Dissecting Dewey's money management
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