(Associated Press via NewsEdge) Viacom, a media conglomerate that owns MTV and VH1, said it was cutting the cash salary and bonuses of its chairman and controlling shareholder, Sumner Redstone, and linking most of his compensation with the performance of the company's stock.
The new employment agreement ties Redstone's pay more closely with the interests of shareholders.
It is also in line with similar pay packages the company gave to Philippe Dauman and Thomas Dooley, two longtime confidants of Redstone who recently returned to run the company after Redstone ousted former CEO Tom Freston.
Under the new agreement, beginning in 2007, Redstone's salary will be reduced to $1 million per year from $1.75 million and deferred compensation of $1.3 million per year will be eliminated.
Also, Redstone's target cash bonus will be reduced to $3.5 million per year from $6.1 million. He will also receive an annual award of stock options having a grant-date value of $3 million and an annual award of performance share units with a grant-date target value of $3 million.
The value of those units will depend on the return of Viacom's stock compared with the Standard & Poor's 500 index over a certain period, usually three years, the company said in a statement. In some cases earnings per share will also be taken into account.
Viacom had drawn scrutiny from shareholders last year with the lavish compensation packages awarded to Redstone and his two top lieutenants at the time, Freston and Leslie Moonves.
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