Shareholder Robert Freedman claims in his lawsuit Viacom wrongly overpaid Chairman Sumner Redstone and two top execs by more than $36.6 million from 2008 to 2011. He alleges Viacom’s board violated the company’s 2007 executive-pay plan with payments to Redstone, CEO Philippe Dauman and COO Thomas Dooley. Freedman asked a federal judge to force the three and board members named in the suit to repay the $36.6 million and to let Class B shareholders vote on the 2007 pay plan.
“Accepting that excessive compensation constitutes disloyalty, waste and is not the product of a valid exercise or business judgment,” according to the complaint, filed Aug. 17 in federal court in Wilmington, Delaware. “Such conduct also constitutes unjust enrichment.”
The $36.6 million represents the portion of their pay that Freedman claims violates the 2007 plan. The payments were based on subjective factors barred under the plan and under the U.S. tax code, according to the suit, filed by lawyers Brian E. Farnan in Wilmington and Alexander Gershon in New York, reports Bloomberg.
“The plaintiff’s complaint is filled with inaccuracies, and completely fails to make a valid claim for a variety of substantive and procedural reasons,” Viacom spokesman Jeremy Zweig told Bloomberg. “We are confident that Viacom’s compensation practices are fully compliant with the law, and consistent with our 2007 plan.”
Shareholders of Simon Property Group, the largest U.S. shopping-mall owner, sued that company’s board of directors on 8/8, accusing them of wrongly approving a pay package for CEO David Simon without first holding a shareholder vote. Simon was granted $120 million in special stock awards as part of the pay package.