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Five Viacom directors are replaced in escalation of Redstone battle

Sumner Redstone and Shari Redstone in an undated photo.
Sumner Redstone and Shari Redstone in an undated photo.The New York Times

NEW YORK — Sumner Redstone’s National Amusements company announced Thursday that it had replaced five directors on the Viacom board, setting the stage for the firing of the company’s embattled chief executive.

The new directors are most likely aligned with Redstone’s daughter, Shari Redstone, who has publicly opposed Philippe P. Dauman in his position as chairman and chief executive of Viacom. The company has delivered weak results, and its share price has fallen about 35 percent in the last year.

The board shuffling includes two Boston-area business executives: Tom May, chairman of Eversource Energy, was among those added to the Viacom board, while George Abrams, an attorney who had been a longtime associate of the elder Redstone, was removed.

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By replacing five directors loyal to Dauman, the Redstones would have a majority on the 11-member board, giving them the power to oust him. National Amusements said it had removed Dauman as a director.

Philippe Dauman, Viacom chief executive and former Redstone confidante, is expected to be ousted from the Viacom board of directors.
Philippe Dauman, Viacom chief executive and former Redstone confidante, is expected to be ousted from the Viacom board of directors. Monica Almeida/New York Times

Through National Amusements, a private theater chain started by his father, Redstone controls about 80 percent of the voting shares in Viacom.

Thursday’s development is expected to incite yet another battle in the war already raging at Redstone’s $40 billion media empire. Viacom directors vowed last month to challenge any dismissals and had made preparations to take the battle to court, where they will probably argue that Redstone, 93 and in poor health, lacked the mental capacity to make decisions about the board. A Viacom spokesman could not immediately be reached for comment.

National Amusements tried to preempt those moves Thursday by filing documents in the Delaware Court of Chancery to validate the actions. Pending a final ruling, the company requested that the court temporarily maintain Viacom’s existing board and prohibit the board from “taking any action outside of the ordinary course of business.”

Sumner Redstone earlier sent a short letter to Viacom’s lead independent director, stating that he no longer trusted Dauman or those who supported him. “I am determined to act in the best interests of the company and all of its shareholders,” Redstone stated. “I do not trust you or the current board to do the same.”

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Here’s a look at who is in, who is out, and who remains on the Viacom board:

Who is in?

■  Kenneth Lerer: Lerer is a well-known New York venture capitalist and digital media executive. He is the managing partner at Lerer Hippeau Ventures, which has backed dozens of consumer tech companies including BuzzFeed, Birchbox, and Warby Parker.

■  Thomas May: May lacks the media industry name recognition compared with the other new directors. He is chairman of Eversource Energy, one of New England’s largest energy delivery companies, serving Connecticut, Massachusetts, and New Hampshire. May was chief executive of the company from 2012 until he retired in May 2016. May also is on the board of Bank of America.

■  Judith McHale: McHale’s career has spanned business and diplomacy. A lawyer by training, she worked as general counsel for MTV Networks in the 1980s. McHale served as chief executive at Discovery Communications from 1995 to 2006.

McHale was undersecretary of state for public diplomacy and public affairs at the State Department from 2009 until 2011. She now is the chief executive of Cane Investments, a private investment company based in Irvington, N.Y.. She also is on the boards of SeaWorld Entertainment, Ralph Lauren Corp., and Yellow Media Ltd.

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■  Ronald Nelson: Nelson’s background is a mix of business and media. Nelson is executive chairman of Avis Budget Group, the rental car company where he was chief executive from 2006 to 2015. Previously, Nelson was co-chief operating officer of DreamWorks SKG from 1994 to 2003.

■  Nicole Seligman: Seligman has worked in journalism, law, and business during the course of her career. In the late 1970s, she was the associate editorial page editor of The Asian Wall Street Journal. She later worked as a law clerk to Justice Thurgood Marshall on the Supreme Court and was a partner at the Washington law firm Williams & Connolly, where she represented President Bill Clinton during his impeachment trial.

Seligman later became president of both Sony Corporation of America and Sony Entertainment. She stepped down in March.

Who is out?

■  Philippe P. Dauman: The embattled chairman and chief executive of Viacom has been on its board since 1987. He formed a close bond with Sumner Redstone in the late 1980s while working as a young corporate lawyer, and that relationship fueled his ascent to the top of the company.

■  George Abrams: Abrams has been a Viacom director since 1987. In May, along with Dauman, he was ousted from the trust and the National Amusements board, and is challenging the dismissals in a Massachusetts lawsuit.

■  Frederic V. Salerno: Salerno was named Viacom’s lead independent director in March and has been on Viacom’s board since 1994. He is the retired vice chairman and chief financial officer of Verizon Communications. Until this year, Salerno was a director of CBS. He is aligned with Dauman.

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■  Blythe J. McGarvie: McGarvie has served on Viacom’s board since 2007. She is the former faculty of Harvard Business School and the former chief executive of Leadership for International Finance, a consultant group.

■  William Schwartz: Schwartz has served on Viacom’s board since 1987. He is a counsel in the New York office of the law firm of Cadwalader, Wickersham & Taft. He was dean of the law school at Boston University when Redstone taught an entertainment law class.

Who stays?

■  Sumner Redstone: In February, Redstone ceded his positions as chairman of Viacom amid questions from shareholders about his health and competency. He remains chairman emeritus and a director of Viacom and CBS and controls the two companies through National Amusements.

■  Shari E. Redstone: Redstone is the long-estranged, recently reconciled daughter of Sumner Redstone. She is the vice chairman of Viacom and CBS; president of National Amusements and managing partner of the venture capital firm Advancit Capital. Shari opposes Viacom’s leadership and has been accused by Dauman and his allies of manipulating her father to take control of his companies.

■  Deborah Norville: Norville, anchor of the newsmagazine TV show “Inside Edition,” has been on the Viacom board since 2013. While Norville is classified as an independent director, her show is produced by CBS, and Sumner Redstone also controls CBS.

■  Charles E. Phillips Jr.: Phillips, chief executive of Infor Global Solutions, has been on the Viacom board since 2004. He was president of Oracle.

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■  Thomas E. Dooley: Dooley is chief operating officer of Viacom and has been a member of Viacom’s board since 2006. He started at Viacom in 1980 and had been part of Sumner Redstone’s inner circle since the media mogul took over the company in 1987. Dooley stands to make as much as $63 million if Dauman is fired as chief executive and the job is not offered to Dooley.

■  Cristiana Falcone Sorrell: Sorrell, senior adviser to the chairman at the World Economic Forum, has been a Viacom director since 2013. She is married to Sir Martin Sorrell, chief executive of WPP, the world’s largest advertising company, which does business with Viacom.