Viacom extends COO Tom Dooley’s agreement; names lead independent director

Viacom has ended the intrigue surrounding a key question: Will Chief Operating Officer Thomas E. Dooley stick around?

On Thursday, the media company that owns cable channels MTV, Comedy Central, Nickelodeon and BET and Paramount Pictures film studio extended Dooley’s employment contract through Dec. 31, 2018.

His pact was set to expire at the end of this year.

Dooley, 59, is an important figure at the media company and, thus, his contract situation was being watched by Wall Street. Viacom shares gained $1.22, or 3%, to $41.48 -- perhaps enjoying a Dooley bounce.

He joined Viacom in 1980 and continues to be a favorite among rank-and-file employees as well as some investors. He also has worked closely with Viacom Chief Executive Philippe Dauman for 30 years and serves on the Viacom board.

In fact, Dooley’s compensation illustrates his importance in the food chain. He was paid $29.4 million in the last fiscal year -- more than most CEOs in the U.S.

Dooley last fall became an alternate proxy for Viacom founder Sumner Redstone’s advance healthcare directive, in the second position behind Dauman. The move demonstrated the fondness that Redstone, the 92-year-old company founder, has for Dooley.

“He has done an excellent job in helping to reorient Viacom’s operations to succeed in the changing media environment, spearheading the creation of the industry’s best-in-class data-focused advertising products, and driving effectiveness and efficiency throughout the company,” Dauman said Thursday in a statement announcing the new agreement.

Dooley did not receive a signing bonus and his compensation structure will not change in the new employment agreement, Viacom said.

The media company did not provide a copy of Dooley’s new employment agreement to the Securities & Exchange Commission, but said that it plans to do so in a few weeks.

Viacom has been under pressure from shareholders to improve its corporate governance, particularly after it became public that Redstone was in poor health and largely confined to his mansion overlooking Beverly Hills.

Redstone last month stepped down as executive chairman of the two companies that he controls, Viacom and CBS Corp., several days after an examination by an outside psychiatrist.

The doctor was called in to examine Redstone as part of a lawsuit by a former female companion.

Viacom this week held its annual shareholders meeting in Florida. It also said that Frederic V. Salerno was elected as the lead independent director to represent the interests of shareholders outside the Redstone family, which controls 80% of the voting stock.

“The addition of a lead independent director will enhance Viacom’s corporate governance practices, which already include a majority of independent directors and board committees that are comprised solely of independent directors,” Viacom said Wednesday in a statement.

Salerno, however, received the smallest vote totals of any Viacom board member up for reelection. Advisory group Institutional Shareholder Services had recommended that investors withhold their votes, in large part, because Salerno serves on Viacom’s compensation and corporate governance committees.

Viacom has been criticized for the huge compensation it lavishes on top executives. Last year, Dauman’s compensation package was valued at $37.1 million.

Salerno, retired vice chairman of phone company Verizon Communications, received the votes of 76% of the non-Redstone shares.

Sumner Redstone, meanwhile, was also up for reelection. He received nearly 95% of the votes of the non-Redstone shareholders.

Viacom’s share price is down 40% in the last 12 months.

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Twitter: @MegJamesLAT