In our opinion, any compensation committee that authorizes the following statement should be voted out of office at the next annual meeting:
“Viacom also points out that $18 million in equity awarded to Dauman in 2015 has a current real-value of zero and will rise as the stock price increases.”
We thought we were done with this outrageous claim back in the days of arguing about whether options should be expensed. There are option pricing models that assign values to these awards and zero is not the value they assign.
One week after an activist shareholder published an online 99-frame slideshow excoriating Viacom’s allegedly overpaid management, SpringOwl Asset Management will strike again on Monday with an article at Jim Cramer’s TheStreet.com.
This time around, SpringOwl’s managing director Eric Jackson will focus on CEO Philippe Dauman’s fiscal 2015 compensation of $54.15 million and the unusual way Viacom first disclosed it last week via a press release that left out a $17 million bonus and other tidbits, thus indicating he was paid $36.9 million. A few days later, an SEC filing revealed Dauman’s full compensation.
“Instead of a pay decrease in 2015 related to the stock dropping in half, Dauman’s pay actually increased 23 percent year-over-year,” Jackson writes in his soon-to-publish article. “For Viacom shareholders, it’s shocking. It certainly appears as though the company was doing everything it could to cloud this payment and make it appear to shareholders that his pay went down. Did they not think anyone would notice?”