❗Let's close the gap: We still need your help to raise $40,000 by April 1. Donate now

Redstone takes a pay cut

Sarah Gardner Sep 26, 2006

TEXT OF STORY

SCOTT JAGOW: The media mogul who just told Tom Cruise to take a hike is taking a pay cut. Viacom chairman Sumner Redstone will lose half his salary and cash bonuses. Sarah Gardner reports.


SARAH GARDNER: Under the new arrangement, Redstone will still pull in over $4 million in salary and cash bonuses a year, but most of his compensation will now be linked more directly to Viacom’s stock price.

So, is Redstone in the doghouse? Hardly, says compensation consultant Brian Foley.

BRIAN FOLEY:“I’m assuming that this is a mutual decision. He’s obviously a major force within Viacom.”

Foley says Viacom wants to send Wall Street a message that despite the 83-year-old chairman’s imperious reputation, his interests are closely aligned with shareholders.

But analyst Robert Routh at Jefferies and company believes Redstone could have gone further.

ROBERT ROUTH: “Why couldn’t he completely give up his entire cash compensation and bonus as Steve Jobs did at Pixar and take a dollar?”

In 2004, Redstone’s annual compensation hit $56 million, counting stock options.

I’m Sarah Gardner for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.