Settlement talks between Viacom (VIAB) Chief Executive Philippe Dauman and controlling shareholder Sumner Redstone have resumed after weeks of stops and starts, a source familiar with the situation told Reuters on Tuesday.
Settlement terms discussed include allowing Dauman to present to the board his plan to sell a stake in Paramount Pictures in exchange for his exit, according to two other sources, who requested anonymity because negotiations are confidential.
Dauman would be replaced by Viacom Chief Operating Officer Tom Dooley on an interim basis, the sources said, confirming earlier media reports.
A settlement would end litigation in Delaware and Massachusetts over the battle for control over 93-year-old Redstone’s $40 billion media empire. Dauman’s exit would be welcome news to Viacom shareholders who have hoped for change at the top of the company, whose ratings and advertising revenue have fallen sharply.
Under Dauman, shares of the parent of cable networks MTV and Comedy Central have tumbled more than 40% over the last two years.
On Tuesday evening, The LA Times reported that settlement talks had accelerated. The Wall Street Journal, citing people familiar with the situation, reported that one sticking point was when directors would leave Viacom’s board.
Representatives for Viacom and National Amusements, Redstone’s privately held movie theater company, declined to comment.
Redstone in May removed Dauman and board member George Abrams from Sumner M. Redstone National Amusements Inc Trust, which would control Viacom and CBS when the billionaire dies or is incapacitated.
In June, Redstone took steps to remove Dauman, Frederic Salerno and three other directors from Viacom’s board.
Dauman and Salerno, who claim that Redstone is being manipulated by his daughter Shari Redstone, contested their removals in separate lawsuits in Massachusetts and Delaware. She has denied those charges.
A spokeswoman for Shari Redstone declined to comment.
Dauman’s employment contract runs through the end of 2018. Under the terms of the agreement, he is eligible to receive up to $72 million in cash if he is terminated without cause or he resigns “with good reason,” according to regulatory filings by the company. He could potentially receive nearly $90 million in severance, according to compensation consultant Equilar.
A Massachusetts judge has set a Sept. 19 trial date for the litigation over Dauman’s removal from Redstone’s trust while Salerno’s case is scheduled for trial in October.