|Former Viacom COO Mel Karmazin can collect his $1 million annual salary for the next two years and collect a generous package of benefits.
VIACOM CHIEF DETAILS SUCCESSION PLAN
Sumner Redstone's Comments Come Hours After Announcing Mel Karmazin's Departure
MEL KARMAZIN RESIGNS FROM VIACOM
Tom Freston and Leslie Moonves Named Co-COOs
In documents filed today with the U.S. Securities and Exchange Commission, Mr. Karmazin's departure from Viacom was spelled out as a "good reason" resignation, entitling the former president and chief operating officer to continue drawing his $1 million annual salary and a healthy package of benefits for the next two years.
Mr. Karmazin signed a new employment contract May 5, 2003, which covered his job at Viacom until May 5, 2006. The contract stipulated that if he were to leave with good reason, he would be entitled to his salary, bonuses, deferred compensation and several layers of fringe benefits throughout the contract's term.
The provisions of the contract include an annual bonus, based on the company's performance, which totaled $6.66 million in 2003 and can increase up to 10% each year, and deferred compensation, which totaled $2.99 million last year and could increase by a figure equal to 10% of the combined salary and deferred compensation for the prior year. With Viacom continuing to score TV ratings and box-office victories, the company is at the top of many analysts' favorite media stocks and is poised to outdo its stock performance this year, but the bonus decision rests with the board of directors' compensation committee.
Mr. Karmazin did agree to leave behind an option to acquire 550,000 shares of company stock granted to him May 19, but he will keep medical and pension benefits; will have right to an office and secretary in Viacom's headquarters for up to six months; and will remain as a consultant to Viacom for the next 60 days.