Tuning in to Viacom exec’s new comp deal…

August 11, 2010

The 10-Q that Viacom, Inc. (VIA) filed August 5 was just the reminder we needed to tell you about a juicy agreement that was signed several weeks ago.

The document in question is the May 27, 2010 Employment Agreement between Viacom and Thomas Dooley; it’s Exhibit 10.1 to the 10-Q. (Viacom actually first disclosed its terms in an 8-K that it filed with the SEC at 4:15 p.m. on the Friday leading into the Memorial Day weekend.)

As employment agreements go, this one’s sweet. Viacom promoted Dooley, its Senior EVP, Chief Administrative Officer and CFO, to the newly created post of Chief Operating Officer. (He agreed to remain as interim CFO until the job was filled.) Besides the promotion, the agreement extended Dooley’s term with Viacom through the end of 2016.

The move was strategic, at least according to this article, which said that Dooley’s promotion elevated him to the role of —Chief Executive Philippe Dauman’s top lieutenant and potential successor.

Per the new agreement, Dooley will continue to receive the $2.5 million annual base salary set for him on January 1, 2010. The board’s compensation committee will review Dooley’s salary —at least annually, and it can increase – but not decrease – that number.

Dooley is also eligible for an annual cash bonus with a 2010 target level of $9.5 million (a nice $1.5 million boost from his prior target of $8 million). And, like his salary, Dooley’s target bonus can increase, but not decrease.

In addition, Viacom gave Dooley 800,000 performance restricted share units (PRSUs) on May 27, 2010 that will vest over four years and are tied to the company’s financial performance. On June 2, it also gave him a stock options grant that enables him to purchase 1.6 million shares of Class B common stock. That, too, will vest in four equal annual installments.

While the filing notes that Dooley’s annual equity awards will remain unchanged, they’re worth a collective $9.6 million per year – $4.8 million as an annual grant of performance share units (PSUs), and $4.8 million as an annual grant of stock options.

And last, but not least, Dooley’s benefits package includes the retention of a $5 million life insurance policy payable to Dooley’s chosen beneficiaries, as well as the use of a car service, office and secretarial services.

According to the 2010 proxy, Dooley joined “Former Viacom” in 1980 and – except for stints away from the company, such as for the 2000 merger with CBS Corporation – worked his way up to a total compensation package worth more than $27 million in 2009. Given Dooley’s new employment agreement, we suspect the number will be even higher come next April’s proxy.

Image source:MSN Health

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