Mel Karmazin Stays With Viacom
NEW YORK (Reuters) - Viacom Inc. said on Thursday its No. 2 executive Mel Karmazin has signed a deal that will keep him with the company through 2006, removing a specter of uncertainty that has weighed on the media conglomerate's stock for more than a year.
Tensions between Karmazin and Sumner Redstone, Viacom's chairman, chief executive and controlling shareholder, had raised the prospect that Karmazin might leave the company, whose holdings include MTV, CBS and Paramount Studios.
While Redstone said he wanted Karmazin to say, he also indicated he wanted to retake some of the daily operating controls Karmazin had as part of his last contract, hammered out when Viacom and CBS merged in 2000. Karmazin, lauded by Wall Street for his focus on profits, had indicated he did not want to give up that control.
The uncertainty over Karmazin's future with the company has pressured Viacom's stock, and many investors had said his exit would further hurt the stock in the near-term.
Both Redstone and Karmazin signed new employment contracts effective May 3, 2003, Viacom said in a statement, with Karmazin's contract running through May 3, 2006. Details of the contracts, including whether Karmazin was forced to give up operational controls, were not immediately available, but Viacom said it would provide further details in a filing with securities regulators.