One day after abruptly resigning as Viacom President/COO, Mel Karmazin says the reason for his sudden exit was he just couldn't take the tension between him and CEO Sumner Redstone any more. "If there needs to be a reason, it is that I thought, maybe naively, that this issue of Mel-Sumner would go away. Clearly the issue is not going away," Karmazin told The Washington Post. There was no single issue or disagreement that triggered his departure, he added.
With a famous history of friction between the two strong-willed executives, it comes as no surprise that their explanations of yesterday's dramatic events don't exactly match up. Redstone said on Tuesday that Karmazin was "frustrated" by Viacom's stock price and by Infinity Broadcasting's operating results. And that Mel was indeed a candidate to succeed him as top executive at Viacom -- until he took his name out of the running by resigning.
But Karmazin said a succession plan wasn't even on the Viacom board's radar until he told board members on May 19 that he planned to resign. Besides, Karmazin reasons, with 71 percent of Viacom's voting stock, Redstone would never completely abdicate control. "When you have a controlling shareholder, there is never a succession issue," Karmazin told The Washington Post. "Let's say he gave me the tile of CEO. Three years from now he would still be there. He would still be in control."
Quoting unnamed inside sources, several other reports say it became clear to Karmazin over the past month that his name was not in Redstone's succession plan. Once Mel realized he wasn't getting the CEO title, he tendered his resignation, rather than wait until the board formalized a succession plan. The decision not to name him as Redstone's successor triggered a clause in Karmazin's contract allowing him to resign with full compensation (a total package valued between $25 and $30 million) and to pursue a position at a competing company.