Moonves succeeds Redstone as CBS chairman

Sumner Redstone has resigned as board chairman of CBS Corp. and has been replaced by CEO Leslie Moonves, the company announced Wednesday, providing clarity on the future leadership of CBS.

Redstone, 92, formally resigned Tuesday and was named chairman emeritus of CBS, the company said. Speculation about Redstone's health has intensified in recent months, triggering concern among investors of CBS and Viacom, another media company whose board Redstone chairs.

“The Viacom Board of Directors is scheduled to meet tomorrow,” the company said in a statement Wednesday. Viacom owns MTV, Nickelodeon, VH1, Comedy Channel, BET and Paramount Pictures. Viacom didn't elaborate, but investors and analysts expect the meeting is likely for a vote to elect a new chairman of the board.

Moonves, who will stay on as president and CEO of CBS, was nominated by Redstone's daughter and vice chair of CBS' board, Shari Redstone. CBS said Moonves' appointment was confirmed by a unanimous vote.

"I want to thank Sumner for his guidance and strong support over all these years. It has meant the world to me," Moonves said in a statement.

Shares of CBS rose 4.6% to $50.50 in after-hours trading.

Shares of Viacom were up 11.6% to $49.85.

"The elevation of Moonves is unsurprising considering his unique popularity within both the investment community and the industry," wrote Brian Wieser, an industry analyst at Pivotal Research Group, in a note to investors. "We don’t think this should be viewed as causing any change for the company...Moonves was viewed as running the company (well) with a relatively free hand."

CBS said its board offered the position of non-executive chair to Shari Redstone before electing Moonves. "She declined in light of her other professional and personal responsibilities, and in recognition of her confidence in Mr. Moonves," CBS said.

Shari Redstone runs a venture capital firm and is vice chair at Viacom, which was founded by her father. She's also president of National Amusements, the controlling shareholder of Viacom and CBS.

"As has been accurately reported, my father’s Trust states his intention that I succeed him as (non-executive) Chair at CBS and Viacom, and also names me as a Trustee after his death," Shari Redstone said in a statement. "However, it is my firm belief that whoever may succeed my father as Chair at each company should be someone who is not a Trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice."

Viacom and CBS have been under pressure from shareholders to be more transparent about the health status of Redstone.

In December, Mario Gabelli, chairman of of GAMCO Investors, the second-largest voting shareholder of Viacom, told Reuters that Viacom should disclose Redstone’s mental competence.

Manuela Herzer, Redstone’s former girlfriend, filed a lawsuit in Los Angeles Superior Court in November, claiming that Redstone’s mental capacity was deteriorating and that he should be examined and declared incompetent to run Viacom and CBS. A month later, a judge declined to grant Herzer’s motion.

In January, another shareholder filed a lawsuit against Viacom and CBS’ boards, alleging that the companies’ payments to Redstone as executive chairman were improper given that “he was physically and mentally incapacitated.”