Viacom's Redstone pays the price

Sumner Redstone, the executive chairman of Viacom, is feeling generous lately. According to an announcement today, he is going to take a cut in pay.

Actually, his pay will fall by 50% to $4.5 million. Also, his compensation will be tied to the performance Viacom's stock. If the stock performs well compared to the S&P, then he will benefit.

This may be a smart move. At the start of the year, Viacom's stock price was in the low 40s. Now, the stock trades at $37.33.

Also, Viacom is revamping the rest of the pay structure for its senior officers -- so as to better incentivize them.

However, in the case of Redstone, it is really laughable. Will this pay package make any difference, given he already has $3 billion in holdings of Viacom stock?

The amazing thing is that he has the guts to actually take any compensation from Viacom. Why not do what other billionaire executives do -- like those at Google and Yahoo! -- and just take $1 for the year?

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.