Viacom boosts dividend more than 20 percent to 40 cents

By Sai Sachin R

(Reuters) - Media company Viacom Inc, still struggling to turn around advertising declines in the United States, raised its quarterly cash dividend more than 20 percent on Wednesday.

The company said the increased dividend, up 7 cents to 40 cents, will be payable on July 1.

Viacom, which owns MTV, Comedy Central and Nickelodeon, has for the past several quarters been hit by declining ratings and changing TV viewing habits, including the dumping of pricey cable subscriptions.

"They (Viacom) are focused on capital return ... they have suspended their buy back. So to some extent, this compensates for that," Wedbush Securities analyst James Dix said.

The company in April halted its $20 billion share buyback program in connection with a restructuring and anticipated spending on acquisitions in the current fiscal year.

The restructuring, aimed at driving growth, involved job cuts, abandoning some titles and reorganizing three of its domestic network groups into two new organizations.

The company raised its dividend by 3 cents to 33 cents per share in May last year.

Viacom has also faced criticism from proxy advisor Institutional Shareholder Services Inc (ISS) over executive pay.

Chief Executive Philippe Dauman's pay rose 19 percent to $44.3 million for the year ended Sept. 30, despite an 8 percent drop in Viacom's shares that year.

Such increases at a time when net earnings and revenue were little changed was one reason ISS recommended that investors withhold support on compensation at Viacom's annual meeting in March.

Viacom has also been facing questions about who would succeed 91-year old Chairman Sumner Redstone, who controls about 80 percent of the voting shares in the company.

Viacom's shares closed up 0.5 percent at $65.92 on the Nasdaq on Wednesday. Up to Tuesday's close, they had fallen nearly 13 percent this year.

(Reporting by Sai Sachin R in Bengaluru. Editing by Sayantani Ghosh, Don Sebastian and Andre Grenon)