By Ross Kerber
BOSTON (Reuters) - An official for the second-largest U.S. public pension system on Thursday called on Viacom Inc to do away with its dual-class share structure, the latest call from an investor for change at the media empire controlled by the aging mogul Sumner Redstone as doubts grow over his ability to lead.
Redstone, 92 years old, controls about 80 percent of the voting rights at Viacom, and the company has a second class of shares with no voting rights. The California State Teachers' Retirement System has 1.1 million non-voting shares.
"Ideally we think there should be a one-share, one-vote capital structure," said Aeisha Mastagni, an investment officer for the $184 billion system known as CalSTRS, in an interview on Thursday.
CalSTRS is a influential activist shareholder and has supported calls for the end of dual-class structures at other companies, but it has not previously focused on Viacom.
Mike McCauley, senior officer at the Florida State Board of Administration, which oversees pension assets, said he also supports the idea that Viacom should move to a one-share, one-vote capital structure.
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A Viacom spokesman did not immediately comment. The company has denied any issues with Redstone's mental capability.
However, questions of his health have been growing for months, raising concerns about management's ability to focus on recovering from a drop in TV ratings. Investors are becoming more vocal in their requests for information and control as Redstone's own influence wanes.
Mastagni's remarks come after Manuela Herzer, a former girlfriend of Redstone, said in a lawsuit he was no longer mentally competent, leading two major investors in Viacom on Wednesday to question whether Redstone should step down as executive chairman.
Mastagni said she would have the concerns about the share structure whatever Redstone's health might be, though she did say the situation is "like a soap opera."
The lack of voting rights for many investors means Viacom's board is insulated from investor pressure, she said.
The company has faced criticism from corporate governance advisers over its high pay for executives, but Mastagni said there is little investors can do.
"This is an example, putting Mr. Redstone aside, where the minority shareholders have no way to hold the board accountable," she said. "Our view is that if you're tapping into the public markets, you should have a one-share, one-vote capital structure."
As a large investor CalSTRS has come to play an influential role on U.S. corporate governance matters. In addition to its stake in Viacom, it owns 1.9 million non-voting shares of CBS Corp , the other big media company controlled by Redstone.
Calls to expand voting rights or to eliminate dual-share class structures have been a common theme for pension funds in recent years, especially as technology firms have embraced multiple share classes.
While Viacom has not faced any such proposal from shareholders in recent years, according to FactSet data, Mastagni said CalSTRS supported proposals to eliminate dual-share classes at social media company Facebook Inc and at cable television firm Comcast Corp . Both proposals failed to get a majority of votes.
(Reporting by Ross Kerber; editing by Peter Henderson and Bill Rigby)