The question — for investors, employees, and competitors — is whether Live Nation is getting looted before our very eyes. Which brings us to a very sizeable options handout to a small group of top Live Nation executives. This was first tipped to Digital Music News late last month; now we have the official documentation that confirms those reports.
According to the paperwork, a group of five top Live Nation executives have been awarded performance-based options valued at approximately $4.8 million, with president and CEO Michael Rapino and Ticketmaster president Nathan Hubbard grabbing the juiciest chunks.
All of these shares have a $0 strike price, which is impossible for any outside investor to obtain. The options start to vest next year, at which they can be exercised, or ‘purchased’ at the $0 price tag. So, it’s sort of like your grandfather handing you a bunch of free stock (for being such a great guy).
February 26th, 2013: “Somebody Please Save Live Nation Entertainment…“
In terms of the performance component, that also appeared in the paperwork, though sources were unsure of what the specific benchmarks would be. One guessed that the bar would be ‘laughably low,’ which translates into a free handout, though there is the possibility (however remote) that these are difficult performance goals designed to motivate a comeback at the troubled, debt-heavy company.
Rapino, who saddled nearly $12 million in compensation in 2011, is the biggest beneficiary with 150,000 options granted. That translates into an estimated value of $1.8 million (using an approximate share price of $12). Rapino scored nearly $16 million in compensation in 2010, despite extremely heavy losses in both years.
Hubbard, president of Ticketmaster, received nearly 126,000 options, according to the SEC paperwork. That translates to about $1.5 million, using the same formula. Hubbard received compensation of $4.1 million in 2011, and $5.6 million in 2010.
Live Nation has posted losses totaling roughly $775 million since 2008; its current debt level is approaching $1.8 billion. Live Nation has not responded to an inquiry related to executive compensation.