Next Big Sound (a/o May 16th):
That's according to estimates shared by a pair of sources, both of whom agreed to disclose top-level compensation details with Digital Music News. Astonishingly, the number of Universal Music Group executives making annual salaries in excess of $1 million used to be well over 30, but that heady-headcount is decreasing as financial pressures increase.
Accordingly, both sources cautioned that the days of executive excess are quickly winding down. And that means overpaid Americans in particular are prime targets. "If you don't have a British accent and live in Santa Monica [California headquarters], then you need to be very concerned about your future position," one source flatly stated (in an American accent).
The brief history under chairman Lucian Grainge validates the claim. This is a Brit with a strengthening mandate to clean house in North America, thanks partly to new developments at French parent Vivendi and upcoming financial pressures related to the acquisition of EMI Music. Which could go a long way towards explaining the recent chops of top Universal Music Group attorney Harvey Geller, a 'neutered' Zach Horowitz, and the recent chop of longtime CFO (and well-paid number-cruncher) Chuck Ciongoli. Others cited in the million-dollar-boys-club included David Ring.
The shifts around Geller and Horowitz raise some interesting questions about UMG's ultra-aggressive legal strategies. Geller's name was most tightly-tied to a 'legal jihad' against Grooveshark, one that now features a pair of lawsuits and involvement from every other major label group. Now, the question is whether Geller remains involved in this litigation Normany, or if he now makes a clean break from the effort entirely. "Harvey's been the big-time, big-shot litigator at Universal, and universally despised on the other side of the table," one barrister shared.
Geller's exit was first tipped to us by a knowledgeable attorney, confirmed by a UMG assistant, and later put in print by the Wall Street Journal. "I can't believe he was cheap," one source observed. Universal Music Group has not responded to inquiries from Digital Music News on the matter.
We're not clear how involved Zach Horowitz has been in the Grooveshark jihad specifically, though Horowitz does have a reputation for being a rabid Doberman on copyright litigation and protection. But Horowitz is also one of the most expensive canines on the payroll - one estimate pegged his take-home in the multi-millions per annum, with another drifting as high at $10 million for one or more years. "So he's basically like a star pitcher for the [Anaheim] Angels," one source joked.
Sounds outlandish if true, though Horowitz is no longer in the starting rotation. Grainge unceremoniously shuttled Horowitz from President and COO of the label group to Chairman of Universal Music Publishing Group (UMPG), a demotion to most watching in the stands. UMPG is a unit Horowtiz once oversaw, and a seat at the kid's table - at least in the language of UMG corporate power. "He's in the publishing ghetto now," another source noted.
previously on Digital Music News: "Universal Music Publishing Chief David Renzer Is Out..."
But Horowitz has many well-paid friends, including Bruce Resnikoff. According to sources, the President of catalog and ancillary-focused Universal Music Enterprises is fetching 'upwards of $2 million,' and his close ties to Horowitz make him a target. That figure sounds plausible with bonuses, and here's where this all gets interesting: Resnikoff is widely regarded as a 'solid earner' and worth the money he generates. Beyond smart cataloging, Resnikoff also has a stamp on the long-running 'NOW' compilation series, a repacking money-machine with a 'just add water' requirement.
The math is similar on Harvey Geller, whose settlements seem to have handsomely covered any compensation costs. But maybe that just doesn't cut it anymore, especially for a panicking brass back in France. And to understand that picture, you have to look at this picture:
That's the stock performance for UMG owner Vivendi, courtesy of Bloomberg. Vivendi has always been the sugar-daddy here, but even bankrollers can slow their roll. Back in France, the fromage is starting to stink, and that means downsizing pressure in Los Angeles. "The stock is tailspinning and you have all these overpaid executives," another source shared with Digital Music News. "You are borrowing commercial paper against the value of your company on a daily basis, that's no good..."
More as it develops...
Former American UMG VP Sunday, May 20, 2012
paul Sunday, May 20, 2012
yes?
/paul
@thewetzler Sunday, May 20, 2012
" At Universal Music Group, There Are Roughly 25 Executives Making a Million Dollars or More..."
... or more who are about to be fired.
Anonymous Sunday, May 20, 2012
Sad really. Entry level UMG employee salary can be as low as $28k a year. Then you have these "veteran" execs that have failed to adapt to the new industry models and are killing the industry yet still pull 7 figures a year.
I have a feeling Grainge is a digital guy and gets it more so than Doug Morris. Afterall, look at the mistakes Morris made with Steve Jobs. Hopefully Grainge will help restructure upper management to make for a more sustainable business model.
Visitor Sunday, May 20, 2012
they didn't fail to adapt, they failed on the hill and they had 13 years to do it...the new guys will probably be hungerier and have less time to waster in making signifcant changes for the better for music landscape in DC...
lifer Monday, May 21, 2012
@visitor. Are you saying major label failure to meet the challenges of this digital future are primarily because their D.C. lobbying efforts were inadequate? Please clarify.
I'd love to know what % of each major label sale (digital or otherwise) goes toward their D.C. lobbying efforts via RIAA or elsewhere.
@thufirhawat Monday, May 21, 2012
ah, big media!
@lassial Monday, May 21, 2012
Reluctance to change pays off at Universal Music.
@nunya Monday, May 21, 2012
my life as I know it
#disgusting
@jazzrockman Monday, May 21, 2012
solo allí
@byronward Monday, May 21, 2012
Shocker!
Ritch Esra Tuesday, May 22, 2012
What's not said here, but is a very important component in this discussion is that Lucien was given a mandate from Vivendi over a year ago to reduce personnel costs of Universal Music Group by $138,000,000.00 This reduction in very highly paid executives has been happening for over a year both here in the US and Internationally. So Geller & Ciongoli's departure are just the latest in a very long line of executives that have been let go over the last year or so.
It should also be noted that not only are they eliminating these very highly paid executives positions but they are not replacing them in the process even with less expensive ones
kenz Friday, May 25, 2012
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