The average Spotify employee makes $168,747 a year. What do their bosses make?
Last week, Spotify financial filings for 2015 revealed that the average employee is earning $168,747, with a worldwide headcount of 1,610. That raised the question of what the top executives and board members at Spotify are making, so we started investigating further.
Here’s what we found: according to further filings and executive information now discovered, 14 top executives, key advisors, and board members at Spotify earned a hefty €16,925,000 during 2015. That translates to $18,812,984 based on current exchange rates, and amounts to a per-executive payout of $1,343,784, or roughly $1.34 million in US dollars.
According to the Luxembourg filings, mandated by European Union regulations, that compensation includes three components: (1) ‘short-term employee benefits,’ i.e., cash salary, (2) ‘share-based payments,’ i.e., shares in the company; and a smaller category, (3) ‘post-employment benefits’. Astoundingly, those collective compensation amounts nearly quintupled from 2014, when the total compensation amount was ‘just’ €3,741,000 ($4,158,309). Some of that increase can be attributed to new board members and key executives, though the increase certainly isn’t fivefold.
Also keep in mind that these are averages, and we have no idea what specific officers and board members are making (yet). Here’s the pertinent excerpt from the filing that offers the top-level figure:
But how many members make up the ‘executive committee’ and ‘board of directors’?
That information was tricky to find, but according to a separate submission, the executive committee consists of 7 key members: Martin Lorenzton (pictured above), Klaus Hommels, Rene Richard Obermann, Sean Parker, Christopher Marshall, Daniel Ek (CEO), and Pär-Jörgen Pärsson.
Cobbling through data compiled and reported by Crunchbase, Bloomberg, Re/Code, and PrivCo, we were able to identify an additional 7 pertinent members. Some of those members, like Martin Lorentzon, carry dual executive and board roles (actually, he’s Chairman of the Board). Of course, they are not counted twice.
In total, that places the number of executive committee and board members at 14. That’s a small group to divide the $18.8 million pot.
In terms of evaluating these compensation levels, it’s also important to consider that ‘share-based payments’ are priced at ‘fair value’. That is likely a small percentage of the eventual, post-IPO valuation. Once Spotify hits Wall Street, those $8.8 million in shares will multiply enormously (and maybe create some billionaires).
In terms of how this skews the average of the rank-and-file, it’s tough to say. The critical question is whether these 9 top executives are counted in the total headcount of 1,610. If it is, then the average non-executive employee at Spotify makes €135,000, or $150,687 a year.
Here’s the full financial filing from the Luxembourg-based Registre de Commerce et des Sociétés if you’d like to review it.
And your point is?
Is this on par with other similar companies?
The point is that they cry poor whenever asked why they pay out so little per stream
So what if it is on par with similar companies. If that is your only argument then all I can say in reply is that the rest of the “on par” companies are also ripping off small independents through the process of devaluing the very music they are making money from.
You raise a valid point… by itself, the CEO’s salary tells us very little. I think the only reason it’s received a lot of attention is that it symbolizes the potential siphoning of revenue from the traditional music/recording industry to technology-focused intermediaries.
Other details within the financial report also speak to this. My personal favorite is than in one section Spotify celebrates becoming one of the largest sources of revenue in the music/recording industry as a major accomplishment in 2015… and then later they explain that they can only be profitable by substantially increasing their scale.
The potential for overly generous compensation packages also carries some special relevance within the context of the substantial debt Spotify has recently undertaken. It could represent an effort by some employees to hedge against a poor/failed IPO. It could also make reaching profitability even more difficult if Spotify is paying too high of a premium to attract the talent needed ton expand the business.
But that’s still a lot of conjecture!
Perhaps they should take a note from the Book of (Steve) Jobs, wherein he only took a token $1 salary when returning to the troubled Apple, unit the business model is actually fair and viable.
But pirates don’t share their treasure! At least not voluntarily.
😉
I believe Lorentzon was from U-Torrent along with Ek before starting Spotify. What a freak show of betrayal.
Just 1.3 million a year? That’s way less than a top 10 Spotify artist makes.
What’s the point of this article? Streaming is glorified radio ,look at some of the start-ups and what people make. I like to see some articles that address positive movements towards selling music and get some money back to artist and then labels.
Why is Digital Music always for the most part on the negative lets move forward and solve some of these problems.It’s obvious the old models out and there needs to be some serious changes.
+1,000
Let’s start by sending a message to the public that music has value and needs to be protected. Let’s put an end to safe harbor protection for infringing websites.
Have you signed zog? http://www.takedownstaydown.org
+ 1,001
🙂
sopa 2
Hardly. This is restoring control to the creator. Get some new material.
so you can just shut down anything you feel like with no due process at all.
just admit you hate the internet already.
please the industry will be the last thing that will change. they are more content with lawsuits and changing laws at everyone else’s expense.
This isn’t changing a law, it is fixing a law.
so you want to fix a law YOU made because the courts did not interpret it the way you liked. thanks for lying fare.
This is a terrible article that takes focus off real issues. Who cares what they get paid? Do you grip about an increase in the price of shampoo when the annual report from J&J gets published?
How does this compare to:
Executive salaries at the Major Labels?
Executive salaries at the RIAA, ASCAP, BMI etc.?
Does it matter?
it matters because SPOTIFY IS EVIL AND A TOOL OF GOOGLE!! DOOOOM DOOOOM!
At least you can comment with a clear head and don’t have a bias.
I don’t use Spotify. I disagree with everything they represent, regardless of how many mansion they own.