On Wednesday, Live Nation was hit with a putative class action by an investor, Shiva Stein, in New York federal court. Now, that case has been abruptly withdrawn — with a foul odor left behind.
The investor initially claimed that the live concert giant falsely inflated its 2017 adjusted operating income to trigger $10.8 million in bonuses and stock awards to its top brass. Turns out those calculations were technically wrong — though maybe Stein was trying to make a point.
Ahead of the weekend, Live Nation stated, “We are pleased that the Plaintiff withdrew her frivolous lawsuit against Live Nation. The Plaintiff and her attorneys wrongfully accused Live Nation of not meeting performance targets tied to executive compensation when in point of face, Live Nation is fully transparent on our pay practices, and payment of executive bonuses was fully in line with those practices which are clearly laid out in our 10-K and Proxy.”
Stein originally claimed that Live Nation’s 2018 proxy statement reports a misleading adjusted operating income that is $5 million short of what is required to trigger millions of dollars’ worth of bonuses and incentives for five of the company’s executives. Live Nation’s 2017 Form-10 K notes that the company’s AOI was $625 million, which is less than 90 percent of the goal that the company needed to reach to trigger the bonuses.
The suit also named Independent Directors Robert Ted Enloe II and Mark S. Shapiro, both members of Live Nation’s Compensation Committee, as defendants.
“This is a frivolous lawsuit,” the company told Billboard. “We are fully transparent on our pay practices, and payment of the bonuses was fully in line with those practices which are clearly laid out in our 10-K and Proxy.”
Live Nation representatives stated that the suit neglected to factor in the how AOI is calculated for bonuses, and noted that page 34 of the company’s proxy statement explains that calculations for “AOI for bonus is on a pro forma, consistent-currency basis, adjusted for legal settlements.”
As of May 25th, Stein’s motion dismissed the case.