UMG CEO Lucian Grainge’s Nearly $150 Million Pay Package Sharply Criticized Ahead of Investor Meeting

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Ahead of a key Universal Music Group (UMG) investor meeting, the massive pay package of CEO Lucian Grainge is facing sharp criticism.

Outlets including Proactive Investors just recently shed light on the disapproval and the possible investor revolt, which follow the considerable pushback that the exec’s astonishingly large compensation received last year.

Prior to UMG’s 2023 annual meeting, shareholder advisory service Glass Lewis and others publicly urged a vote against the over $150 million package, established under a broader contractual framework with a smaller salary but bigger stock incentives.

Notwithstanding this well-documented opposition to Grainge’s multimillion-dollar payday – which would, of course, be in addition to the reported $200 million he took home in 2021 thanks mainly to one-time IPO bonuses – shareholders ultimately approved the proposal.

Now, less than two weeks before UMG’s 2024 annual meeting (and after the major label posted modest Q1 revenue growth), Glass Lewis has picked up where it left off, calling for votes against Grainge’s $149.14 million (£119 million) proposed windfall.

In keeping with the mentioned nature of Grainge’s contract, which runs through May of 2028, that gargantuan sum would specifically deliver a share-based bonus of $99.01 million (£79 million) to the overpaid CEO, per the report.

With UMG’s annual meeting scheduled to take place on May 16th, we’ll know sooner rather than later whether investors believe Grainge’s pay package is excessive – or, more precisely, whether they’re willing to vote accordingly. (Last year, Live Nation shareholders voted against, among other things, a $139 million compensation package for CEO Michael Rapino.)

As to the business’s market positioning at present, UMG’s current per-share price of $31.45 (€29.23) is only slightly beneath the 52-week high. Furthermore, the value marks a north of 52 percent spike from the same point in 2023, but a comparatively modest improvement from when UMG listed on the Euronext Amsterdam in 2021.

Also worth bearing in mind is that much of UMG shares’ valuation resurgence arrived after the company moved forward with a “strategic organizational redesign” that’s expected to trim the better part of $300 million in annual expenditures through job cuts. Predictably, the staff reductions have been accompanied by far-reaching personnel recalibrations, rooted in retooled leadership roles within Republic and Interscope Geffen.

Looking beyond this restructuring and UMG’s previously highlighted Q1 financials, 2024’s first four or so months have seen the Big Three label ink new agreements with Hybe (spanning a decade and covering several areas), China’s TF Entertainment, Spotify, and most recently TikTok. Noteworthy for multiple reasons, the Spotify pact extends to enhanced collaboration on “promotional and social features.”