Universal Music Extends Chairman-CEO Lucian Grainge’s Contract

0
30


Universal Music Group announced on Wednesday that its Board of Directors has extended the contract of Lucian Grainge, the company’s chairman and CEO, until May 1, 2028.

According to the announcement, the “extended and amended” agreement transitions Grainge from an all-cash compensation package to one that is a combination of equity and cash and includes an equity compensation program with “a broad set of performance-based objectives aligned with shareholders’ interest and corresponding to the company’s long-term growth strategy. To assure the compensation program is aligned with shareholders’ interest, the majority of the compensation package’s economic value will be paid in UMG equity and UMG performance-based stock options.”
 
Grainge’s annual salary under the new agreement will be reduced by more than two-thirds from his current salary, to $5 million, the announcement continues. Subject to the achievement of performance criteria, he will be eligible for an annual bonus with a target of $10 million. The EBITA bonus from his prior employment agreement has been eliminated and Grainge will only be entitled to the contingent bonus under his prior employment agreement on a pro rata basis until March 31, 2023. The equity components of the program include annual grants of $20 million, comprised of as much as 50% Performance Share Units (PSUs) — with annual PSU goals set by the Board of Directors — and the remainder comprised of Restricted Share Units (RSUs). 

As part of the Long-Term Incentive Plan, Grainge will receive a one-time transition equity award of $100 million, of which 50% will be in the form of RSUs and 50% in the form of Performance Stock Options (PSOs). The PSOs will only be paid out if the Company surpasses stock price hurdles (1/3rd at €26.50, another 1/3rd at €30.00 and 1/3rd at €38.00) within the term of the agreement ending May 1, 2028.

“UMG is the world’s most successful music company and there are incredible opportunities ahead for a company with the right leadership and vision,” said Sherry Lansing, UMG’s Chairman of the Board.  “The UMG Board is resolutely committed to converting those opportunities and maximizing shareholder value for the long term.  Only the right kind of chief executive can help achieve that goal and Lucian is just the one to do it.  Through his clear vision and strong execution in building UMG into the industry leader, Lucian has also essentially created a new category of music company.  This agreement is designed to drive both the sustainable success of UMG and long-term shareholder value.”

Originally a music publisher, the London-born Grainge joined Universal in 1986 and was named CEO in 2010 and promoted to chairman the following year. He presided over the company’s acquisition of EMI’s recorded-music division, which brought UMG the catalogs of the Beatles and many other acts, and made it the largest music company in the world, a position it has held ever since. Variety conducted a rare, career-spanning interview with Grainge late in 2019 upon his induction on the Hollywood Walk of Fame. He was bestowed with a knighthood in 2016 by Her Majesty Queen Elizabeth II for accomplishments and leadership in the music industry, and inducted into the Songwriters Hall of Fame in 2018.

The announcement adds that the size of the potential equity grant falls within the parameters for potential equity grants as previously disclosed and voted on by shareholders at UMG’s 2022 Annual General Meeting in the Company’s 2022 Global Equity Plan and UMG’s Executive Directors Remuneration Policy, the announcement details. 

To align Grainge’s term as executive director and Chairman and CEO of UMG with the term of the extended employment agreement — ending on May 1, 2028 — the Board will put to UMG’s General Meeting a proposal to reappoint Grainge as executive director for a term ending on May 1, 2028. For further information on this proposal see the Investor Relations section of the UMG website.

The Board will also seek approval at UMG’s 2023 Annual General Meeting for a supplement to UMG’s existing Executive Directors Remuneration Policy with respect to Grainge’s new remuneration.





Source : Variety