Universal Music Group shareholders approved on Thursday (May 11) the 2022 compensation packages for CEO Lucian Grainge and his deputy, Vincent Vallejo, plus a special $100 million stock option awarded to Grainge to stay on the job for five more years.
The company did not immediately disclose the percentage of votes cast in support of the advisory vote on the pay packages or other voting items at its annual general meeting held in the Amsterdam, and the meeting was live-streamed only to registered shareholders.
Since the global financial crisis, these kinds of annual meetings become a stage for shareholders to express their gripes about a company’s policies or performance. The vote of support for the world’s largest music company’s pay practices comes despite criticism raised by influential shareholder advisory groups, Institutional Shareholder Services and Glass Lewis, who had advised investors to reject Grainge’s pay packages.
Shareholders approved Grainge’s 2022 pay, which totaled more than 47 million euros (roughly $50 million), and re-appointed him as executive director, along with Sherry Lansing and Luc van Os as non-executive directors. Entertainment mogul Haim Saban was also appointed as non-executive director.
Shareholders declined to reappoint Anna Jones as a non-executive director, and her current term will run until the company’s next annual meeting in 2024.
Shareholders also approved a final 2022 dividend payout of 0.27 euros per share, which investors will receive in June. The vote brings UMG’s full year 2022 dividend to 0.51 euros per share.
In an April report, ISS recommended shareholders vote against UMG’s 2022 remuneration policy, saying the pay packages were out of step with industry standards in part due to “excessive” base salaries. That Grainge’s total pay was 12.4 times higher than the median of peers “raises substantial concerns,” ISS wrote.
Grainge’s 2022 pay package included a base salary of about 15.4 million euros and short-term incentives totaling 28.77 million euros, including a portion equivalent to 1% of UMG’s consolidated earnings before interest, taxes and amortization (EBITA) that was part of an agreement reached prior to UMG going public.
In its annual report, the company says that full-time UMG employees receive an average of 142,039 euros annually, up from 131,961 euros in 2021.
The board explained its reasoning for the remuneration for its executive directors saying that Grainge was a one-of-a-kind executive, and that certain incentive payments were due to legacy arrangements agreed to before the company went public.
In the proposed future pay agreement, which was part of an extension of Grainge’s contract through May 2028, the board said it did away with the incentive that paid Grainge 1% of UMG’s consolidated EBITA. In addition, the new agreement transitions Grainge from an all-cash compensation package to a combination cash and equity package “with a broad set of performance-based objectives aligned with shareholders’ interest and corresponding to the company’s long-term growth strategy.”
UMG ended the European trading day up 0.43% at 18.79 euros ($20.52).
This story originally appeared on Billboard
