Universal Music shareholders have approved Lucian Grainge’s $150 million+ compensation blowout despite recommendations that shareholders vote against UMG’s remuneration policy.
After reports surfaced that Universal Music Group shareholders pushed back against CEO Lucian Grainge’s $100+ million “transition” compensation package, the company and its shareholders have approved the 2022 $50 million compensation packages for Grainge and his deputy Vincent Vallejo, plus a $100 million stock option — totaling more than $150 million.
That doesn’t include other compensation perks, including a relatively modest year-2023 base salary of $5 million. That comes with serious bonus add-ons if things go well.
The company did not immediately disclose the percentage of votes cast supporting the pay packages, and the meeting was live-streamed only to registered shareholders.
Since the global financial crisis, annual meetings have sometimes devolved into shareholder-led protests over policies or performance. But the vote in support of some high-flying pay practices at UMG comes despite criticism raised by shareholder advisory groups who had advised investors to reject Grainge’s pay packages.
In April, ISS recommended shareholders vote against UMG’s 2022 remuneration policy, citing the pay packages being “out of step” with industry standards in part due to “excessive base salaries.” ISS was concerned, in particular, that Grainge’s total pay was 12.4 times higher than his average peer.
Nonetheless, shareholders approved Grainge’s 2022 pay bonanza, which totaled more than $50 million, while reappointing him as executive director. The $100 million stock options package was also given the green light. The board explained that Grainge is a “one-of-a-kind” executive and that certain incentive payments resulted from legacy arrangements made before the company went public.
In a proposed future pay agreement that was part of an extension of Grainge’s contract through May 2028, the board eliminated the incentive that paid Grainge 1% of UMG’s consolidated EBITA. Additionally, the new agreement transitions Grainge from an all-cash compensation package to a combination of cash and equity package with a “broad set of performance-based objectives.”