UMG CEO Lucian Grainge earned $59 million in 2020, and will likely earn a more than $150 million bonus after the company goes public
Universal Music Group CEO Lucian Grainge earned $59 million in 2020, and will likely earn a more than $150 million bonus after the company goes public.
Now Grainge’s hard work is really starting to pay off. His 2020 earnings included a 15.5 million euros ($18.2 million) bonus for helping shepherd a 3 billion euros ($3.5 billion) investment from a Tencent-led consortium for a 10% stake in UMG. Executive vp, CFO and president of operations
Boyd Muiralso got a bonus for his role in that deal worth 3.3 million euros ($3.9 million).In 2021, Grainge will earn a 17.5 million euros ($20.5 million) bonus from the Tencent consortium’s purchase of an additional 10% stake completed in January, as well as an unspecified amount for Pershing Square Holdings’ 10% stake purchased in August for 3.37 million euros ($3.95 million).
Grainge’s going-forward annual compensation amounts to around 36 million euros ($42.1 million), according to aBillboardcalculation based on information in the prospectus. Breaking that down, he receives a 12.7 million euros ($14.9 million) annual salary and an 8.6 million euros ($9.4 million) “contingent” cash bonus based on UMG meeting unspecified “financial and non-financial goals.” Grainge is also entitled to retirement benefits of 20% of his annual base salary, with a maximum of 262,000 euros ($307,000), as well as an annual 418,200 euros ($490,000) annual housing allowance. In addition, Grainge gets the use of a car with a driver “for business and reasonable private use,” and the use of a chartered or private aircraft for business purposes up to 410,000 euros ($481,000) per year, although he can exceed that amount with approval. The single largest component of Grainge’s compensation is 1% of UMG’s earnings before interest, taxes and amortization — that was equal to 13.3 million euros ($15.6 million) in 2020. headtopics.com
Grainge’s salary is substantial but not unusually so considering UMG’s size and success. Warner Music Group CEOStephen Cooper, who has led the company since 2011, earned an average of $13.7 million in 2017, 2019 and 2020. (He made $34.4 million in 2018, which is likely related to the $925-million dividend WMG paid to parent company Access Industries that year.) Cooper, whose base salary of $1 million is less than a 10th of a typical performance-related bonus, is paid
a comparable amountto Grainge when adjusting for the companies’ sizes. At a reasonable range, UMG’s market capitalization -- $45 billion to $52 billion -- is 2.2 to 2.5 times WMG’s current market capitalization of $20.8 billion, while Grainge’s salary is 3.1 times larger than Cooper's three-year average. If UMG’s value reaches analysts’ top estimates, around $60 billion, its market cap will be about 2.9 times that of WMG, putting Grainge and Cooper on nearly equal footing after adjusting for the sizes of the two companies.
UMG and concert promoter Live Nation also pay their CEOs roughly the same when the companies’ relative sizes are considered. Live Nation CEOMichael Rapinomade $11.6 million and $14.6 million in 2018 and 2019, respectively. (Because of COVID-19’s impact on Live Nation, Rapino’s 2020 compensation fell to $4.7 million.) Grainge’s 2020 compensation was 3.6 and 2.9 times larger than Rapino’s compensation in each year. Using the same range for UMG’s market capitalization, UMG is 2.4 to 2.7 times larger than Live Nation.
Grainge, Cooper and Rapino differ in their stock-related compensation, however. UMG does not yet have a long-term incentive program to incentivize its executives, although the new board may establish one, according to the prospectus. Instead, Grainge will receive a substantial bonus after UMG’s admission to the exchange. (The payment will equal 60% of the sum of $150 million and 1% of every dollar of UMG’s valuation once admission exceeds $30 billion. So, a $40 billion valuation would result in a $150 million bonus. A $50 billion valuation would give Grainge a $210 million bonus.) Cooper received roughly 190,000 restricted stock units in fiscal 2021 that vest over four years and are worth $7.8 million at the current $41 share price. Rapino realized $28.7 million from option awards and stock awards in 2020. headtopics.com
Universal Music Group Is Going Public, But Don’t Call It an IPOOnce UMG is a standalone company, its board of directors’ compensation committee will create salary and incentive plans based on a “peer group” of like publicly traded companies. That would likely include Warner Music and Live Nation, as well as possibly Spotify, Netflix and Endeavor, among others. Among those companies’ CEOs, Spotify’s
Daniel Ekdoes not take a salary or other annual compensation -- but he owns 16.8% of Spotify’s common shares, valuing his equity at $7.8 billion. Netflix CEOReed Hastingsmade $43.2 million in 2020, with $650,000 from a salary and over $42 million in stock option awards. (Netflix’s market capitalization is currently $258 billion.) And Endeavor’s
Ariel Emmanuelwas paid $14.4 million in 2020 for salary, bonus, equity award and other, according to the company’s 2020 prospectus before it went public on April 29. Grainge’s 2020 compensation was nearly three times greater than Emmanuel’s, while UMG’s estimated market capitalization is 7.6 times greater than Endeavor’s $4.4 billion.
As for UMG’s other leading executives, Muir earned 9.7 million euros ($11.4 million) in 2020 -- most of that from a bonus related to the Tencent consortium’s investment. For his annual compensation, Boyd receives a 1.7 million euros ($2 million) annual salary and is eligible for a bonus of up to 3.3 million euros ($3.8 million). Muir’s admission bonus -- to be paid in shares -- will equal 12.3 million euros ($14.4 million, vested over three years) with an additional 6.1 million euros ($7.2 million) if UMG’s valuation at admission is 30 billion euros ($35.2 billion) and another 1.5 million euros ($1.8 million) if the valuation reaches 40 billion euros ($46.9 billion). headtopics.com
UMG deputy CEOVincent Vallejo, who joined the company in April from Vivendi, where he has worked with UMG since 2008, has an annual salary of 960,000 euros ($1.1 million). He is eligible for a target bonus of 50% of annual base salary with a maximum payout of two times the target bonus amount, depending on unspecified performance metrics. Vallejo is entitled to receive retirement benefits of 20,000 euros ($23,500) annually. If he is still employed by the company on Feb. 1, 2023, Vallejo will receive a retention bonus of 800,000 euros ($938,000).
UMG will go public on Sept. 21 when it lists on the Euronext Amsterdam stock exchange. Parent company Vivendi will distribute 60% of UMG’s equity to its shareholders and retain 10% for itself. A Tencent-led consortium owns 20% of UMG’s outstanding shares and Pershing Square Holdings owns the remaining 10%.
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'Earned' Some of his 2021 bonus would be earned off Thecasinop 🎲 How do we buy the stocks 😂😂😂 Great Sir Lucian 🙏🏻 Dawg couldn't secure anything for 6ix9ine tho😂 wack had to do everything smh
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