Universal Music shareholders have approved Lucian Grainge’s compensation donation of more than $150 million, despite a recommendation that shareholders vote against UMG’s compensation policy.
After reports emerged that Universal Music Group shareholders had objected to CEO Lucian Grainge’s $100 million “transitional” compensation package, the company and its shareholders have reacted approved the $50 million compensation packages for Grainge and his deputy Vincent Vallejo in 2022; and a $100 million stock option — more than $150 million in total.
This does not include other compensation benefits, including a relatively modest base salary of $5 million for 2023. If all goes well, there are serious bonus rewards too.
The company did not immediately disclose the percentage of votes cast for the pay packages and the meeting was livestreamed to registered shareholders only.
Since the global financial crisis, annual meetings have sometimes devolved into shareholder-led protests against policy or performance. But the vote in favor of some over-the-top compensation practices at UMG came despite criticism from shareholder advisory groups who had advised investors to reject Grainge’s compensation packages.
In April, ISS recommended that shareholders vote against UMG’s 2022 compensation policy, arguing that the pay packages were “not in line” with industry standards, in part due to “inflated base salaries.” ISS was particularly concerned that Grainge’s total wage was 12.4 times that of his average peer.
Still, shareholders approved Grainge’s 2022 salary bonanza, which totaled more than $50 million, while also re-appointing him as chief executive. The $100 million stock option package also received the green light. The board explained that Grainge was a “unique” leader and that certain incentive payments resulted from old agreements made before the company went public.
In a proposed future salary agreement, part of a contract extension from Grainge to May 2028, the board removed the incentive that paid Grainge 1% of UMG’s consolidated EBITA. In addition, the new agreement provides for Grainge to transition from an all-cash package to a combination cash and stock package with a “broad set of performance-based targets.”