Universal Music Group investors urged to vote down €139m CEO pay
Universal Music Group could become the latest firm to face an embarrassing shareholder revolt this AGM season, after an influential advisory firm urged investors to reject an “excessive” €139m (£119m) payout for the chief executive, Sir Lucian Grainge.
Glass Lewis said it had “severe reservations” about supporting the pay decisions, which included a €92m share-based bonus for the CEO that made up for a 51% salary cut to €7.5m.
Universal, the world’s largest music company, whose catalogue includes songs by stars including Taylor Swift, Harry Styles, Coldplay and Bob Dylan, said the bonus pot of shares would be paid out over five years, based on earnings and share price performance. It is meant to make up for a drop in the value of parent company Vivendi’s shares following the spin-off of UMG in 2021.
But Glass Lewis, which advises big investors on how to vote at company AGMs, said bonuses of that kind “undermine the integrity of a company’s incentive system and call into question whether the board is truly committed to creating a tight link between pay and performance”.
It also criticised UMG for charging ahead with a large payout despite shareholders having “consistently expressed dissent in this regard”. Last year, 40% of voting investors rejected both the remuneration report and the additional one-time payout at last year’s AGM. Any resolution rejected by more than 20% of voting investors is usually taken as a sign of shareholder discontent.
Glass Lewis is urging investors to reject UMG’s pay report, putting the company on track for another showdown with shareholders at the annual meeting in Amsterdam on 16 May.
The recommendation comes amid a fresh wave of shareholder dissent over excessive payouts for bosses.
Last week, nearly half of voting investors rejected Smith & Nephew’s plans to raise the pay packet of its chief executive, Deepak Nath, by about a third to $11.8m (£9.5m). It followed AstraZeneca’s annual meeting in April, where 35.5% rejected the remuneration policy, which included a maximum £18.7m pay packet for the chief executive, Pascal Soriot.
The French carmaker Renault is also steeling itself for a backlash at its annual meeting on 16 May in Paris over the remuneration policy for its chief executive, Luca de Meo.
De Meo, who was paid €5.3m in 2023, could receive a maximum payout of £9.9m under the new policy, which includes raising his annual salary by a third and his potential bonus to 225% of his new base pay.
That is on top of a long-term bonus plan that could result in a bumper €4.4m payout. “Glass Lewis does not believe that the company’s remuneration strategy, as currently constituted, is sufficiently aligned with shareholders’ best interests,” the adviser’s report said.
UMG declined to comment. Renault was contacted for comment.