Common Music Group may change into the newest firm to face an embarrassing shareholder revolt this AGM season, after an influential advisory agency urged traders to reject an “extreme” €139m (£119m) payout for its chief govt, Lucian Grainge.
Glass Lewis mentioned it had “extreme reservations” about supporting the Dutch-American music firm’s pay selections, which included a €92m share-based bonus for its British-born CEO that simply made up for a 51% minimize in his wage, to €7.5m.
Common – the world’s largest music firm, whose catalogue contains songs by stars together with Taylor Swift, Harry Kinds and Coldplay – mentioned the bonus pot of shares can be paid out over 5 years, primarily based on earnings and share value efficiency. It’s meant to make up for a drop within the worth of the previous dad or mum firm Vivendi’s shares after the spin-off of Common Music Group (UMG) in 2021.
However Glass Lewis, which advises main traders on the best way to vote at firm AGMs, mentioned bonuses of that sort “undermine the integrity of an organization’s incentive system and name into query whether or not the board is actually dedicated to creating a decent hyperlink between pay and efficiency”.
It additionally criticised UMG for charging forward with a significant payout regardless of shareholders having “persistently expressed dissent on this regard”. Final yr, 40% of voting traders rejected the remuneration report and the extra one-time payout eventually yr’s AGM. Any decision rejected by greater than 20% of voting traders is often taken as an indication of shareholder discontent.
Glass Lewis is now urging traders to reject UMG’s pay report, placing the corporate on monitor for one more showdown with shareholders on the annual assembly in Amsterdam on 16 Could.
There was a recent wave of shareholder dissent over massive payouts for firm bosses. Final week, almost half of voting traders rejected Smith & Nephew’s plans to boost its chief govt Deepak Nath’s pay packet by round a 3rd to $11.8m (£9.5m). That was regardless of arguments from bosses that it was essential to compete with pay provided by US friends, given the corporate makes most of its revenues abroad.
April noticed a shareholder rebel at AstraZeneca’s annual assembly, the place 35.5% rejected the corporate’s remuneration coverage, which included a most £18.7m pay packet for the chief govt, Pascal Soriot.
The French carmaker Renault can also be steeling itself for a possible backlash at its annual assembly on 16 Could in Paris, over the remuneration coverage for its chief govt, Luca de Meo.
De Meo, who was paid a complete of €5.3m (£4.5m) in 2023, may see his most payout hit £9.9m underneath the brand new coverage, which incorporates elevating his annual wage by a 3rd and growing his potential bonus to 225% of his new base pay. That’s on high of a long-term bonus plan that Glass Lewis warned may end in a €4.4m payout primarily based “purely on non-financial and qualitative standards”.
after publication promotion
“Glass Lewis doesn’t consider that the corporate’s remuneration technique, as at the moment constituted, is sufficiently aligned with shareholder’s greatest pursuits,” the adviser’s report mentioned. “As such, we don’t consider that this proposal deserves shareholder assist. We suggest that shareholders vote in opposition to this proposal.”
UMG declined to remark. Renault was contacted for remark.
Supply hyperlink
