The CEO of Universal Music Group, Lucian Grainge, received a total remuneration of 274.3 million euros last year. He owed this mainly to the IPO of the global music group in Amsterdam last September, for which the record boss received a bonus of 195 million euros. The remuneration of more than a quarter of a billion euros is the highest ever for a chairman of a Dutch-based listed company.
This is evident from the annual report of the Universal Music Group that has recently been published. UMG is the largest music group in the world, with many famous artists such as Billie Eilish, Rihanna and Lady Gaga. The head office is in Hilversum. In addition to the extra reward of 195 million euros for the successful IPO – UMG quoted 25 euros this week, well above the introduction price of 18.50 – the CEO received three additional bonuses related to the IPO, of 17.5 million and 20.9 respectively. million and 24.7 million euros. With the basic salary of 13.2 million euros and other income of 3 million euros – including a ‘housing allowance’ – the total remuneration comes to 274.3 million euros.
Public support
That is by far the highest remuneration for the boss of a Dutch listed company to date. Two years ago, Bob van Dijk received 38.6 million euros from tech investor Prosus, the highest amount to date. Director Rients Abma of Eumedion, the representative of institutional investors such as pension funds, calls the UMG remuneration ‘un-Dutch, disproportionate and vulgarly high’. He points out that the annual report lacks an explanation of what the social support is for this remuneration. Such an explanation can be found in the corporate governance code, the legally anchored code of conduct for good governance at listed companies.
A calculation of the ‘pay gap’ between what the chairman of the board earns compared to the average employee is not included in the annual report; without explanation why not, what is in the code. Including bonuses, Grainge earned 2,079 times more than the average Universal Music Group employee last year. UMG itself reports a total remuneration for the CEO of 40.9 million euros – the extra bonuses are stated in footnotes elsewhere in the annual report. With that 40.9 million, Sir Lucian earned 310 times more than the workplace average. The 62-year-old Briton, who was knighted in 2016 for his services to the music industry, has been at the helm of UMG since 2011.
In a response, UMG points out that background information is given about the pay gap and that the bonuses were paid out by parent company Vivendi, the French media company that brought the music group to the stock market last year and is still a major shareholder. According to the company, the extras rewarded the CEO for expanding the value of UMG from 6 billion dollars to 55 billion dollars (50.4 billion euros) at the IPO. The music group further says that although it is listed and headquartered in the Netherlands, it is a global entertainment company, with a CEO who lives in Los Angeles. According to the company, an explanation of public support is only mandatory when the remuneration policy is adopted next year, once the shareholders have expressed their views.
Shareholders’ meeting
This will take place at the shareholders’ meeting on 12 May, where no problems are expected despite the criticism of the remuneration package. Three major shareholders – including the Chinese Tencent in addition to Vivendi – already account for almost half of the votes. In addition, the opinion of the shareholders is only advisory. The Universal Music Group can ignore a possible rejection, as a result of which ‘Sir’ Lucian Grainge is already assured of the highest remuneration ever for a chairman of a company listed in the Netherlands.
With the cooperation of Vincent Heerink