By David Sachs

 

Universal Music Group NV said it would extend Lucian Grainge's contract as chief executive for five years, cutting his base salary in favor of an agreement that combines equity and cash.

The Netherlands-based music industry giant said late Thursday that Mr. Grainge will stay on until May 1, 2028, at an annual salary of $5 million, which the company said has been cut by two-thirds. However, he will be eligible for an annual bonus of an estimated $10 million.

Mr. Grainge will go from a cash payment to a combination of cash and equity, which will depend partly on meeting performance-based objectives, UMG said. The majority of the CEO's salary will come from equity and stock options to align his compensation with shareholder interests, the company said.

"This agreement is designed to drive both the sustainable success of UMG and long-term shareholder value," said Sherry Lansing, UMG's board chair.

The proposal is subject to shareholder approval at the company's annual meeting.

UMG posted a net profit of 782 million euros ($852.7 million) in 2022, down 12% from 2021, the company said earlier this month. However, on an adjusted basis, net profit grew 14% year over year to EUR 1.45 billion when accounting for non-recurring items, including the drop in value of its Spotify shares, according to UMG's annual report.

In addition to Mr. Grainge's reappointment as executive director, UMG also proposed the appointment of Haim Saban as independent nonexecutive director for a two-year term as well as the reappointments of Ms. Lansing, Anna Jones and Luc van Os as nonexecutive directors for a two-year term.

 

Write to David Sachs at david.sachs@wsj.com

 

(END) Dow Jones Newswires

March 31, 2023 10:41 ET (14:41 GMT)

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