UMG’s Lucian Grainge Earned $300M Last Year, Thanks to Public Listing Bonus
The CEO and chairman received bonuses paid by the company's previous owner, Vivendi, for taking UMG public and securing strategic investors.
Universal Music Group’s 2021 annual report, released Thursday, shows chairman and CEO Lucian Grainge earned total compensation of 274.3 million euros ($303.6 million at the current exchange rate) in 2021, buoyed by three one-time bonuses paid by UMG’s previous owner, Vivendi.
UMG’s direct listing on the Euronext Amsterdam exchange on Sept. 21, 2021 — a spin-off by Vivendi — earned Grainge a one-time bonus of 195 million euros ($215.9 million), or 71% of his total compensation. Grainge was entitled to receive $150 million plus a 1% share of “the implied value of 100% of the equity of UMG in excess of $30 billion” multiplied by the percentage of UMG shares distributed to Vivendi shareholders prior to the admission [60%], according to the company’s 2021 prospectus.
In addition, Grainge, who topped Billboard’s 2022 Power Players list, earned a 17.5 million-euros ($19.4 million) bonus from a Tencent-led consortium’s purchase of a 10% stake in UMG, and a 20.9 million-euro ($20.3 million) bonus for Pershing Square’s purchase of a 10% stake in UMG ahead of its Sept. 2021 listing. Grainge also earned 24.7 million euros ($27.3 million) in bonuses for meeting certain financial and non-financial targets, and 3 million euros ($3.3 million) in other compensation on top of a base salary of 13.2 million euros ($14.6 million).
Trending on Billboard
Vivendi did not give Grainge stock awards, commonly used as performance incentives by publicly traded companies, since he became CEO in 2011. Rather, Vivendi gave Grainge a one-time bonus when UMG went public — a back-end payment not unlike the reward a startup founder might receive for scaling the company, building its valuation and guiding it to an initial public offering. UMG’s value has certainly appreciated greatly during Grainge’s tenure as CEO. He led UMG’s acquisition of EMI Music’s recorded music division in 2012 for 1.2 billion British pounds ($1.9 billion). In 2013, Vivendi rejected SoftBank’s takeover offer for UMG of $8.5 billion. Four years later, Goldman Sachs valued UMG at 19.5 billion euros ($23.5 billion) at the time. The Tencent-led consortium invested in UMG at a 30 billion euros ($33 billion) valuation. By the time of UMG’s public listing in September, its market value was roughly 33.5 billion euros ($39.5 billion) and finished the first day of trading at 45.5 billion euros ($53.4 billion).
After Pershing Square’s purchase into UMG, famed hedge fund CEO Bill Ackman applauded Grainge’s leadership as his reason for buying into the company. “Universal Music Group is one of the greatest businesses in the world,” he said. “Led by Sir Lucian Grainge, it has one of the most outstanding management teams that I have ever encountered.”
UMG’s biggest acts include Drake, The Weeknd, Taylor Swift, Olivia Rodrigo, Billie Eilish, Morgan Wallen, Ariana Grande and Justin Bieber. Last year, the company earned over $10 billion — up 14.4% from 2021, or a 17% increase year-over-year in constant currency.
While Grainge’s public offering bonus is certainly remarkable, it’s not altogether uncommon among his music industry peers. Other top-level executives make similar-sized salaries and bonuses, and routinely receive stock awards. Warner Music Group CEO Stephen Cooper earned $16.0 million and $10.7 million in fiscal 2020 and 2021, respectively, according to WMG’s 2022 proxy statement. Much of Cooper’s compensation is tied to WMG’s stock accumulated since becoming CEO in 2011 when Access Industries acquired WMG for $3.3 billion. WMG’s current market value is roughly $24 billion and Cooper’s 11.85 million WMG shares (held as of Jan. 6) are worth about $440 million. Michael Rapino, Live Nation’s CEO, had compensation of $14.6 million and $4.8 million in 2019 and 2020, respectively, according to the company’s 2021 proxy statement. As of April 14, 2021’s proxy statement, Rapino, named Live Nation’s CEO four months before it was spun off from Clear Channel Communications in 2005, owned 896,000 common shares (currently worth $104 million), 5.18 million exercisable options and 1.7 million units of unvested restricted stock (for a total of 3.5% of the company’s outstanding common stock).
More comparable to Grainge is Ari Emanuel, CEO of Endeavor, whose 2021 compensation package, valued at $308 million, was called “Hollywood’s biggest payday” by The Wall Street Journal — only $14 million was cash and the remainder was mostly unvested stock awards related to Endeavor’s 2021 IPO. Discovery Inc. Similarly, CEO David Zaslav’s 2021 compensation package rose to $246 million, compared with $37.7 million in 2020 and $45.8 million in 2019, based on a new contract and the pending acquisition of AT&T’s WarnerMedia.