Spotify CEO Daniel Ek sells millions in shares amid legal threat

The tool, called Spotify Unwrapped, was created to expose the stark contrast between Spotify’s payments to artists and the lavish compensation packages awarded to top executives. The calculator, which used data from Spotify Wrapped, allowed users to see the royalties earned by artists based on their total streams. However, as reported by Digital Music News, the calculator has now been removed. A message on the site reads:

“This site used to be a parody of Spotify Wrapped that called the company out for its predatory treatment of artists. It has been removed at the request of Spotify’s legal team. You can still join our fight for justice at Spotify at the United Musicians and Allied Workers (UMAW) website.”

Despite its shutdown, the website still provides the formula behind the calculator for curious users. The formula allowed artists to calculate their royalties by multiplying their Spotify Wrapped total streams by $0.003, the reported average per-stream rate Spotify pays artists. The message also notes that those with labels or bandmates would need to divide that total appropriately.

While artists continue to voice concerns about their low compensation, Spotify’s stock has been on a meteoric rise, reaching nearly $500 per share in 2024. According to U.S. Securities and Exchange Commission (SEC) filings, Daniel Ek took advantage of this surge and sold approximately $350 million in shares. This stock sell-off trend has been accelerating, with around 20 Spotify insiders offloading stock as the share price hit new highs in December.

These new stock price highs were largely driven by significant cost-cutting measures, including a 25% reduction in Spotify’s workforce in 2023. Additionally, the company increased its Spotify Premium subscription fees in several markets last year. The total amount of stock sold by Spotify insiders in 2024 has already reached a staggering $1.25 billion.

Spotify Insiders Who Sold Stock in 2024:

• Daniel Ek, CEO – $350 million
• Martin Lorentzon, Co-Founder – $550 million
• Gustav Söderström, Chief Product & Technology Officer – $106 million
• Katarina Berg, Chief Human Resources Officer – $38 million
• Alex Norström, Chief Business Officer – $63 million
• Dustee Jenkins, Head of Public Relations – $6 million

Spotify’s stock has nearly tripled in value in 2024, and the company is now approaching a market capitalisation of $100 billion. However, as executive stock sales reach record levels, many Spotify users and artists are expressing dissatisfaction, particularly with this year’s Spotify Wrapped, which many found disappointing. As Spotify’s financial fortunes grow, the divide between its leadership and the artists who provide the content remains a contentious issue.