UMG extends Lucian Grange’s contract until 2028

“UMG is the world's most successful music company and there are incredible opportunities ahead for a company with the right leadership and vision,” UMG's chairman of the board, Sherry Lansing, said. “The UMG board is resolutely committed to converting those opportunities and maximising shareholder value for the long term. Only the right kind of chief executive can help achieve that goal and Lucian [Grainge] is just the one to do it. Through his clear vision and strong execution in building UMG into the industry leader, Lucian has also essentially created a new category of music company. This agreement is designed to drive both the sustainable success of UMG and long-term shareholder value."

The extended and amended agreement transitions Grainge from an all-cash compensation package to one that is a combination of equity and cash and includes an equity compensation programme with a broad set of performance-based objectives aligned with shareholders’ interest and corresponding to the Company’s long-term growth strategy. 

To assure the compensation programme is aligned with shareholders’ interests, the majority of the compensation package’s economic value will be paid in UMG equity and UMG performance-based stock options. 

Grainge's annual salary under the new agreement will be reduced by more than two-thirds from his current salary to $5 million. Subject to the achievement of performance criteria, he will be eligible for an annual bonus with a target of $10 million. The earnings before interest, taxes, and amortisation (EBITA) bonus from his prior employment agreement has been eliminated and Grainge will only be entitled to the contingent bonus under his prior employment agreement on a pro-rata basis until 31 March 2023. 

The equity components of the programme include annual grants of $20 million, comprising as much as 50% performance share units (PSUs) – with annual PSU goals set by the Board of Directors – and the remainder comprising restricted share units (RSUs). 

As part of the long-term incentive plan, Grainge will receive a one-time transition equity award of $100 million, of which 50% will be in the form of RSUs and 50% in the form of Performance Stock Options (PSOs).  The PSOs will only be paid out if the Company surpasses stock price hurdles (1/3rd at €26.50, another one-third at €30.00 and one-third at €38 within the term of the agreement ending 1 May 2028.

The size of the potential equity grant falls within the parameters for potential equity grants as previously disclosed and voted on by shareholders at UMG’s 2022 annual general meeting in the Company's 2022 global equity plan and UMG’s executive directors remuneration policy. 

To align Grainge's term as executive director and Chairman and CEO of UMG with the term of the extended employment agreement, the board will put to UMG’s general meeting a proposal to reappoint Grainge as executive director for a term ending on May 1, 2028.

The Board will also seek approval at UMG's 2023 Annual General Meeting for a supplement to UMG's existing Executive Directors Remuneration Policy with respect to Grainge's new remuneration.