HILVERSUM, Netherlands (CelebrityAccess) — Universal Music Group Chairman and Chief Executive Officer Sir Lucian Grainge has extended his contract to remain at the helm of the label group through May 1st, 2028.
As part of his renewed deal, Grainge will transition from an all-cash compensation package to one that combines both cash and equity, including a performance-based equity compensation program. The program’s economic value will be paid in both UMG equity and UMG performance-based stock options, the company said.
Under the terms of the new agreement, Grainge’s annual salary will be reduced by more than 2/3rds from his current salary of $5 million but if he achieves his performance goals, he will be eligible for an annual bonus with a target of $10 million.
The equity element of the program includes annual grants of $20 million, comprised of as much as 50% Performance Share Units, with goals established by the label group’s board. The remainder is comprised of Restricted Share Units.
As part of a 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 1/3rd at €30.00 and 1/3rd at €38.00) within the term of the agreement ending May 1, 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,” said Sherry Lansing, UMG’s Chairman of the Board. “The UMG Board is resolutely committed to converting those opportunities and maximizing shareholder value for the long term. Only the right kind of chief executive can help achieve that goal and Lucian 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.”