Shareholders to weigh 'golden parachute' payments, too
The proposed sale of Warner Music Group to Russia-born billionaire Len Blavatnik’s Access Industries will be put to a vote at a special shareholders meeting in New York on July 6, the company said Monday.Also on the agenda for the meeting is a nonbinding advisory vote on multimillion-dollar golden parachute payments to some senior or former WMG executive officers, including chairman-CEO Edgar Bronfman, Jr. Resistance to the $3.3 million purchase of WMG could surface at the meeting, since a class-action suit opposing the sale has been filed by dissident shareholders (Variety, May 25). The action noted that Bronfman and Thomas H. Lee Partners and Bain Capital, which bought WMG from Time Warner in 2004, currently control 56% of the firm’s stock. Minority stockholder opposition is likely a moot point: A proxy statement filed with the SEC on Monday said those majority shareholders entered into an agreement with Access to vote in favor of the purchase May 6, the day the sale was announced. A good deal of money is at stake if the sale goes unconsummated. According to the proxy statement, WMG must pay Access a $56 million termination fee if the purchase goes belly-up on Warner’s end, while reverse termination fees of $60 million or $140 million would be due WMG for certain breaches on Access’ part. The WMG board has already recommended that shareholders approve the sale of the music firm to Access at a per-share price of $8.25 and the executive payouts. According to the proxy statement, Bronfman stands to make $16.8 million with the consummation of the merger or termination of employment. North American chairman/CEO of recorded music Lyor Cohen’s parachute totals $10 million. Former chief financial officer Michael Fleisher, who resigned May 31, is due $6 million.