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Dow Jones Newswires: Universal Music Group extends CEO’s contract, slashes salary after 2022 profit drop

Universal Music Group NV said it will extend Lucian Grainge’s contract as chief executive for five years and amend it after profit dropped in 2022.

The Netherlands-based music industry giant UMG, -0.28% said late Thursday that Mr. Grainge will stay on until May 1, 2028 at an annual salary of $5 million, which the company said has been cut by two-thirds. However, he will be eligible for an annual bonus of an estimated $10 million.

Mr. Grainge will go from a cash payment to a combination of equity and cash, which will depend partly on meeting performance-based objectives, UMG said. The majority of the CEO’s salary will come from equity and stock options to align his compensation with shareholder interests, the company said.

“This agreement is designed to drive both the sustainable success of UMG and long-term shareholder value,” said Sherry Lansing, UMG’s board chair.

The proposal is subject to shareholder approval at the company’s annual meeting.

UMG posted a net profit of 782 million euros ($852.7 million) in 2022, down 12% from 2021, the company said earlier this month.

In addition to Mr. Grainge’s reappointment as executive director, UMG also proposed the appointment of Haim Saban as independent nonexecutive director for a two-year term as well as the reappointments of Ms. Lansing, Anna Jones and Luc van Os as nonexecutive directors for a two-year term.

Write to David Sachs at david.sachs@wsj.com

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