Filed by the Registrant ☒
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Filed by a Party other than the Registrant ☐
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☐
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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☐
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Soliciting Material under Rule 14a-12
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Best,
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Stephen Cooper
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Chief Executive Officer
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Warner Music Group Corp.
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1.
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Proposal 1: Election of eleven directors for a one-year term ending at the 2022 Annual Meeting of Stockholders;
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2.
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Proposal 2: Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal year 2021;
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3.
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Proposal 3: Advisory vote to approve the compensation paid to the Company’s named executive officers;
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4.
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Proposal 4: Advisory vote on the frequency of future advisory votes to approve the compensation paid to the Company’s named executive officers; and
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5.
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Any such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
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Internet
Please log on to www.proxyvote.com and submit a proxy to vote your Shares by 11:59 p.m., Eastern Time, on March 1, 2021.
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Telephone
Please call the number on your proxy card until 11:59 p.m., Eastern Time, on March 1, 2021.
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Mail
If you received printed copies of the proxy materials, please complete, sign, date and return your proxy card by mail to Vote Processing c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717 so that it is received by the Company prior to the Annual Meeting.
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In Person
You may attend the virtual Annual Meeting and cast your vote.
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By Order of the Board of Directors,
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Paul Robinson
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Executive Vice President and
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General Counsel and Secretary
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•
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“Access” means Access Industries, LLC, a Delaware limited liability company, and its affiliates, certain of which are our controlling stockholders.
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•
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“Acquisition Corp.” means WMG Acquisition Corp., a Delaware corporation, and a direct wholly owned subsidiary of Holdings.
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•
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“common stock” means our Class A Common Stock and our Class B Common stock, together.
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•
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“Holdings” means WMG Holdings Corp., a Delaware corporation, and a direct wholly owned subsidiary of WMG.
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“SEC” means the U.S. Securities and Exchange Commission.
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“Warner Music Group” or “WMG” means Warner Music Group Corp., a Delaware corporation, without its consolidated subsidiaries.
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Proposal
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Board
Recommendation
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Page(s)
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1.
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Proposal 1: Election of eleven directors for a one-year term ending at the 2022 Annual Meeting of Stockholders
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FOR each of the
nominees
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2.
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Proposal 2: Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal year 2021
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FOR
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3.
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Proposal 3: Advisory vote to approve the compensation paid to the Company’s named executive officers
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FOR
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4.
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Proposal 4: Advisory vote on the frequency of future advisory votes to approve the compensation paid to the Company’s named executive officers
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FOR THREE
YEARS
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Name
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Age
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Principal Professional
Experience
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Expiration of
Term
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Independent
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Stephen Cooper
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74
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Chief Executive Officer of WMG
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2022
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No
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Lincoln Benet
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57
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Chief Executive Officer of Access
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2022
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No
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Alex Blavatnik
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56
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Executive Vice President and
Vice Chairman of Access
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2022
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No
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Len Blavatnik
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63
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Founder and Chairman of Access
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2022
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No
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Mathias Döpfner
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57
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Chairman and CEO of Axel Springer SE
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2022
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Yes
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Noreena Hertz
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53
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Associate Director of the
Centre for International
Business and Management at University of Cambridge
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2022
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Yes
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Ynon Kreiz
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55
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Chairman and CEO of Mattel, Inc.
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2022
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Yes
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Ceci Kurzman
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51
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Founder and President of Nexus Management Group, Inc.
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2022
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Yes
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Name
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Age
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Principal Professional
Experience
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Expiration of
Term
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Independent
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Thomas H. Lee
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76
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Chairman and CEO of Thomas H. Lee Capital, LLC, Chairman of Lee Equity Partners, LLC and Chairman of AGL Credit Management LP
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2022
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Yes
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Michael Lynton
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61
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Chairman of the Board of Snap, Inc.
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2022
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Yes
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Donald A. Wagner
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57
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Managing Director of Access
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2022
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No
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•
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Independent chairman
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•
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Majority independent board of directors
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•
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Annual election of directors
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Of Our 11 Nominees:
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6
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5
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1
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2
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are
independent
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are current
or former
CEOs
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is African-
American
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are
women
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Stephen Cooper
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Age: 74
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Director since: 2011
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Committee memberships: Finance
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Professional Experience: Mr. Cooper has served as a director since July 20, 2011 and as our CEO since August 18, 2011. Previously, Mr. Cooper was our Chairman of the Board from July 20, 2011 to August 18, 2011. Mr. Cooper is a member of the Board of Directors of LyondellBasell, one of the world’s largest olefins, polyolefins, chemicals and refining companies. He has more than 30 years of experience as a financial advisor, and has served as Chief Executive Officer of Metro-Goldwyn-Mayer, Inc.; Chief Executive Officer of Hawaiian Telcom; Executive Chairman of Blue Bird Corporation; Executive Chairman of the Board of Collins & Aikman Corporation; Chief Executive Officer of Krispy Kreme Doughnuts; and Chief Executive Officer and Chief Restructuring Officer of Enron Corporation. Mr. Cooper also serves on the Board of Directors of LyondellBasell Industries N.V. Mr. Cooper is also the Managing Partner of Cooper Investment Partners, a private equity firm.
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Skills and Qualifications: Mr. Cooper brings beneficial experience and attributes to the Board, including more than 30 years of experience as a financial advisor, and his experience having served as chairman or chief executive officer of various businesses, including Chief Executive Officer of Metro-Goldwyn-Mayer, Inc. and Chief Executive Officer of Hawaiian Telcom.
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Lincoln Benet
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Age: 57
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Director since: 2011
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Committee memberships: Compensation (chair), Nominating and Corporate Governance (chair), Executive, Finance
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Professional Experience: Mr. Benet has served as a director since July 20, 2011. Mr. Benet is the Chief Executive Officer of Access. Prior to joining Access in 2006, Mr. Benet spent 17 years at Morgan Stanley, most recently as a Managing Director. His experience spans corporate finance, mergers and acquisitions, fixed income and capital markets. Mr. Benet is a member of the Supervisory Board of Directors for LyondellBasell Industries N.V. and a member of the boards of DAZN Group Limited and, until 2019, Clal Industries Ltd. Mr. Benet graduated summa cum laude with a B.A. in Economics from Yale University and received his M.B.A. from Harvard Business School.
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Skills and Qualifications: Mr. Benet brings beneficial experience and attributes to the Board, among which are his extensive experience advising companies, in particular as the Chief Executive Officer of Access, in his role as a director of LyondellBasell Industries N.V. and in his former role as director of Clal Industries Ltd. In addition, Mr. Benet possesses experience in advising and managing publicly traded and privately held enterprises and has significant expertise with the corporate finance and strategic business planning activities that are unique to leveraged companies.
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Alex Blavatnik
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Age: 56
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Director since: 2011
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Committee memberships: Compensation, Finance
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Professional Experience: Mr. Blavatnik has served as a director since July 20, 2011. Mr. Blavatnik is an Executive Vice President and Vice Chairman of Access. A 1993 graduate of Columbia University, Mr. Blavatnik joined Access in 1996 to manage the Company’s growing activities in Russia. Currently, he oversees Access’s operations out of its New York-based headquarters and serves as a director of various companies in the Access global portfolio. In addition, Mr. Blavatnik is engaged in numerous philanthropic pursuits and sits on the boards of several educational and charitable institutions. Mr. Blavatnik is the brother of Len Blavatnik.
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Skills and Qualifications: Mr. Blavatnik brings beneficial experience and attributes to the Board, among which is his extensive experience advising companies, particularly as Vice Chairman of Access, as a director of Clal Industries Ltd. and, previously, as a director of OGIP Ventures, Ltd. In addition, Mr. Blavatnik possesses experience in advising and managing publicly traded and privately held enterprises and has significant expertise with the corporate finance and strategic business planning activities that are unique to leveraged companies.
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Len Blavatnik
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Age: 63
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Director since: 2011
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Committee memberships: Compensation, Nominating and Corporate Governance, Executive
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Professional Experience: Mr. Blavatnik has served as a director and as Vice Chairman of the Board of the Company since July 20, 2011. Mr. Blavatnik is the founder and Chairman of Access, a privately held, U.S. industrial group with global strategic investments. He previously served as a member of the Board from March 2004 to January 2008. Mr. Blavatnik provides financial support to, and remains engaged in, many educational pursuits. Mr. Blavatnik is a member of boards at Oxford University and Tel Aviv University, and is a member of Harvard University’s Committee on University Resources, Global Advisory Council and the Task Force on Science and Engineering. In 2010, the Blavatnik Family Foundation committed £75 million to establish the Blavatnik School of Government at the University of Oxford. Mr. Blavatnik and the Blavatnik Family Foundation have also been generous supporters of other leading educational, scientific, cultural and charitable institutions throughout the world. Mr. Blavatnik is a member of the board of directors of the 92nd Street Y in New York, The Mariinsky Foundation of America, The Carnegie Hall Society, Inc. and The Center for Jewish History in New York. He is also a Trustee of the State Hermitage Museum in St. Petersburg, Russia. Mr. Blavatnik emigrated to the U.S. in 1978 and became a U.S. citizen in 1984. He received his Master’s degree from Columbia University in 1981 and his M.B.A. from Harvard Business School in 1989. Mr. Blavatnik is the brother of Alex Blavatnik.
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Skills and Qualifications: Mr. Blavatnik brings beneficial experience and attributes to the Board, among which is his extensive experience advising companies, particularly as founder and Chairman of Access and in his role as a former director of UC Rusal plc and TNK-BP Limited. In addition, Mr. Blavatnik possesses experience in advising and managing publicly traded and privately held enterprises and has significant expertise with the corporate finance and strategic business planning activities that are unique to leveraged companies.
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Noreena Hertz
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Age: 53
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Director since: 2017
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Committee memberships: Nominating and Corporate Governance
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Professional Experience: Professor Hertz has served as a director since September 15, 2017 and previously served as a director from May 1, 2014 through May 22, 2016. Professor Hertz advises some of the biggest organizations and most senior figures in the world on strategy, decision- making, corporate social responsibility and global economic and geo-political trends. Her best-selling books, Eyes Wide Open, the Silent Takeover, IOU: The Debt Threat and The Lonely Century have been published in over 20 countries. Professor Hertz served as a member of Citigroup’s Politics and Economics Global Advisory Board between 2007 and 2008 and as a member of the Advisory Group steering McKinsey CEO Dominic Barton’s Inclusive Capitalism Taskforce between 2012 and 2013. A much sought-after commentator on television and radio Hertz contributes to a wide range of publications and networks including The BBC, CNN, CNBC, CBS, ITV, The New York Times, The Wall Street Journal, The Daily Beast, the Financial Times, the Guardian, The Washington Post, The Times of London, Wired, and Nature. She has given Keynote Speeches at TED and The World Economic Forum, as well as for leading global corporations, and has shared platforms with such luminaries as President Bill Clinton and James Wolfensohn. An influential economist on the international stage, Professor Hertz also played a pivotal role in the development of (RED), an innovative commercial model to raise money for people with AIDS in Africa, having inspired Bono (co-founder of the project) with her writings. Professor Hertz has been described by the Observer as “one of the world’s leading young thinkers,” Vogue as “one of the world’s most inspiring women” and was featured on the cover of Newsweek’s September 30, 2013 issue in Europe, Asia and the Middle East. She has an M.B.A. from the Wharton School of the University of Pennsylvania and a Ph.D. from the University of Cambridge. Having spent 10 years at the University of Cambridge as Associate Director of the Centre for International Business and Management, in 2014 she moved to University College London where she is a Visiting Professor at the Institute for Global Prosperity.
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Skills and Qualifications: Professor Hertz brings beneficial experience and attributes to the Board, including over 25 years of experience in advising companies in a variety of sectors and geographies on strategic and policy decisions, intelligence gathering and analysis, millennials and post-millennials and stakeholder management and corporate social responsibility. In addition, Ms. Hertz has also held senior academic positions where her research has focused on decision-making, risk assessment and management, globalization, innovation and corporate social responsibility.
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Ynon Kreiz
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Age: 55
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Director since: 2016
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Committee memberships: Audit
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Professional Experience: Mr. Kreiz has served as a director since May 9, 2016. Since May 2018, Mr. Kreiz has been the Chairman and CEO of Mattel, Inc. (NASDAQ: MAT), one of the world’s largest toy companies. From May 2013 to January 2016, Mr. Kreiz served as the Chairman and CEO of Maker Studios, a global leader in online short-form video and one of the largest content networks on YouTube. From June 2008 to June 2011, Mr. Kreiz was Chairman and CEO of Endemol Group, one of the world’s largest independent television production companies. From 2005 to 2007, Mr. Kreiz was a General Partner at Balderton Capital (formerly Benchmark Capital Europe). From 1996 to 2002, Mr. Kreiz was co-founder, Chairman and CEO of Fox Kids Europe N.V., a leading pay-TV channel in Europe and the Middle East, broadcasting in 56 countries. Mr. Kreiz holds a B.A. in Economics and Management from Tel Aviv University and an M.B.A. from UCLA’s Anderson School of Management, where he currently serves on the Board of Advisors.
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Skills and Qualifications: Mr. Kreiz brings beneficial experience and attributes to the Board, including his extensive experience advising and managing companies, having served as Chairman and CEO of Mattel, Maker Studios, the Endemol Group and Fox Kids Europe, and also as a general partner at Balderton Capital (formerly Benchmark Capital Europe).
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Ceci Kurzman
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Age: 51
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Director since: 2020
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Committee memberships: Nominating and Corporate Governance
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Professional Experience: Ms. Kurzman is founder and President of Nexus Management Group, Inc., a former talent management and current investment company. Ms. Kurzman currently serves on the Board of Directors, Audit Committee, and Compensation Committee of Revlon, Inc., as well as on the Board of Directors of various organizations including Man Group plc and Cirque du Soleil Entertainment Group. An accomplished investor and entrepreneur, Ms. Kurzman also achieved numerous business and marketing successes as an executive at Arista Records and Sony Music’s Epic Records, before founding Nexus and managing an impressive roster of superstar artists. Today, Ms. Kurzman continues to combine her strategic business leadership, with her ability to anticipate trends and drive revenue growth from an investment portfolio of trailblazing companies, in partnership with established private equity partners.
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Skills and Qualifications: Ms. Kurzman’s various experiences in the entertainment industry, advising and managing companies, among other qualifications described above, give her the qualifications and skills to serve as a director of the Company.
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Thomas H. Lee
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Age: 76
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Director since: 2011
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Committee memberships: Audit, Compensation
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Professional Experience: Mr. Lee has served as a director since August 17, 2011. Mr. Lee had previously served as our director from March 4, 2004 to July 20, 2011. He is Chairman and CEO of Thomas H. Lee Capital, LLC, Chairman of Lee Equity Partners, LLC and Chairman of AGL Credit Management LP. In 1974, Mr. Lee founded the Thomas H. Lee Company, the predecessor of Thomas H. Lee Partners, L.P., and from that time until March 2006 served as its Chairman and CEO. From 1966 through 1974, Mr. Lee was with First National Bank of Boston where he directed the bank’s high technology lending group from 1968 to 1974 and became a Vice President in 1973. Prior to 1966, Mr. Lee was a securities analyst in the institutional research department of L.F. Rothschild in New York. Mr. Lee serves or has served, including during the past five years, as a director of numerous public and private companies in which he and his affiliates have invested, including MidCap Financial LLC, Papa Murphy’s International, LLC, Edelman Financial Services, LLC, Aimbridge Hospitality Holdings LLC and KMAC Enterprises Inc. Mr. Lee is currently a Trustee of Lincoln Center for the Performing Arts, NYU Langone Medical Center and the New York City Police Foundation among other civic and charitable organizations. He also serves on the Executive Committee for Harvard University’s Committee on University Resources. Mr. Lee is a 1965 graduate of Harvard College.
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Skills and Qualifications: Mr. Lee brings beneficial experience and attributes to the Board, including his extensive experience advising and managing companies, serving as the Chairman and CEO of Thomas H. Lee Capital, LLC, Thomas H. Lee Capital Management, LLC and Lee Equity Partners, LLC and serving as or having served as a director of numerous public and private companies. In addition, Mr. Lee was also part of the investor group that acquired the Company from Time Warner in the 2004 acquisition and was a director of our company from March 2004 until July 2011, before subsequently rejoining the Board in August 2011, and has a detailed understanding of the Company.
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Michael Lynton
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Age: 61
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Director since: 2019
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Committee memberships: Executive Committee (chair)
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Professional Experience: Mr. Lynton has served as Chairman of the Board of the Company since February 7, 2019. Mr. Lynton also currently serves as Chairman of the Board of Snap, Inc., a position he has held since 2016 after joining Snap Inc.’s board in 2013. Mr. Lynton also currently serves as Chairman of the Board of Directors of Schrödinger, Inc., a position he has held since October 2018 after joining the board of directors of Schrödinger, Inc. in January 2018, and is a member of the board of directors of Pearson plc. and Ares Management, L.P. Previously, Mr. Lynton served as the CEO of Sony Entertainment from April 2012 until August 2017, overseeing Sony’s global entertainment businesses, including Sony Music Entertainment, Sony/ATV Music Publishing and Sony Pictures Entertainment. Mr. Lynton also served as Chairman and CEO of Sony Pictures Entertainment since January 2004. Prior to joining Sony Pictures, Mr. Lynton worked for Time Warner, and from 2000 to 2004, he served as CEO of AOL Europe, President of AOL International and President of Time Warner International. From 1996 to 2000, Mr. Lynton served as Chairman and CEO of Pearson plc’s Penguin Group where he oversaw the acquisition of Putnam, Inc. and extended the Penguin brand to music and the Internet. Mr. Lynton joined the Walt Disney Company in 1987, and from 1992 to 1996, he served as President of Disney’s Hollywood Pictures. Mr. Lynton also serves on the boards of the Tate, The Boston Beer Company, Inc. and Pandora Media, Inc. Mr. Lynton holds a B.A. in History and Literature from Harvard College and received his M.B.A. from Harvard University.
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Skills and Qualifications: Mr. Lynton brings beneficial experience and attributes to the Board, including his various experiences in the entertainment industry and advising and managing companies.
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|
Name of Beneficial Owner
|
| |
Number of
shares of Class A
Common Stock
beneficially
owned
|
| |
Number of shares
of Class B
Common Stock
beneficially
owned
|
| |
Ownership
Percent of
Class A
Common
Stock(1)
|
| |
Ownership
Percent of
Class B
Common
Stock(1)
|
AI Entertainment Holdings LLC
|
| |
—
|
| |
380,257,511
|
| |
—
|
| |
94.3%
|
Tencent Holdings Limited(2)
|
| |
8,000,000
|
| |
—
|
| |
7.2%
|
| |
—
|
Sands Capital Management, LLC(3)
|
| |
13,117,933
|
| |
—
|
| |
11.8%
|
| |
—
|
Michael Lynton(4)
|
| |
7,573
|
| |
—
|
| |
*
|
| |
—
|
Len Blavatnik(5)
|
| |
—
|
| |
397,430,967
|
| |
—
|
| |
98.6%
|
Lincoln Benet(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Alex Blavatnik
|
| |
—
|
| |
583,061
|
| |
—
|
| |
*
|
Mathias Döpfner(4)
|
| |
5,197
|
| |
—
|
| |
*
|
| |
—
|
Noreena Hertz(4)
|
| |
5,197
|
| |
—
|
| |
*
|
| |
—
|
Ynon Kreiz(4)
|
| |
5,197
|
| |
—
|
| |
*
|
| |
—
|
Thomas H. Lee(4)
|
| |
5,197
|
| |
—
|
| |
*
|
| |
—
|
Donald A. Wagner(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Ceci Kurzman(4)
|
| |
2,553
|
| |
—
|
| |
*
|
| |
—
|
Stephen Cooper(7)
|
| |
11,852,797
|
| |
—
|
| |
10.7%
|
| |
—
|
Nancie Cooper(7)
|
| |
5,926,399
|
| |
—
|
| |
5.3%
|
| |
—
|
Max Lousada(8)
|
| |
4,191,356
|
| |
—
|
| |
3.8%
|
| |
—
|
Eric Levin
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Guy Moot
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Paul M. Robinson
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
All Directors, Director Nominees and Executive Officers as a group (19 persons)(5)
|
| |
16,075,067
|
| |
398,014,028
|
| |
14.5%
|
| |
98.7%
|
*
|
Less than one percent.
|
(1)
|
Percentage of total voting power represents voting power with respect to all shares of our Class A Common Stock and Class B Common Stock, as a single class. The holders of our Class B Common Stock are entitled to 20 votes per share, and holders of our Class A Common Stock are entitled to one vote per share.
|
(2)
|
Based on a Schedule 13G filed with the SEC on June 12, 2020 by Tencent Holdings Limited and Huang River Investment Limited, reporting beneficial ownership as of June 12, 2020, with Tencent Holdings Limited having sole voting power with respect to 4,000,000 shares of our Class A Common Stock, shared voting power with respect to 4,000,000 shares of our Class A Common Stock,
|
(3)
|
Based on a Schedule 13G/A filed with the SEC on August 10, 2020 by Sands Capital Management, LLC, reporting beneficial ownership as of July 31, 2020, with sole voting power with respect to 9,082,167 shares of our Class A Common Stock, shared voting power with respect to 0 shares of our Class A Common Stock, sole dispositive power with respect to 13,117,933 shares of our Class A Common Stock and shared dispositive power with respect to 0 shares of our Class A Common Stock. Sands Capital Management, LLC has its principal business office at 1000 Wilson Blvd., Suite 3000, Arlington, VA 22209.
|
(4)
|
Represents shares of unvested restricted stock received as compensation for service as a director.
|
(5)
|
Represents shares held by entities over which Len Blavatnik either exercises or may be deemed to exercise direct or indirect control as of the date of this proxy.
|
(6)
|
Does not reflect shares of the Company’s common stock that may be attributable to the beneficial owners of limited partnership interests in certain entities affiliated with Access and controlled by Len Blavatnik. Messrs. Benet and Wagner disclaim any beneficial ownership of shares of the Company’s common stock represented by such limited partnership interests.
|
(7)
|
Includes 5,926,399 shares of Class A Common Stock beneficially owned by Nancie Cooper as to which Mr. Cooper disclaims beneficial ownership.
|
(8)
|
Includes shares of Class A Common Stock represented by 2,133,784 Class B Units of Management LLC (as defined herein) pursuant to the terms of, and subject to the limitations and restrictions set forth in, the Second Amended and Restated Limited Liability Company Agreement of Management LLC, as amended, which Class B Units are redeemable for a number of shares of Class B Common Stock equal to 2,133,784 less a number of shares of Class B Common Stock having a value equal to $6,802,981 on the date of such redemption (the “Benchmark Shares”), which is the sum of the benchmark amounts of the Class B Units. Any shares of Class B Common Stock issued to Mr. Lousada upon a redemption of Class B Units will immediately and automatically convert to shares of Class A Common Stock on a one-for-one basis, and the corresponding Class B Units will be cancelled. Mr. Lousada expressly disclaims beneficial ownership of the Benchmark Shares. Also includes vested Deferred Equity Units issued under the Pre-IPO Plan (as defined herein). These Deferred Equity Units will be settled for shares of the Company’s Class A Common Stock on a one-for-one basis by no later than December 31, 2025. Upon such settlement, the corresponding Deferred Equity Units will be cancelled.
|
•
|
KPMG’s independence and objectivity;
|
•
|
KPMG’s and the lead engagement partner’s capability and expertise in handling the breadth and complexity of our operations;
|
•
|
KPMG’s tenure as independent auditor for the Company;
|
•
|
historical and recent performance of KPMG, including the extent and quality of communications with members of the Audit Committee; and
|
•
|
the impact of a change in the independent auditor.
|
|
| |
Year Ended
September 30,
2020
|
| |
Year Ended
September 30,
2019
|
Audit Fees
|
| |
$5,564
|
| |
$5,302
|
Audit-Related Fees
|
| |
822
|
| |
635
|
Tax Fees
|
| |
301
|
| |
206
|
All Other Fees
|
| |
285
|
| |
84
|
Total Fees
|
| |
$6,972
|
| |
$6,227
|
•
|
Stephen Cooper, Chief Executive Officer (“CEO”)
|
•
|
Eric Levin, Executive Vice President and Chief Financial Officer
|
•
|
Max Lousada, Chief Executive Officer, Warner Recorded Music
|
•
|
Guy Moot, Co-Chair and Chief Executive Officer, Warner Chappell Music
|
•
|
Paul M. Robinson, Executive Vice President and General Counsel and Secretary
|
•
|
Alignment of executive and stockholder interests by providing incentives linked to operating performance and achievement of cash flow and strategic objectives. We are committed to creating stockholder value and believe that our executives and employees should be provided incentives through our compensation programs that align their interests with those of our stockholders. Accordingly, we provide our executives with annual cash bonus incentives linked to our operating performance. In addition, in 2020, we adopted the Omnibus Incentive Plan, pursuant to which we made grants of long-term equity incentive compensation to our directors, certain of our officers and other employees beginning in fiscal year 2021, as described below. In 2013, we adopted the Pre-IPO Plan, which, also as described below, is an incentive compensation program that pays annual bonuses based on our free cash flow and offers participants the opportunity to share in appreciation of our common stock. For information on the components of our executive compensation programs and the reasons why each is used, see “Components of Executive Compensation” below.
|
•
|
A clear link between an executive’s compensation and Company-wide performance. Our NEOs have incentive compensation that is tied to Company-wide performance. In fiscal year 2020, two of our NEOs (Messrs. Cooper and Lousada) and some of our other senior executives participated in the Pre-IPO Plan. As further discussed below, the Pre-IPO Plan was designed to reward our executives’ contributions to our free cash flow and long-term value. For other executives, their annual incentive bonus is discretionary and designed to reward their achievement of specified key goals, which include, among other things, the successful implementation of strategic initiatives, realizing superior operating and financial performance, and other factors that we believe are important, such as the promotion of an ethical work environment and teamwork within the Company. In addition, during fiscal year 2020, in anticipation of the IPO, we adopted the Omnibus Incentive Plan, an equity-based compensation plan that allows us to grant a variety of awards, including restricted stock units covering shares of our common stock. We believe that the initial grants and anticipated future annual grants to our NEOs under the Omnibus Incentive Plan will provide strong long-term performance and retention incentives for executives and increase their vested interest in the performance of the Company and the value of our common stock. We believe our compensation structure motivates our executives to achieve these goals and rewards them for their significant efforts and contributions to the Company and the results they achieve.
|
•
|
The extremely competitive nature of the media and entertainment industry, and our need to attract and retain the most creative and talented industry leaders. We compete for talented executives in relatively high-priced markets, and the Compensation Committee takes this into consideration when making compensation decisions. For example, we compete for executives with other recorded music and music publishing companies, other entertainment, media and technology companies, law firms, private ventures, investment banks and many other companies that offer high levels of compensation. We believe that our senior management team is among the best in the industry and is the right team to lead us to long-term success. Our commitment to ensuring that we are led by the right executives is a high priority, and we make our compensation decisions accordingly.
|
•
|
Base salary;
|
•
|
Participation in the free cash flow bonus pool of the Pre-IPO Plan or a discretionary or target annual cash bonus;
|
•
|
Severance payable upon a qualifying termination of employment; and
|
•
|
Benefits, including participation in a defined contribution plan and health, life insurance and disability insurance plans.
|
Name
|
| |
RSUs
|
Stephen Cooper
|
| |
189,856
|
Eric Levin
|
| |
27,122
|
Guy Moot
|
| |
13,561
|
Paul M. Robinson
|
| |
8,137
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($)
|
| |
Bonus
($)(1)
|
| |
Non-Equity
Incentive Plan
Compensation
($)(2)
|
| |
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
| |
All Other
Compensation
($)(3)
|
| |
Total
($)
|
Stephen Cooper
CEO
|
| |
2020
|
| |
$1,000,000
|
| |
—
|
| |
$8,225,000
|
| |
—
|
| |
$6,749,945
|
| |
$15,974,945
|
|
2019
|
| |
$1,000,000
|
| |
—
|
| |
$7,075,000
|
| |
—
|
| |
$2,013,264
|
| |
$10,088,264
|
||
|
2018
|
| |
$1,000,000
|
| |
—
|
| |
$9,325,000
|
| |
—
|
| |
$24,025,974
|
| |
$34,350,974
|
||
Eric Levin
Executive Vice President and Chief Financial Officer
|
| |
2020
|
| |
$850,000
|
| |
$8,892,840
|
| |
—
|
| |
—
|
| |
$8,550
|
| |
$9,751,390
|
|
2019
|
| |
$850,000
|
| |
$1,034,340
|
| |
—
|
| |
—
|
| |
$8,400
|
| |
$1,892,740
|
||
|
2018
|
| |
$750,000
|
| |
$677,907
|
| |
—
|
| |
—
|
| |
$8,250
|
| |
$1,436,157
|
||
Max Lousada(4)
CEO, Warner Recorded Music
|
| |
2020
|
| |
$5,100,000
|
| |
—
|
| |
$1,538,219
|
| |
—
|
| |
$2,072,353
|
| |
$8,710,572
|
|
2019
|
| |
$5,108,000
|
| |
—
|
| |
—
|
| |
—
|
| |
$510,330
|
| |
$5,618,330
|
||
|
2018
|
| |
$5,180,000
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,467,059
|
| |
$6,647,059
|
||
Guy Moot(5)
Co-Chair and CEO, Warner Chappell Music
|
| |
2020
|
| |
$1,750,000
|
| |
$1,870,400
|
| |
—
|
| |
—
|
| |
$390,571
|
| |
$4,010,971
|
|
2019
|
| |
$829,994
|
| |
$913,985
|
| |
—
|
| |
—
|
| |
$322,754
|
| |
$2,066,733
|
||
Paul M. Robinson(6)
Executive Vice President and General Counsel and Secretary
|
| |
2020
|
| |
$850,000
|
| |
$4,392,840
|
| |
—
|
| |
—
|
| |
$8,550
|
| |
$5,251,390
|
|
2019
|
| |
$850,000
|
| |
$884,340
|
| |
—
|
| |
—
|
| |
$8,400
|
| |
$1,742,740
|
||
|
2018
|
| |
$750,000
|
| |
$633,438
|
| |
—
|
| |
—
|
| |
$8,250
|
| |
$1,391,738
|
(1)
|
Represents discretionary cash bonuses for fiscal year 2020 performance for each of Messrs. Levin, Moot and Robinson and special one-time IPO bonuses for Messrs. Levin and Robinson, and discretionary cash bonuses for fiscal year 2019 to Messrs. Levin, Moot and Robinson and for fiscal year 2018 to Mr. Levin and Mr. Robinson.
|
(2)
|
For the 2020 fiscal year, all of Mr. Cooper’s and a portion of Mr. Lousada’s free cash flow bonuses under the Pre-IPO Plan will be paid in cash because they have acquired all of their deferred equity unit allocation. All of Mr. Cooper’s 2019 and 2018 free cash flow bonus amounts were also paid in cash.
|
(3)
|
Fiscal year 2020 includes 401(k) matching contributions of $8,550 for Mr. Levin and $8,550 for Mr. Robinson, and defined contribution pension matching contributions of $23,953 (£18,787) for Mr. Lousada. Additionally, fiscal year 2020 for Messrs. Cooper and Lousada, includes $6,749,945 and $1,996,265, respectively, in cash dividends paid to them under the Pre-IPO Plan in respect of their then-outstanding deferred equity units and Profits Interests. Mr. Lousada received a car allowance of $19,125 (£15,000) and an employer life assurance contribution of $12,628 (£9,904) as well as employer contributions with respect to private medical insurance and income protection. Mr. Lousada was also reimbursed for certain tax preparation costs. Mr. Moot received relocation assistance totaling $390,571, including a related tax gross-up of $135,059.
|
(4)
|
The amounts reported for Mr. Lousada have been converted from British pound sterling to U.S. dollars using a conversion factor of 1.275, 1.277 and 1.295 for fiscal years 2020, 2019 and 2018, respectively.
|
(5)
|
Mr. Moot became an NEO in fiscal year 2019.
|
(6)
|
Mr. Robinson became an NEO in fiscal year 2020, and he was previously an NEO in fiscal year 2018.
|
(1)
|
the term of Mr. Levin’s employment agreement ends on September 30, 2023; and
|
(2)
|
Mr. Levin’s base salary for fiscal year 2020 was $850,000 and his target bonus was $850,000. Additionally, Mr. Levin’s base salary and target bonus will continue to be $850,000 for fiscal year 2021, and will increase to $900,000 for fiscal years 2022 and 2023.
|
(1)
|
the term of Mr. Lousada’s employment agreement ends on September 30, 2022;
|
(2)
|
Mr. Lousada’s base salary for fiscal year 2020 was $5,100,000 (£4,000,000);
|
(3)
|
eligibility to participate in the Pre-IPO Plan; and
|
(4)
|
eligibility to participate in the defined contribution pension plan for U.K. employees, along with company matching contributions of up to 10% of Mr. Lousada’s base salary.
|
(1)
|
the term of Mr. Moot’s employment agreement ends on March 31, 2024; and
|
(2)
|
Mr. Moot’s annual base salary was $1,750,000, and his target bonus was the same amount.
|
(1)
|
the term of Mr. Robinson’s employment agreement ends on September 30, 2022; and
|
(2)
|
Mr. Robinson’s annual base salary was $850,000 and his target bonus was $850,000.
|
Name
|
| |
Number of Shares or Units
of Stock That Have Not Vested
(#)(1)
|
| |
Market Value of Shares or Units
of Stock That Have Not Vested
($)(4)
|
Stephen Cooper
|
| |
—(2)
|
| |
$—
|
|
| |
—(3)
|
| |
$—
|
Max Lousada
|
| |
549,453.54(2)
|
| |
$14,840,740
|
|
| |
549,453.54(3)
|
| |
$13,088,959
|
(1)
|
An NEO’s deferred equity units and Profits Interests generally vest over time as equivalent amounts of annual free cash flow bonuses are deferred under the Pre-IPO Plan. All of Mr. Cooper’s deferred equity units, including special deferred equity units, and Profits Interests had vested as of September 25, 2020.
|
(2)
|
Uncredited deferred equity units approved for grant to the NEO as of September 25, 2020. Each deferred equity unit is equivalent to one share of our common stock.
|
(3)
|
Unvested Profits Interests. This table does not include vested Profits Interests that were held by the NEOs or Class A units of Management LLC received in settlement of vested deferred equity units held directly and in trust by Mr. Cooper, in each case, as of September 25, 2020: for Mr. Cooper, 6,517,564 vested Profits Interests, with a value of $159,893,929; and for Mr. Lousada, 1,646,058 vested Profits Interests, with a value of $39,212,019. The Profits Interests’ benchmark amount reflects the value of our common stock on the grant date of the Profits Interest, and the value of the Profits Interests reflects the appreciation in the fair market value of our common stock above its benchmark amount.
|
(4)
|
Amounts in this column are calculated based on the closing price of our common stock on September 25, 2020, the last business day of fiscal year 2020, which was $27.01. Assumptions used in the calculation of this amount are included in Note 13 to our audited financial statements for the fiscal year ended September 30, 2020.
|
Name
|
| |
Number of Shares or Units
of Stock Acquired on Vesting
(#)
|
| |
Value Realized on Vesting
($)(3)
|
Stephen Cooper
|
| |
—(1)
|
| |
$—
|
|
| |
—(2)
|
| |
$—
|
Max Lousada
|
| |
887,641.64(1)
|
| |
$23,975,201
|
|
| |
887,641.64(2)
|
| |
$21,145,201
|
(1)
|
Deferred equity units that vested in fiscal year 2020. The deferred equity units vest in the fiscal year following the fiscal year in which the NEO’s free cash flow bonuses are paid.
|
(2)
|
Profits Interests that vested in fiscal year 2020 reflect a number of Profits Interests equal to the number of deferred equity units acquired by Mr. Lousada in fiscal year 2020.
|
(3)
|
Reflects the difference between the purchase price of a deferred equity unit and the fair market value of a deferred equity unit on the date Mr. Lousada acquired the vested deferred equity units in December 2018, and for Profits Interests reflect the appreciation in the fair market value of a share of our common stock as of the vesting date since the date of grant. Pursuant to the Pre-IPO Plan and Mr. Lousada’s election, his deferred equity units and Profits Interests will not be settled or redeemed until the scheduled redemption dates or, if earlier, termination of his employment. See the descriptions in the narratives accompanying the “Grants of Plan-Based Awards in Fiscal Year 2020” table above and below under “Potential Payments upon Termination or Change-In-Control.” In December 2020, following our 2020 fiscal year, all of Mr. Cooper’s Profits Interests, Acquired LLC Units and deferred equity units then outstanding under the Pre-IPO Plan were redeemed for shares of our common stock in accordance with the terms of the Pre-IPO Plan.
|
Name
|
| |
Executive
Contributions
in
Last FY ($)(1)
|
| |
Registrant
Contributions
in
Last FY ($)(2)
|
| |
Aggregate
Earnings in
Last FY ($)(3)
|
| |
Aggregate
Withdrawals /
Distributions
($)(4)
|
| |
Aggregate
Balance at Last
FYE ($)(5)
|
Stephen Cooper
|
| |
$—
|
| |
$—
|
| |
$41,929,446
|
| |
$16,480,357
|
| |
$58,409,803
|
Max Lousada
|
| |
$2,830,000
|
| |
$4,013,806
|
| |
$39,710,906
|
| |
$—
|
| |
$55,575,023
|
(1)
|
Amounts of free cash flow bonuses that were deferred by Mr. Lousada under the Pre-IPO Plan through the acquisition of vested deferred equity units in fiscal year 2020.
|
(2)
|
Reflects the difference between the purchase price of a deferred equity unit and the fair market value of a deferred equity unit on the date Mr. Lousada acquired the vested deferred equity units in fiscal year 2020.
|
(3)
|
Reflects the increase in value of vested deferred equity units outstanding as of September 25, 2020 since October 1, 2019.
|
(4)
|
For Mr. Cooper, reflects the value of the shares of common stock distributed to him in December 2019 under the Pre-IPO Plan in settlement of a portion of his deferred equity units.
|
(5)
|
For Mr. Cooper, includes the value of the shares of common stock issued to him in December 2020 under the Pre-IPO Plan in settlement of his then-outstanding deferred equity units.
|
Name
|
| |
Salary (other
than accrued
amounts)(1)
|
| |
Bonus(2)
|
| |
Value of
Deferred
Compensation(3)
|
| |
Acceleration
of
Profits
Interests(4)
|
| |
Benefits
|
| |
Total
|
Stephen Cooper
|
| |
—
|
| |
$8,225,000
|
| |
$58,409,803
|
| |
—
|
| |
—
|
| |
$66,634,803
|
Eric Levin
|
| |
$850,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$850,000
|
Max Lousada(5)
|
| |
$7,650,000
|
| |
$3,290,000
|
| |
$55,575,023
|
| |
—
|
| |
—
|
| |
$66,515,023
|
Guy Moot
|
| |
$2,625,000
|
| |
$1,870,400
|
| |
—
|
| |
—
|
| |
—
|
| |
$4,495,400
|
Paul M. Robinson
|
| |
$1,250,000
|
| |
$892,840
|
| |
—
|
| |
—
|
| |
—
|
| |
$2,142,840
|
(1)
|
For Messrs. Levin, Lousada, Moot and Robinson, the amount represents the severance payable to them on such a qualifying termination.
|
(2)
|
For Messrs. Cooper and Lousada, represents a pro rata amount of the annual free cash flow bonus payable under the Pre-IPO Plan (or, since the termination date is assumed to be September 25, 2020, their full 2020 annual bonuses). For Mr. Moot and Mr. Robinson, represents the actual 2020 annual bonus paid assuming the Company in its good-faith discretion determined to pay that amount.
|
(3)
|
Reflects the value of vested deferred equity units that would be settled on a termination of employment without “cause” or by the NEO for “good reason” (including, in Mr. Cooper’s case, units held in trust).
|
(4)
|
Profits Interests will not accelerate on a termination of employment that is not in connection with a change in control of the Company. This table does not include vested Profits Interests held by the NEOs (or, in Mr. Cooper’s case, Profits Interests held in trust).
|
(5)
|
The amounts reported for Mr. Lousada have been converted from British pound sterling to U.S. dollars using a conversion factor of 1.275.
|
Name
|
| |
Value of Deferred
Compensation(1)
|
| |
Acceleration of
Profits Interests(2)
|
| |
Total
|
Stephen Cooper
|
| |
$58,409,803
|
| |
$—
|
| |
$58,409,803
|
Max Lousada
|
| |
$55,575,023
|
| |
$13,088,959
|
| |
$68,663,982
|
(1)
|
For each of Messrs. Cooper and Lousada, represents the value of the NEO’s deferred equity units that were vested and outstanding on September 25, 2020 and for Mr. Cooper, the then-outstanding portion of the additional deferred equity units granted to him in
|
(2)
|
For Mr. Lousada, his Profits Interests that would have vested if the maximum amount of his 2020 free cash flow bonus permitted to be deferred under the Pre-IPO Plan would have been deferred. The value of the Profits Interests reflects the appreciation in the fair market value of a share of our common stock as of September 25, 2020 since the date of grant. In each case, the value of the Profits Interests assumes that Management LLC was liquidated and its proceeds distributed to its members, including our NEOs. This table does not include vested Profits Interests held directly or in trust by the NEOs or Profits Interests or Class A units in Management LLC held directly and in trust by Mr. Cooper.
|
Name
|
| |
Bonus(1)
|
| |
Value of Deferred
Compensation(2)
|
| |
Acceleration of
Profits Interests(3)
|
| |
Total
|
Stephen Cooper
|
| |
$8,225,000
|
| |
$58,409,803
|
| |
—
|
| |
$66,634,803
|
Max Lousada
|
| |
$3,290,000
|
| |
$55,575,023
|
| |
—
|
| |
$58,865,023
|
Guy Moot
|
| |
$1,870,400
|
| |
—
|
| |
—
|
| |
$1,870,400
|
(1)
|
Represents a pro rata amount of the annual free cash flow bonus payable under the Pre-IPO Plan (or, since the termination date is assumed to be September 25, 2020, the full 2020 annual bonus) for each of Messrs. Cooper and Lousada. For Mr. Moot, represents the actual 2020 bonus paid assuming the Company in its good-faith discretion determined to pay that amount.
|
(2)
|
Represents the value of each NEO’s deferred equity units that were vested and outstanding on September 25, 2020, and the then-outstanding portion of the additional deferred equity units granted to Mr. Cooper in December 2013 to offset the impact of the $54 million of investments that were funded through fiscal year 2013 free cash flow (but reduced for $2.27 million of unrecovered investment amounts that were allocated to Mr. Cooper with such additional grant), in each case, based on the value of our common stock as of September 25, 2020.
|
(3)
|
Profits Interests will not accelerate on a termination of employment that is not in connection with a change in control of the Company. This table does not include vested Profits Interests held directly or in trust by the NEOs or Profits Interests or Class A units in Management LLC held directly and in trust by Mr. Cooper.
|
Compensation Item
|
| |
Amount
|
Annual Cash Retainer
|
| |
$100,000
|
Annual Equity Award
|
| |
$175,000 restricted stock grant with one-year vesting
|
Board Chair Additional Retainer
|
| |
$80,000 restricted stock grant with one-year vesting and $45,000 in cash
|
Committee Chair Annual Cash Retainer Fee
|
| |
Audit Committee: $15,000
|
|
Compensation Committee: $15,000
|
||
|
Nominating and Corporate Governance
|
||
|
Committee: $15,000
|
||
|
Executive Committee: $15,000
|
||
|
Finance Committee: $15,000
|
||
Committee Member Annual Cash Retainer Fee
|
| |
Audit Committee: $5,000
|
|
Compensation Committee: $5,000
|
||
|
Nominating and Corporate Governance
|
||
|
Committee: $5,000
|
||
|
Executive Committee: $5,000
|
||
|
Finance Committee: $5,000
|
Name
|
| |
Fees Earned
or Paid in
Cash
($)
|
| |
Stock
Awards
($)(1)
|
| |
Option
Awards
($)
|
| |
Non-Equity
Incentive Plan
Compensation
($)
|
| |
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
|
| |
All Other
Compensation
($)
|
| |
Total
($)
|
Michael Lynton
|
| |
$288,929
|
| |
$229,462
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$518,391
|
Lincoln Benet
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Alex Blavatnik
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Len Blavatnik
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Mathias Döpfner
|
| |
$242,078(2)
|
| |
$157,469
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$399,547
|
Noreena Hertz
|
| |
$84,643
|
| |
$157,469
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$242,112
|
Ynon Kreiz
|
| |
$84,643
|
| |
$157,469
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$242,112
|
Thomas H. Lee
|
| |
$86,250
|
| |
$157,469
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$243,719
|
Max Lousada(3)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Donald A. Wagner
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
(1)
|
The amounts reported in the “Stock Awards” column reflects the aggregate grant date fair value of awards granted under our Omnibus Incentive Plan, computed in accordance with FASB ASC Topic 718.
|
(2)
|
The amount reported for Mr. Döpfner includes payments of 62,500 Euros each for the first, second and third quarters of our 2020 fiscal year. These amounts have been converted from Euros to U.S. dollars using a conversion factor of 1.094, 1.110 and 1.081, resulting in payments of $68,350, $69,369 and $67,588, respectively. The remaining payments to Mr. Döpfner during our 2020 fiscal year were made in U.S. dollars.
|
(3)
|
Mr. Lousada resigned from the Board on September 30, 2020 and received no compensation for Board service in fiscal year 2020.
|
Plan Category
|
| |
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
|
| |
Weighted-
average exercise price
of outstanding
options, warrants and
rights
(b)
|
| |
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
|
Equity compensation plans approved by security holders(1)
|
| |
N/A
|
| |
N/A
|
| |
31,140,738
|
Equity compensation plans not approved by security holders(2)
|
| |
33,125,915
|
| |
N/A
|
| |
—
|
Total
|
| |
33,125,915
|
| |
N/A
|
| |
31,140,738
|
(1)
|
Shares of our Class A Common Stock issuable under the Warner Music Group Corp. 2020 Omnibus Incentive Plan.
|
(2)
|
Shares of our Class A Common Stock represented by (x) 9,484,990 deferred equity units under the Second Amended and Restated Warner Music Group Corp. Senior Management Free Cash Flow Plan; and (y) 7,789,849 Class A Units and 15,851,076 Class B Units of WMG Management Holdings, LLC, (“Management LLC”). Pursuant to the terms of the Second Amended and Restated Limited Liability Company Agreement of Management LLC, as amended, (i) the Class A Units are redeemable for 7,789,849 shares of our Class B Common Stock; and (ii) the Class B Units are redeemable for a number of shares of our Class B Common Stock equal to 15,851,076 less a number of shares of our Class B Common Stock having a value equal to $42,654,700, which is the sum of the benchmark amounts of the Class B Units. Shares of Class B Common Stock issued in redemption of Class A Units or Class B Units will immediately and automatically convert to shares of our Class A Common Stock on a one-for-one basis. The total number of shares of our Class B Common Stock issuable in respect of outstanding Class B Units as reflected in column (a) above is based on the closing price for a share of our Class A Common Stock on the last day of the Company’s 2020 fiscal year.
|
•
|
As described above under “Annual Free Cash Flow Bonus Pool,” a significant portion of our CEO’s annual compensation comes from his free cash flow bonus under the Pre-IPO Plan, which for fiscal year 2020 was $8,225,000;
|
•
|
As described above, we paid cash dividends to all stockholders of record and participants of the Pre-IPO Plan on October 4, 2019, January 17, 2020, April 17, 2020 and September 1, 2020. As a result, our CEO was paid $6,749,945 in fiscal year 2020 in respect of his deferred equity units and Profits Interests;
|
•
|
As described above, in December 2019, a portion of Mr. Cooper’s deferred equity units and special deferred equity units were settled into shares of our common stock (which were immediately contributed to Management LLC for Class A units of Management LLC).
|
•
|
the requirement that a majority of the members of the board of directors be independent directors;
|
•
|
the requirement that we have a compensation committee that is composed entirely of independent directors;
|
•
|
the requirement that the nominating and corporate governance committee be composed entirely of independent directors; and
|
•
|
the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
|
|
•
|
| |
Take such other actions relating to our compensation and benefits structure as the Compensation Committee deems necessary or appropriate.
|
|
|
|
| |
|
|
|
Role in Risk Oversight
|
| |||
|
|
| |
|
|
|
The Compensation Committee’s role in risk oversight includes oversight of compensation and other related matters.
|
| |||
|
|
| |
|
|
|
Executive Committee
|
| |||
|
|
| |
|
|
|
Members:
|
| |||
|
Michael Lynton (chair)
|
| |||
|
Len Blavatnik
|
| |||
|
Lincoln Benet
|
| |||
|
Donald A. Wagner
|
| |||
|
|
| |
|
|
|
Number of Meetings in fiscal year 2020: 0
|
| |||
|
|
| |
|
|
|
Key Roles and Responsibilities
|
| |||
|
|
| |
|
|
|
•
|
| |
Exercise the authority of the Board in oversight of the Company between meetings of the Board to the fullest extent permitted by applicable law.
|
|
|
|
| |
|
|
|
Finance Committee
|
| |||
|
|
| |
|
|
|
Members:
|
| |||
|
Donald A. Wagner (chair)
|
| |||
|
Alex Blavatnik
|
| |||
|
Lincoln Benet
|
| |||
|
Stephen Cooper
|
| |||
|
|
| |
|
|
|
Number of Meetings in fiscal year 2020: 1
|
| |||
|
|
| |
|
|
|
Key Roles and Responsibilities
|
| |||
|
|
| |
|
|
|
•
|
| |
Assist the Board in fulfilling its oversight of management’s responsibilities with respect to financial matters and the Company’s capital structure, including declaration of dividends and strategies that bear upon our long-term financial sustainability
|
|
|
|
| |
|
|
|
Role in Risk Oversight
|
| |||
|
|
| |
|
|
|
The Finance Committee oversees risks related to liquidity and capital management.
|
| |||
|
|
| |
|
|
|
Nominating and Corporate Governance Committee
|
| |||
|
|
| |
|
|
|
Members:
|
| |||
|
Lincoln Benet (chair)
|
| |||
|
Len Blavatnik
|
| |||
|
Noreena Hertz
|
| |||
|
Donald A. Wagner
|
| |||
|
|
| |
|
|
Name
|
| |
Age
|
| |
Position
|
Stephen Cooper
|
| |
74
|
| |
Chief Executive Officer
|
Max Lousada
|
| |
47
|
| |
Chief Executive Officer, Recorded Music
|
Eric Levin
|
| |
58
|
| |
Executive Vice President and Chief Financial Officer
|
Carianne Marshall
|
| |
43
|
| |
Co-Chair and Chief Operating Officer, Warner Chappell Music
|
Guy Moot
|
| |
55
|
| |
Co-Chair and Chief Executive Officer, Warner Chappell Music
|
Maria Osherova
|
| |
55
|
| |
Executive Vice President and Chief People Officer
|
Paul M. Robinson
|
| |
62
|
| |
Executive Vice President and General Counsel and Secretary
|
Oana Ruxandra
|
| |
39
|
| |
Executive Vice President of Business Development and Chief Digital Officer
|
James Steven
|
| |
43
|
| |
Executive Vice President, Chief Communications Officer
|
•
|
all directors comprising the Board at such time as long as Access holds at least 50% of the total combined voting power of our outstanding common stock;
|
•
|
at least 40% of the total number of directors comprising the Board at such time as long as Access holds at least 40% but less than 50% of the total combined voting power of our outstanding common stock;
|
•
|
at least 30% of the total number of directors comprising the Board at such time as long as Access holds at least 30% but less than 40% of the total combined voting power of our outstanding common stock;
|
•
|
at least 20% of the total number of directors comprising the Board at such time as long as Access holds at least 20% but less than 30% of the total combined voting power of our outstanding common stock; and
|
•
|
at least 10% of the total number of directors comprising the Board at such time as long as Access holds at least 10% but less than 20% of the total combined voting power of our outstanding common stock.
|
•
|
any merger, consolidation or similar transaction (or any amendment to or termination of an agreement to enter into such a transaction) with or into any other person whether in a single transaction or a series of transactions, other than any acquisition or disposition involving consideration less than $25 million;
|
•
|
any acquisition or disposition of securities, assets or liabilities involving consideration or book value greater than $25 million;
|
•
|
any change in our authorized capital stock or the creation of any new class or series of our capital stock;
|
•
|
any issuance or acquisition of capital stock (including stock buy-backs, redemptions or other reductions of capital), or securities convertible into or exchangeable or exercisable for capital stock or equity-linked securities, except (i) issuances of equity awards to directors or employees pursuant to an equity compensation plan approved by the Board; (ii) issuances or acquisitions of capital stock of one of our subsidiaries to or by one of our wholly owned subsidiaries; and (iii) issuances or acquisitions of capital stock that the Board determines are necessary to maintain compliance with covenants contained in any debt instrument;
|
•
|
any issuance or acquisition (including redemptions, prepayments, open market or negotiated repurchases or other transactions reducing the outstanding debt of the Company or any subsidiary) of debt securities to or from a third party involving an aggregate principal amount exceeding $25 million;
|
•
|
any other incurrence of a debt obligation to or from a third party having a principal amount greater than $25 million;
|
•
|
entry into or termination of any joint venture or similar business alliance having a value exceeding $25 million;
|
•
|
listing or delisting of any securities on a securities exchange, other than the listing or delisting of debt securities on Nasdaq or any other securities exchange located solely in the United States;
|
•
|
(i) any action to increase or decrease the size of the Board; (ii) the formation of, or delegation of authority to, any new committee, or subcommittee thereof, of the Board; (iii) the delegation of authority to any existing committee or subcommittee thereof not set forth in the committee’s charter or authorized by the Board; or (iv) any amendments to the charter (or equivalent authorizing document) of any committee, including any action to increase or decrease size of any committee (whether by amendment or otherwise), except in each case as required by applicable law;
|
•
|
any amendment (or approval or recommendation of any amendment) to our certificate of incorporation or by-laws;
|
•
|
any filing or petition under bankruptcy laws, admission of insolvency or similar actions by us or any of our subsidiaries, or our dissolution or winding-up;
|
•
|
the election, appointment, hiring, dismissal or removal of the Company’s chief executive officer, chief financial officer or general counsel;
|
•
|
any material change in a significant accounting policy of the Company and any termination or change of the Company’s independent auditor;
|
•
|
settlement of any litigation to which the Company or any of its subsidiaries is a party involving the payment by the Company or any of its subsidiaries of an amount equal to or greater than $15 million; or
|
•
|
the creation or amendment of any stock option, employee stock purchase or similar equity-based plan for management or employees, or any increase in the number of Shares of common stock reserved under such plan.
|
•
|
this Proxy Statement;
|
•
|
a notice of our 2021 Annual Meeting of Stockholders (which is attached to this Proxy Statement); and
|
•
|
the Annual Report to Stockholders for 2020.
|
|
| |
Internet
Please log on to www.proxyvote.com and vote by 11:59 p.m., Eastern Time, on March 1, 2021.
|
|
| |
|
|
| |
Telephone
Please call the number on your proxy card until 11:59 p.m., Eastern Time, on March 1, 2021.
|
|
| |
|
|
| |
Mail
If you received printed copies of the proxy materials, please complete, sign and return your proxy card by mail to Vote Processing c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717 so that it is received by the Company prior to the Annual Meeting.
|
|
| |
|
|
| |
In Person
You may attend the virtual Annual Meeting and cast your vote.
|
•
|
risks related to the effects of natural or man-made disasters, including pandemics such as COVID-19;
|
•
|
our ability to identify, sign and retain recording artists and songwriters and the existence or absence of superstar releases;
|
•
|
our inability to compete successfully in the highly competitive markets in which we operate;
|
•
|
the ability to further develop a successful business model applicable to a digital environment and to enter into artist services and expanded-rights deals with recording artists in order to broaden our revenue streams in growing segments of the music entertainment business;
|
•
|
the popular demand for particular recording artists and/or songwriters and music and the timely delivery to us of music by major recording artists and/or songwriters;
|
•
|
the diversity and quality of our recording artists, songwriters and releases;
|
•
|
slower growth in streaming adoption and revenue;
|
•
|
our dependence on a limited number of digital music services for the online distribution and marketing of our music and their ability to significantly influence the pricing structure for online music stores;
|
•
|
trends, developments or other events in some foreign countries in which we operate;
|
•
|
risks associated with our non-U.S. operations, including limited legal protections of our intellectual property rights and restrictions on the repatriation of capital;
|
•
|
unfavorable currency exchange rate fluctuations;
|
•
|
the impact of heightened and intensive competition in the recorded music and music publishing industries and our inability to execute our business strategy;
|
•
|
significant fluctuations in our operations, cash flows and the trading price of our common stock from period to period;
|
•
|
our failure to attract and retain our executive officers and other key personnel;
|
•
|
a significant portion of our revenues are subject to rate regulation either by government entities or by local third-party collecting societies throughout the world and rates on other income streams may be set by governmental proceedings, which may limit our profitability;
|
•
|
risks associated with obtaining, maintaining, protecting and enforcing our intellectual property rights;
|
•
|
our involvement in intellectual property litigation;
|
•
|
threats to our business associated with digital piracy, including organized industrial piracy;
|
•
|
an impairment in the carrying value of goodwill or other intangible and long-lived assets;
|
•
|
our failure to have full control and ability to direct the operations we conduct through joint ventures;
|
•
|
the impact of, and risks inherent in, acquisitions or other business combinations;
|
•
|
risks inherent to our outsourcing certain finance and accounting functions;
|
•
|
the fact that we have engaged in substantial restructuring activities in the past, and may need to implement further restructurings in the future and our restructuring efforts may not be successful or generate expected cost savings;
|
•
|
our ability to maintain the security of information relating to our customers, employees and vendors and our music;
|
•
|
risks related to evolving laws and regulations concerning data privacy which might result in increased regulation and different industry standards;
|
•
|
legislation limiting the terms by which an individual can be bound under a “personal services” contract;
|
•
|
a potential loss of catalog if it is determined that recording artists have a right to recapture U.S. rights in their recordings under the U.S. Copyright Act;
|
•
|
potential employment and withholding liabilities if our recording artists and songwriters are characterized as employees;
|
•
|
any delays and difficulties in satisfying obligations incident to being a public company;
|
•
|
the impact of our substantial leverage on our ability to raise additional capital to fund our operations, on our ability to react to changes in the economy or our industry and on our ability to meet our obligations under our indebtedness;
|
•
|
the ability to generate sufficient cash to service all of our indebtedness, and the risk that we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful;
|
•
|
the fact that our debt agreements contain restrictions that limit our flexibility in operating our business;
|
•
|
the significant amount of cash required to service our indebtedness and the ability to generate cash or refinance indebtedness as it becomes due depends on many factors, some of which are beyond our control;
|
•
|
our indebtedness levels, and the fact that we may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness;
|
•
|
risks of downgrade, suspension or withdrawal of the rating assigned by a rating agency to us could impact our cost of capital; and
|
•
|
the dual class structure of our common stock and Access’s existing ownership of our Class B Common Stock have the effect of concentrating control over our management and affairs and over matters requiring stockholder approval with Access.
|
WARNER MUSIC GROUP CORP.
|
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/WMG2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
D29848-P48006 | KEEP THIS PORTION FOR YOUR RECORDS | |
DETACH AND RETURN THIS PORTION ONLY | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
WARNER MUSIC GROUP CORP. | |||||
The Company’s Board of Directors (“Board”) recommends that you vote “FOR” the election of each of the nominees named in Proposal 1 of the accompanying Proxy Statement, “FOR” each of Proposals 2 and 3, and for a frequency of “THREE YEARS” for future advisory votes to approve compensation paid to the Company’s named executive officers in Proposal 4. Information about the matters to be acted upon at the Annual Meeting is contained in the accompanying Proxy Statement. | |||||
1. | Election of eleven directors for a one-year term ending at the 2022 Annual Meeting of Stockholders; | ||||
Nominees: | For | Against | Abstain | ||
1a. | Stephen Cooper | ☐ | ☐ | ☐ | |
1b. | Lincoln Benet | ☐ | ☐ | ☐ | |
1c. | Alex Blavatnik | ☐ | ☐ | ☐ | |
1d. | Len Blavatnik | ☐ | ☐ | ☐ | |
1e. | Mathias Döpfner | ☐ | ☐ | ☐ | |
1f. | Noreena Hertz | ☐ | ☐ | ☐ | |
1g. | Ynon Kreiz | ☐ | ☐ | ☐ | |
1h. | Ceci Kurzman | ☐ | ☐ | ☐ |
|
||||
For | Against | Abstain | ||
1i. Thomas H. Lee | ☐ | ☐ | ☐ | |
1j. Michael Lynton | ☐ | ☐ | ☐ | |
1k. Donald A. Wagner | ☐ | ☐ | ☐ | |
2. | Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal year 2021; | ☐ | ☐ | ☐ |
3. | Advisory vote to approve the compensation paid to the Company’s named executive officers; | ☐ | ☐ | ☐ |
1 Year | 2 Years | 3 Years |
Abstain
|
||
4. | Advisory vote on the frequency of future advisory votes to approve the compensation paid to the Company’s named executive officers; and | ☐ | ☐ | ☐ | ☐ |
Note: The undersigned also authorizes the named proxies to vote in their discretion upon such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. | |||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Signature [PLEASE SIGN WITHIN BOX] | Date |
Signature (Joint Owners) |
Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and Annual Report are available at www.proxyvote.com.
D29849-P48006
WARNER MUSIC GROUP CORP.
Annual Meeting of Stockholders
This proxy is solicited by the Board of Directors
|
||||||||
The stockholder(s) hereby appoint(s) Trent Tappe and Paul Robinson, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Class A Common Stock and/or Class B Common Stock of WARNER MUSIC GROUP CORP. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 AM, Eastern Time on March 2, 2021, virtually at www.virtualshareholdermeeting.com/WMG2021, and any adjournment or postponement thereof.
|
||||||||
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted “FOR” the election of each of the nominees named in Proposal 1, “FOR” each of Proposals 2 and 3, for a frequency of “THREE YEARS” for future advisory votes to approve compensation paid to the Company’s named executive officers in Proposal 4, and in the discretion of the proxies named above on any other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
||||||||
Continued and to be signed on reverse side | ||||||||