(Reuters) -Universal Music Group, the label representing Drake and Taylor Swift, on Wednesday posted a significant drop in core profit due to compensation expenses, even as sales edged up in the first quarter.
Core profit (EBITDA) for the first quarter fell 43.4% at constant currency to 261 million euros ($288.07 million), with the metric’s margin also dropping to 10.6% from 20.6% in the same quarter a year earlier.
The drop was due to non-cash, share-based compensation expenses of 261 million euros during the quarter, part of a global equity compensation plan announced in the fourth quarter of last year, UMG said.
UMG’s CEO Lucian Grainge has come under shareholder pressure over an “excessive” $100 million pay deal, The Financial Times reported on Wednesday.
The music label will vote on Grainge’s 2023 pay scheduled at its May 11 annual meeting, a pay package which shareholder advisory services ISS and Glass Lewis warned investors should reject, FT said.
The group nonetheless posted higher first quarter sales, helped by growth in recorded music and music publishing.
Revenue in the first quarter was 2.45 billion euros, up 9.3% at constant currency against the 2.20 billion posted in the same period a year earlier.
Its top sellers included Taylor Swift, King & Prince and Morgan Wallen, the group said.
($1 = 0.9060 euros)
(Reporting by Olivier Sorgho. Editing by Jane Merriman and Josie Kao)
