Newly ensconced Sony/ATV Music Publishing chairman/CEO Jon Platt announced in an email to staff on Wednesday (April 4) that employees will receive a “special recognition bonus” to celebrate the company’s purchase of the remaining 70.01 percent of EMI Music Publishing back, cementing the publisher’s No. 1 position in the market.
The decision is likely a move to quell unrest over the $190 million in bonuses paid out to former chairman/CEO Martin Bandier and his Sony/ATV management team.
Noting that the acquisition of the majority stake of EMI Music Publishing from the other joint venture partners had solidified Sony/ATV’s role as an industry leader, that email, obtained by Billboard, says, “It’s become apparent to me … just how well the entire Sony/ATV team performed in contributing to the success of EMI — from Sony’s first investment in 2012 through the full acquisition of EMI last November.”
Platt continued, “I believe it’s very important, and senior management in Tokyo agrees, that all Sony/ATV employees should be rewarded for their contribution. As a result, I’ve decided, with support from Tokyo, to grant a special one-time supplemental bonus to each member of the Sony/ATV team in recognition of this achievement.”
Platt said he would share further details about the “EMI special recognition bonus” in the coming weeks. News of Platt’s email was first reported by Music Business Worldwide. Sony declined to comment.
Bandier and some 15-20 members of his management team shared in the $190 million bonus plan, which was agreed upon at the time that the joint-venture partners first bought EMI Music Publishing back in July 2012. The stock bonus plan was part of a series of moves negotiated into the deal to ensure Sony/ATV — which would serve as administrator for EMI Music Publishing — didn’t favor the Sony/ATV song catalog over the EMI music publishing catalog. At the behest of co-investor Mubadala and its partners, Sony agreed to a bonus plan for the Sony/ATV senior management to incentivize them to give equitable treatment to both catalogs.
In another move to ensure equitable treatment, Sony agreed to give the EMI owners the option to participate in all new songwriter signings once the deal closed. According to sources, EMI exercised that option in every instance, which helped to increase the value of the EMI catalog.
Thanks to those moves and the industry’s comeback as streaming took off, music publishing valuations enjoyed a renaissance, with the net publishers’ share multiple growing from about 12 times in 2012 to a range of 15-18 times by the time the EMI buyout was completed. As it was, EMI appreciated from $2.2 billion to $4.75 billion in the six years it was owned by Sony, Mubadala and other joint venture partners.
Consequently, the Sony/ATV management team was rewarded with a $190 million payout (first reported by Billboard), of which half went to Bandier while the other $95 million was to be split among the other 15-20 members of Sony/ATV’s management team. But that payout reportedly caused strife in the halls of Sony/ATV, as other company staffers didn’t get to share in the stock bonus plan. While Sony never explicitly acknowledged any tension it caused, this new payout to Sony/ATV staff is a smart move, says one observer familiar with the situation, who says, “Hats off to Platt and Sony for announcing it will make a bonus payout.”
Meanwhile, sources say that some of the 10 or so employees who worked at EMI Music Publishing, led by EMI CEO Dave Johnson, also received a bonus payout at the close of the deal, although the undisclosed amount of that bonus came out of Mubadala’s payday from the sale. (Sony had to cover the stock bonus plan for its Sony/ATV executives.) While some of the EMI staffers initially stayed on after the EMI acquisition closed to help the transition, all of the EMI staff’s employment has now ended, sources say.
With Platt’s first day on the job this past Monday, his e-mail about the subsequent bonus payout to other Sony/ATV staffers likely eases the nervousness that all employees feel when a new CEO takes the helm. Platt began his e-mail by noting, “In various meetings and discussions that I’ve had since January, both with Sony/ATV employees and with senior management at Sony Corp in Tokyo, it is clear to me that we have an incredible team.” He ended by saying that because of the staff’s contributions “we have positioned ourselves for continued success. Lets keep it up.”