Thanks to increased digital revenues, Warner Music Group was able to give its CEO Edgar Bronfman and his second-in-command Lyor Cohen $3 million bonuses in 2008, according to WMG’s recent proxy filing.
In 2007, when WMG was coming off of a not-terrible-but-not-great year, Edgar chose to forsake his bonus and donate the money to the company bonus pool, and Lyor got a much lower bonus (roughly $1.5 million) than he did this year.
But in 2008, thanks to a 38% increase in digital revenues, WMG’s total earnings were up 3% to $3.5 billion, and Edgar and Lyor got bonuses in the middle range of their contractually allocated amount: $3 million for Edgar and $3.25 million for Lyor.
Still, Warner’s stock is way down from where it was last year. Twelve months ago, WMG was trading at $6.61 a share and now it’s hovering around the $2 range. Granted the economic downturn has been hard on the vast majority of media stocks, and a source close to the situation tells us that there’s a lot of uncertainty around the music industry, which they said makes WMG’s increased digital revenues and improved market share even more impressive.
So why aren’t investors more encouraged by this performance?
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