EMI cuts severance plans for FD
Music group EMI has decided to drastically reduce the severance terms for its finance director and chairman, in the event of a merger or takeover, following investor pressure.
The world’s third biggest music group will replace two-year pay-off deals to Roger Faxon, its finance director and Eric Nicholi, its chairman, with one-year schemes, the FT reported.
Th new terms come into affect in April 2004 and follows increasing investor group lobbying efforts against fat cat payoffs to executives, especially when the companies they run perform badly.
EMI’s share price has tumbled from a 12-month high of 342p to 99.5p.
The severance terms would be activated if Warner or BMG, believed to be the two interested parties, gained 51% of the enlarged group.
Faxon was paid £103,400 last year, a relatively small salary, while Nicoli received £685,500.