Shiva Stein, the shareholder who filed a complaint against Live Nation for allegedly delivering bonuses that were not due on Wednesday, has withdrawn the lawsuit.
“We are pleased that the Plaintiff withdrew her frivolous lawsuit against Live Nation,” said the company in a statement. “The Plaintiff and her attorneys wrongfully accused Live Nation of not meeting performance targets tied to executive compensation when in point of fact, Live Nation is fully transparent on our pay practices, and payment of executive bonuses was fully in line with those practices which are clearly laid out in our 10-K and Proxy.”
On May 23, 2018 Stein filed a complaint in Eastern District of New York seeking an injunction to postpone a Live Nation shareholder vote scheduled for June 6, 2018. Stein’s complaint suggested that the over $9 million in cash bonuses that were paid out to top executives including CEO Michael Rapino were not deserved based on their performance.
The suit also named Independent Directors Robert Ted Enloe II and Mark S. Shapiro, are members of Live Nation’s Compensation Committee as defendants.
Billboard reached out to officials with Live Nation, who said on Thursday (May 24) “This is a frivolous lawsuit. We are fully transparent on our pay practices, and payment of the bonuses was fully in line with those practices which are clearly laid out in our 10-K and Proxy.”
The disagreement stemmed from Live Nation’s 2018 proxy statement which stated that top executives were paid 100 percent of the recommended bonuses for reaching the target AOI of $700 million. The concert giant’s 2017 Form-10 K notes that the company’s AOI was $625 million which is less than the 90 percent of the goal ($630 million) that the company needed to reach to trigger the bonuses.
Representatives for Live Nation pointed out that the suit neglected to factor in the how AOI is calculated for bonuses and note that page 34 of the company’s proxy statement explains that calculations for “AOI for bonus is on a pro forma, constant-currency basis, adjusted for legal settlements,” meaning achievement targets are based on what the AOI the company brought in without subtracting legal payouts.
Based on that math, Live Nation’s 2017 year-end results saw an AOI of $617.2 million on a constant currency basis. When the $110 million paid for Songkick in a legal settlement is added back to the 2017 AOI, Live Nation reached a $727.2 million AOI for 2017. That number adjusted for legal settlements is 103.9 percent of the achievement target.
Stein’s motion to dismiss the case effectively ends the lawsuit as of Friday, May 25, 2018.