New York/London – EMI Music Publishing will begin a three-year transition Feb. 1 as it grooms its next chairman/CEO.
Roger Faxon, the chief financial officer at London-based EMI Group PLC, will return to the publishing unit in New York – where he had spent three years as CFO – to become its worldwide president/COO and eventual successor to veteran chairman Martin Bandier.
Bandier will remain the company’s chairman/CEO until April 1, 2006, when the two will share the CEO title. Faxon will become sole CEO April 1, 2007, while Bandier will remain as full-time chairman until March 31, 2008.
After exiting the company, Bandier will remain under a consulting contract for an additional three years.
EMI Group chairman Eric Nicoli dismissed as “nonsense” reports that the succession plan was announced because Bandier, 63, was planning to acquire EMI Music Publishing and was rebuffed.
While he remains at EMI, Bandier said he would not be permitted to make a personal acquisition of outside publishing catalogs. However, he will be free to do so in 2008.
The announcement surprised many in financial circles. “It is not something we anticipated,” London-based UBS analyst Helen Snell said. “But it looks like a good arrangement. It will keep Marty Bandier in the group for some time while Roger Faxon will gradually play an increasing role.”
EMI vies with Warner/Chappell for honors as the industry’s leading publisher, sharing in the copyrights of such recent hits as Santana’s “The Game of Love” and Beyonce Knowles’ “Crazy in Love.” Among its jewels is the Motown catalog.
Although Faxon’s title implies he’s a “numbers guy,” Bandier told Billboard, “He’s more than that and has proven that in the past. He’s managed creative businesses and dealt with creative people and (loves music). He has a sensitivity to the creative process and to the creators.”
Given the challenges that digital music, new technology and copyright licensing and protection present the industry during the next few years, Faxon said he and Bandier would look for new ways to optimize the business to “perform for our writers.”
Bandier noted that as music publishers – who are not reliant upon manufacturing or distribution plants to sell music – they can be flexible in changing the direction of their business based on where opportunities lie.
An EMI spokeswoman said the latest figures from 2004 indicate that the publishing unit had a 25.6% operating profit, the highest of any music publisher. The unit annually contributes about 35% to the overall group’s profit, she added.
Bandier has EMI Group’s most lucrative financial package. According to the company’s 2004 annual report, he was paid a total of 3.3 million pounds ($6.2 million) last year. The base salary of 1.8 million pounds ($3.4 million) was augmented by benefits and incentives worth 1.5 million pounds ($2.7 million). Faxon’s full remuneration as CFO reached 885,000 pounds ($1.7 million).
Nicoli declined to reveal the financial terms of Bandier’s contract renewal. He said they are “appropriate terms that I am comfortable with, and so is the board.”
