Live Nation Entertainment Inc. has been hit with a putative class action in New York federal court. The class action claims that the entertainment company falsely inflated its operating income in 2017 to trigger $10.8 million in bonuses and stock awards for top executives.
Investor Shiva Stein alleges that the company’s 2018 proxy statement reports a misleading adjusted operating income that is short of what was required to trigger millions of dollars in bonuses that were paid to Live Nation’s executives.
The bonuses and stock awards in question were contingent on the company achieving at least 90 percent of its adjusted operating income of $700 million. According to the suit, that number would be $630 million but the report states the adjusted operating income at only $625 million.
In the Live Nation class action filings, the proxy report indicates that Live Nation surpassed the 90 percent goal, without explicitly stating numbers, instead referring to the company’s 10-K report that notes the 2017 adjusted operating income for Live Nation was $625 million.
As a result, the Live Nation class action suit claims that executives received bonuses and stock awards based on a false operating income number. The report shows executives received $9.6 million in bonuses and $1.245 million in stock awards.
Suit Asks Executives to Forfeit Money
The suit seeks to block an upcoming shareholder vote on the proxy statement and asks the court to order executives who received the bonuses and stock awards to forfeit the money.
The class action follows another recent putative class action against the entertainment company. That suit alleges that Live Nation, alongside Ticketmaster, failed to tell shareholders that the company may have violated a consent decree with the U.S. Department of Justice.
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