Warner Music shakes up management

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Warner Music Group Corp., on the heels of three consecutive quarters of overseas revenue growth, today announced a management shake-up that it hopes will streamline its global strategy.

“We can no longer organize the company as simply ‘U.S.’ and ‘non-U.S.’ operations,” said Chairman and Chief Executive Edgar Bronfman Jr. in a statement.

Warner, the sole publicly traded stand-alone music company and home to Kid Rock and My Chemical Romance, will instead divide its work into three regional areas: continental Europe, Asia-Pacific and U.K./Americas.

Newly appointed Vice Chairmen Lyor Cohen and Michael Fleisher will lead the charge. Warner Music International Chairman and Chief Executive Patrick Vien is leaving the company.

Fleisher joined Warner shortly after the company split from Time Warner Inc. in 2004 and helped it go public the following year. He will head global corporate strategy.

Cohen will oversee recorded music operations in Britain and Latin America, in addition to his work running North American operations.

Global Controller Steven Macri was named chief financial officer. Lachie Rutherford and John Reid will continue to run the Asia-Pacific and European sectors, respectively, and Inigo Zabala will report to Cohen and continue to lead Latin American operations.

Warner credits Cohen with revitalizing its U.S. recorded music operations by significantly increasing digital revenue and running major labels Atlantic and Warner Bros. Records. In March, the company doubled his base salary to $3 million. Cohen stirred controversy in August, when he sold nearly a quarter of his stock at a time when the company claimed its shares were undervalued.

“While [Warner] continues to reduce staff and scale back compensation for its employee base, its senior management continues to carry on as if the music industry was in its heyday — this simply cannot help morale at [Warner],” wrote Pali Research analyst Richard Greenfield in an August report (registration required). He didn’t respond to a request for comment.

Warner reported higher revenue and narrowed its losses in its recently concluded fiscal third quarter thanks in part to the strong performance of its international operations. The company recently acquired artist management and tour production companies in Spain, France, Japan and elsewhere, and has expanded its market share since going public.

But the company has also suffered a roughly 70% decline in its stock price over the last two years. And Wedbush Morgan Securities Inc. analyst Chris White sees the changes as mostly cosmetic.

“Warner may shuffle people around, hire new people, let some people go, but it probably has little bearing on the company’s ultimate financial performance in the near term,” he said.

Warner’s stock price declined 1.7% to $7.97.