The chief executive and chairman of the board are trading hats in a shake-up at Sony BMG Music Entertainment, following a scandal plagued 12 months.
Rolf Schmidt-Holtz, who had been chairman, is replacing CEO Andrew Lack, who becomes chairman of the board. The swap, announced Friday and effective immediately, follows months of criticism of Lack’s tenure as CEO, including investor discontent over spiraling fees paid to artists and a scandal over copy protection software in Sony CDs.
The unit was formed after Sony Music Entertainment and BMG, the music unit of Guetersloh, Germany-based Bertelsmann, formally combined their businesses. Sony and Bertelsmann each own half of the company.
Following the change, Schmidt-Holtz will assume overall management responsibility, while Lack “will lead the company’s public policy and industry initiatives, and assume operating responsibility and oversight for the theatrical film business of Sony BMG,” a joint statement said.
“I am extremely pleased to take on this new leadership role with the company and to continue to help Sony BMG accelerate its tremendous growth and performance,” Lack said. “Rolf and I are fortunate to have a roster of extraordinary artists and a top-notch team of creative executives around the world.”
The company operates several labels, including Columbia, RCA, Jive and LaFace, and its artist roster features Aerosmith, Jessica Simpson and Alicia Keys, among others. Schmidt-Holtz was BMG’s chief executive from 2001 until the merger in mid-2004 and has been chairman of the merged company’s board since then. He will relocate to New York and will take up oversight of Sony BMG’s theatrical film business.
Because of the swap, he resigned from Bertelsmann’s executive board, the company said.
“With this management change Rolf and Andy are now aligned in positions that will take advantage of the significant progress the company has already made, as well as their formidable business skills and respective management experiences,” Sony Chairman and CEO Howard Stringer said.
Bertelsmann CEO Gunter Thielen said Schmidt-Holtz “has impressively proven his flair for the creative and economic aspects of success in the music business