Grammy in Transition After Greene Resigns

The music industry was abuzz Sunday over the sudden resignation of C. Michael Greene as president of the Grammy organization and about the future direction of the influential industry group.

The controversial Grammy chief abruptly resigned Saturday in an emergency board meeting at the Beverly Hilton Hotel attended by 38 trustees.

The meeting was arranged by Grammy Chairman Garth Fundis to present the findings of a sexual harassment investigation to the group’s board.

On Sunday, the Grammy organization released a statement saying that the investigation had cleared Greene of any wrongdoing and that he would stay on as a consultant during the management transition.

The statement did not explain why Greene resigned from the National Academy of Recording Arts and Sciences, the nonprofit organization that he headed for 13 years.

“We thank Mike for his years of service and the contributions he’s made to the organization and to the music community,” Fundis said.

“I also want to state that a full and fair investigation of alleged misconduct by Mike was completed and it revealed no sexual harassment, no sex discrimination and no hostile work environment at the Recording Academy.”

Greene, 52, had three years left on his employment contract and will be paid as much as $8 million as part of a severance package, sources close to the Grammy negotiations said.

On Sunday, Greene offered no explanation about why he resigned. But he released the following statement: “I am so proud of what we’ve been able to accomplish together over the past 13 years and am gratified by the growth and success of the organization and our mission.... “ he said.

“We have built a spectacular senior management team, and I will work with the senior staff to ensure a seamless, smooth and successful transition.”

Music industry executives traded phone calls Sunday about Greene’s surprise exit--wondering why the Grammy veteran would step down if the report exonerated him.

Meanwhile, senior Grammy executives gathered Sunday for meetings at the Santa Monica-based academy with Fundis and other volunteer trustees for the first in a series of staff evaluations, sources said.

Fundis will serve as interim Grammy chief, but it is unclear who will succeed Greene. Potential candidates were floated among the board--Neil Portnow, a Los Angeles record executive at Jive Records, and Bill Ivey, former Grammy official and head of the National Endowment for Arts under President Clinton, Grammy sources said.

On Sunday several Grammy trustees privately said the board viewed Greene’s resignation as the first step to make the organization more democratic, with a clearer focus on its core mission to serve members of the recording community.

During Greene’s tenure the influence of the Grammy organization grew dramatically, and its awards show became a major television event with a great effect on record sales.

CBS pays the academy more than $20 million a year to broadcast the Grammy Awards.

But Greene also was viewed by many in the music industry as a dominant executive whose influence carried throughout the Grammy organization.

Grammy trustees now intend to take a close look at how the organization’s 120 employees and its $50 million in assets were managed under the Greene regime. Some board members want to bring in an independent analyst to scrutinize how the Grammy organization and its philanthropic arms, MusiCares and the Grammy Foundation, might operate more efficiently and serve the music community more effectively.

On Sunday, some trustees privately questioned whether the academy should continue sinking millions of dollars into projects such as Encore Hall, a Greene-driven proposal to build a retirement home for aging musicians with some government funding. Those trustees believe the funds might be put to better use by exploring other ventures, such as starting a health insurance program for artists and recording technicians.

Some Grammy employees and trustees also believe the nonprofit group could do more to get the word out to indigent musicians about existing academy programs to help them pay for rent, food and clothing and to help with substance abuse problems. Academy funds, they say, also could be used to help artists establish pensions and better contracts with record companies.

Greene was paid $2 million-plus in salary and bonuses each year. But the next president will be paid less and will serve the interests of the board--previously cut out from most policymaking decisions under Greene, Grammy sources said.

In May, the Grammy trustees are scheduled to meet in Hawaii to discuss future plans for the academy.