Investors warned to hold tight at EMI

MUSIC giant EMI warned of faltering profits as investors handed out a rebuke over its pay policies. The company said conditions were 'extremely challenging' and a sharp fall in the Japanese market would hit first-half profits.

Chairman Eric Nicoli delivered news of the setback at the annual general meeting as investors fretted over falling music sales and increased piracy. The prospects of a merger between two of its keenest rivals have also unsettled the shares.

EMI is standing by full-year profit expectations despite current difficulties. Simon Baker at SG Securities said: 'The first quarter was not as bad as it could have been, thanks to the US, where it looks as if Radiohead, Norah Jones and Coldplay have held them up.'

About 18% of investors voted against a new executive share scheme and 15% opposed the pay report. The backlash could have been worse.

However, Nicoli and finance boss Roger Faxon have waived rights to a two-year pay-off, which helped defuse any row.