Dr. Dre has hit a bum note with a man who claims that he was hired by Dre’s Beats Electronics and subsequently stiffed out of millions in compensation.
Dre and Jimmy Iovine’s Beats Electronics is named in a lawsuit filed by David Hyman, the founder of online music subscription service MOG, who says that he was fired before he could receive the benefits of his incentive plan after MOG was purchased in 2012.
According to the lawsuit, Hyman entered into a purchase agreement for MOG in June 2012. Hyman was brought aboard as CEO, and nearly the entire MOG team was brought aboard the company.
The suit claims that, under an incentive plan adopted during Hyman’s tenure, he would be entitled to compensation including 2.5 percent of the company’s “currently outstanding equity interests,” with 1 percent due on the first anniversary of Hyman’s date of employment, and subsequent installments due in subsequent months. The suit also claims that he was promised a grant of 25 percent of the company’s outstanding equity interests following adoption of the incentive plan if the company achieved a fair market value of $500 million or more.
Hyman is seeking compensatory damages “in excess of $20 million,” plus interest.