In a stock exchange notice on Thursday (28 September), SONG said Sutch, who has served as chair since the trust's launch in June 2018, will step down once a suitable replacement is found, or by its 2024 annual general meeting.
Hipgnosis said it would begin the recruitment process for a new chair immediately.
Hipgnosis Songs music catalogue sale comes under scrutiny as continuation vote looms
Fellow board member Andrew Wilkinson and chair of the firm's audit and risk management committee is set to retire before the end of this year.
The board said it would appoint Cindy Rampersaud, who joined the board as an independent non-executive director on 1 August, to succeed Wilkinson on the risk management committee.
Updates to investment advisory agreement
In Thursday's statement, the board also outlined further changes to its investment advisory agreement, following the sale of a fifth of its music catalogue for $465m earlier this month.
The board said the latest changes "will provide shareholders with greater opportunities to realise value in a shorter timeframe should the share price re-rating not occur", as its continuation vote looms.
Shareholders are set to vote on the future of the trust at the annual general meeting on 26 October.
Hipgnosis agrees $465m catalogue sale from public trust to private Blackstone vehicle
If the continuation vote passes, the board said it would schedule regular continuation resolutions to shareholders, starting at an EGM in January 2026, again at the 2028 annual general and at every third AGM thereafter.
Additionally, the board said its investment adviser had agreed to "certain further amendments to the investment advisory agreement", which would make it "terminable by the company on 12 months' notice".
The board added that if the trust's share price stands at an average discount to net asset value of 10% or more, measured on average over the month of January 2025 , it will serve notice to terminate the investment advisory agreement.
"The board may withdraw the notice before the effective date of termination if it considers it to be in the interests of shareholders to do so," it said.
'Credible' third party offers
In the release, Hipgnosis also said it had received "credible" offers relating to the sale of a fifth of its music catalogue from third parties, and confirmed it was engaged in a 'Go-Shop process' with several groups.
This means that if a higher offer is made for the catalogue than the current price, then existing buyer Blackstone has the right to review the deal and, if it matches the "superior proposal" within the window, it will supersede the third party's offer with no subsequent deals reviewed.
This would push back both the annual general meeting and extraordinary general meeting by a month to late November.
If Blackstone does not exercise its "matching right" within the offer period, the existing deal will be terminated in favour of the higher offer from the new party, which would also trigger a delay to the AGM and EGM.
The Go-Shop period closes at 11:59pm on 23 October 2023.
'We think the deal is dead'
The outstanding multi-million dollar agreement with Blackstone has faced fresh scrutiny from analysts, after today's circular came a day later than expected.
Sachin Saggar, analyst at Stifel, said in a note: "For all intents and purposes, we think the deal is dead, and it is just a matter of whether the board accept this, or forces an unnecessary vote."
He added that shareholders were "deeply unhappy and minded to vote against" the continuation vote, adding it was an "unfortunate" outcome, as there had been a period when he expected clients would have accepted "a sensible proposal".
"In fact, that was our base expectation," he wrote.
"Mending bridges with shareholders also appears a tall task, and it is not clear how this can be done given what appears to be low levels of trust. In our view, the best path forward would be a full refresh of the board, to put the fund on a stable footing."
Saggar argued this did not categorise the wider sentiment of the music and royalties sector, which "appears strong".
"There is considerable value to be realised over time if this can be managed in a sensible way," he said.