"Godrich commented on Spotify's statement, tweeting that because the money is divided up by percentage of total streams, it favors bigger companies with huge back catalogues."
As I understand it, Spotify's system favors companies with the songs people are listening to. If people are listening to the older songs in the back catalog, then the company invested in the right artists. Just because they are older doesn't mean they don't deserve to be paid. Also, (note: I hate to defend large music companies, but I it is what it is) these companies did put a lot of time, money, and effort into creating these catalogs. It wouldn't be fair to the other artist to penalize them just because their song are older, or part of a larger catalog.