Tags: Smithfield | China | sale | bonuses

Smithfield Officers May Get $24 Million in Retention Bonuses

Tuesday, 04 Jun 2013 11:49 AM

Smithfield Foods Inc.’s chief executive officer and five other senior executives may get paid $23.9 million in retention bonuses following the company’s acquisition by Shuanghui International Holdings Ltd.

CEO C. Larry Pope will get $8.3 million in four installments, the Smithfield, Virginia-based company said in a filing. Pope and the other five executives will get their final payments on the third anniversary of the completion of the takeover, provided they are still employed at Smithfield, according to the filing.

Smithfield’s senior managers, among the best-paid in their industry, will stay on after the $4.7 billion takeover, the company said March 29 when it announced the deal. That’s despite Smithfield posting a negative return of 18 percent in the five years through March 28, the second-worst performance of any U.S. food company with annual sales of $10 billion or more, according to data compiled by Bloomberg. Grain and sugar trader Bunge Ltd. was the worst in the period.

In addition, Smithfield’s top five executives are set to get at least $85.4 million in total payout from stocks and share options they hold, according to data compiled by Bloomberg.

The deal to buy the world’s largest hog and pork producer is the biggest Chinese purchase of a U.S. company and is expected to close this year, Hong Kong-based Shuanghui and Smithfield said May 29.

Chinese Demand

Shuanghui International, a holding company that counts CDH Investments Fund Management Co., Goldman Sachs Group Inc., New Horizon Capital, Kerry Group Plc and Temasek Holdings Pte. among its shareholders, is buying Smithfield as a growing middle class in China boosts pork consumption.

Smithfield had been under pressure from one of its biggest shareholders for lagging behind competitors Hormel Foods Corp. and Tyson Foods Inc. Continental Grain Co., which sold its 8.1 million shares after the deal was announced last month, said in March that Smithfield should appoint new managers and break itself into three businesses as rising animal-feed costs made its hog-production unit unprofitable.

Smithfield rose 0.2 percent to $33.05 at 10:20 a.m. in New York. The shares are up 53 percent this year.

© Copyright 2017 Bloomberg News. All rights reserved.

 
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Smithfield Foods Inc.'s chief executive officer and five other senior executives may get paid $23.9 million in retention bonuses following the company's acquisition by Shuanghui International Holdings Ltd.
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Tuesday, 04 Jun 2013 11:49 AM
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