Glanbia plan for €750,000 chief financial officer retention bonus slammed

Investor advisers ISS and Glass Lewis query proposed payout to Mark Garvey

Glanbia’s plan to award its chief financial officer, Mark Garvey, a stock-based bonus worth €750,000 as an incentive to remain with the company for at least two years has been slammed by big investor advisory firms.

Institutional Shareholder Services (ISS) and Glass Lewis, the world’s two most influential firms that advise investors on corporate governance issues, have each advised shareholders to vote against Glanbia’s remuneration policy at its upcoming annual general meeting (agm) on May 1st.

Say-on-pay votes are typically non-binding, as is the case of this resolution. However, if large blocks of shareholders vote against a remuneration report or policy it is seen as embarrassing for a company and usually trigger engagement with investors to see if concerns can be addressed.

Glanbia said in its annual report it planned to award Mr Garvey, its chief financial officer for more than a decade, some 42,545 shares, to ensure his retention to support the group’s new chief executive Hugh McGuire who took over in January following the retirement of the company’s long-term head, Siobhán Talbot.


The number of shares contained in the planned award equated to his €633,000 basic salary last year, based on the company’s average share price in December of €15.47.

However, Glanbia’s shares have since jumped to €17.61, meaning that the shares are now worth almost €750,000.

The auto-enrolment pension scheme seems good on paper, but how will it actually work?

Listen | 32:34

Mr Garvey’s total remuneration last year amounted to €3.57 million, mainly made up of cash and share bonuses. Ms Talbot’s came to €7.95 million.

“The nature of one-off retention awards is a concern, and the absence of performance conditions a further concern,” said ISS in a report. “Ultimately, as the award is only subject to the CFO’s [chief financial officer’s] continued employment, and, although aligned with share price, lacking performance conditions, it diverges from good market practice. As such, shareholder support is not considered warranted for the remuneration policy.”

Glass Lewis questioned the appropriateness of the bonus, particularly given its size and lack of performance conditions. “As such, we cannot recommend that shareholders support this proposal at this time,” it said.

“It was agreed that it was important to secure the retention of our group chief financial officer to support the continued delivery of our growth strategy, for the benefit of our shareholders,” said a Glanbia spokeswoman. “The CFO retention award is a one-off exceptional award, made in shares and the value is aligned to shareholder experience over both the vesting and holding periods [three years in total].”

The Kilkenny-based nutrition group said in February that its after-tax profits jumped 20 per cent last year to $298.1 million (€280 million) for 2023 as benefited from a “protein mega-trend”.

Glanbia is one of the world’s leading producers of protein powders for gym goers. The company’s leading Optimum Nutrition brand generated $1.1 billion in revenue last year, the latest results show.

The Glanbia Performance Nutrition division generated $1.8 billion in revenue last year on the back of strong-selling brands Optimum Nutrition and Isopure. Its nutritional solutions united delivered just over $1 billion.

However revenues at its US cheese division fell by 13.9 per cent to $2.6 billion, driven by falling prices.

Shares in the group have advanced by 29 per cent over the past 12 months.

Read More