Convenience food group Greencore, which is currently seeking to raise money from shareholders to help fund a $745.5 million (€694.8 million) acquisition, also plans to ask investors to sanction a hike to maximum long-term share incentives for chief executive officer Patrick Coveney.
The company’s annual report, published on Monday, showed Mr Coveney’s remuneration fell by a third to £2.52 million (€3 million) in the year to September as awards under a long-term incentive scheme dropped.
However, the report also outlined plans to double the maximum that can be granted to the chief executive under a so-called performance share plan, to 200 per cent of salary.
Mr Coveney’s base salary for the current year has been increased by 2 per cent to €803,637.
Greencore also proposes the maximum award to its chief financial officer be raised to 150 per cent of salary from its current 100 per cent. Eoin Tonge succeeded Alan Williams as CFO in October after the latter quit to join UK builders' merchant Travis Perkins in a similar role.
Calibre
The chairman of Greencore’s remuneration committee,
Eric Nicoli
, said: “The committee has been concerned for some time that our incentive opportunities have been below market, and not at the appropriate level to reflect the calibre and performance of our executive directors.”
Mr Nicoli said the proposal for the CEO “is around the medium for FTSE companies ranked between 150 and 250”.
The awards, based on targets for earnings and return on invested capital, usually vest based on performance over three years. To make the new plan more palatable to shareholders, the remuneration committee also plans to introduce an additional two-year holding period before the shares are handed over to the executives.
“It is the committee’s view that incentivising the current senior management team, particularly the CEO, to deliver our strategy and pursue growth opportunities is of the utmost importance,” Mr Nicoli said.
Rights issue
Shareholders will get a chance to vote on the proposal at Greencore's annual general meeting on January 31st. Before that, investors are set to convene this Wednesday to vote on the group's plan to sell £439.4 million shares to existing investors, in what is known as a rights issue, to help fund its purchase of Illinois-based convenience food company Peacock Foods, which generated about $1 billion of sales in the year to September.
The deal would more than quadruple Greencore’s total sales in the US. Shares in Greencore were hit in July when the company reported that sales had slowed in its fiscal third quarter in the US as the operation there continued to post what executives called a “lumpy” performance.
The Peacock deal would help expand the group’s US customer base, which up until now has been hugely dependent on Starbucks and convenience store 7-Eleven.
