Executives get shares worth €23m in Aryzta shake up
Swiss-Irish food firm Aryzta has flagged a major overhaul of its board after a trying year for the company that has seen its share price fall by more than 40pc.
The firm, best known in Ireland for its Cuisine de France brand, also announced that three senior executives were awarded share options worth €23.6m based on the company's share price yesterday.
An Aryzta spokesman said it is hoped that the options will "incentivise" management.
Chairman Denis Lacey will stand for election for the last time at this year's annual general meeting, which is to be held on December 8.
A new chairman will be proposed by the company board at next year's AGM.
Patrick McEniff, who acts as both chief financial and chief operations officer, and the head of the company's American arm, John Yamin, will not stand for re-election to the board.
Non-executive director J Brian Davy, who has also served as deputy chairman of Arnotts, will step down from the board.
He will be replaced by Dan Flinter, the former chief executive of Enterprise Ireland and the former chairman of The Irish Times.
The company will also establish a new "governance and nomination" committee after the upcoming AGM.
Aryzta said that the committee will advise the board on governance matters including "board independence and structure". The firm said the board is now looking to establish "more demonstrably independent governance".
A spokesman for Aryzta said that the board overhaul was not sparked by investor unrest.
"No, there is no particular reason other than the company wants to improve the independence of it [the board]," he said.
"We have an AGM coming up, so now is an opportune time to do that. In Switzerland a board normally doesn't have executives on it, while in the Anglo-Saxon world there is a mix. We are looking to strike a balance. We will look to bring in the best in class."
The company has awarded Mr McEniff and Mr Yamin options on 300,000 shares and 150,000 shares respectively while general secretary Pat Morrisey received 120,000 share options.
The options are worth about €12.4m, €6.2m and €5m respectively based on yesterday's share price. The options will first become accessible in September 2020.
A spokesman for Aryzta said the awards are conditional on the company's performance over the next three financial years. He added: "They are to motivate and incentivise management and improve performance going forward."
Aryzta has struggled over the past year, with the company's share price dropping quickly from €73 in March. It closed at €41.2 on the Irish stock exchange yesterday.
Management came under criticism when it announced the acquisition of a 49pc stake in French retailer Picard for €446.6m. Analysts questioned the move into the frozen food market, which some believe is saturated.
The company has also come under pressure in the US. In the 12 months to the end of July although its European and international operations both saw modest underlying sales growth, underlying revenue at Aryzta's North American arm dropped by 6.2pc.
Chief executive Owen Killian admitted himself that the 2015 financial year had been "disappointing" for the company, which recently revealed in its annual report that the total compensation package of its executive team dropped from over €14.2m in 2014 to €4.8m in 2015.