Aryzta chief Killian got €7m package as bonus kicked in
Published 05/10/2011 | 05:00
THE head of the Irish-led bakery giant Aryzta got a package worth nearly €7m last year in salary and shares.
Owen Killian made 8.57m Swiss francs (€6.98m) during the year ended July 31, making him one of the highest paid chief executives in Irish corporate history. In 2010, he earned less than €2m (CHF 2.5m).
The bulk of his 350pc pay increase came from a bonus related to earnings targets, known as Long Term Incentive Programmes (LTIPs), which had been met last year. His basic salary of CHF1.3m, benefits in kind and pension contributions all were unchanged.
Aryzta was created by the merger of the Irish Agriculture Wholesale Society (IAWS) and Swiss firm Heistand -- hence the reason he is paid in Swiss francs.
While the firm is based in Zurich, most of its leadership are holdovers from IAWS, including chief financial officer Patrick McEniff. In Ireland it is best known as the parent of Cuisine de France.
The LTIP that sparked the massive payout was based on the firm doubling its earnings base within five years, with 50pc of growth coming organically.
Now, that scheme has been replaced with a new LTIP based on return on investment and growth targets that must be achieved entirely through organic growth.
The size of the payout is likely to raise questions from shareholders, especially at a time when executive pay here is under scrutiny. The new LTIP was agreed in consultation with institutional investors.
Last night, a spokesman for the company defended the payment at a time when the world economy is still struggling badly, citing a €1bn rise in shareholder value since 2008.
The company's dividend has been rising in line with annual profits, he added, while the company would stage a non-binding shareholder vote on executive pay going forward.
While the salary will raise eyebrows, Aryzta has performed solidly for a number of years.
Last week, the company reported annual profits of €228m -- up 35pc year on year -- on revenue of €3.87bn.
The company has managed to achieve 15pc compound annual growth in earnings per share in the three years since September 2008. It now has a market capitalisation of CHF3.3bn.
Mr Killian joined Aryzta in 1977 and was a protege of the former head of IAWS, Philip Lynch, before taking in 2003. Mr Lynch himself was ousted from his role as head of investment group One51 earlier this year, in part because of what was perceived as an excessive €1.4m pay packet.
The Roscommon native gives few public interviews but has shown himself to be more than willing to spend big when the time comes. Last year the company forked out nearly €350m on a Canadian bakery and another €830m on acquisitions in the United States. Aryzta recently completed a €91m deal for the British baker Honeytop.
Mr Killian's pay dwarfs the 2007 package of then Anglo Irish Bank chief executive David Drumm, who was the highest paid Irish CEO that year when he earned €4.65m.
It is a long way off the earnings of Tullow Oil chief executive Aidan Heavey, however, who gained some €34m in 2009, although much of this was through share dealings.
Yesterday, Aryzta closed in Dublin little changed at €33.45.