Aryzta reins in executive pay before annual meeting
Embattled Swiss-Irish baked goods group Aryzta has reined in pay awards for its senior executives as it continues to restructure the business.
It also said Juergen Steinemann, a director of German retail giant Metro, will not be putting himself forward to election to its board "at this time".
Mr Steinemann was set to join the board next month following the group's annual general meeting.
But he has become embroiled in a probe by German prosecutors into suspected insider trading at Metro.
Newly-appointed Aryzta chief executive Kevin Toland, who was formerly CEO of the DAA, will earn a base salary of €858,000.
That's compared to the €1.1m that was payable to ex-Aryzta boss Owen Killian in the last financial year, the baked goods firm confirmed yesterday in a circular to shareholders in advance of the AGM.
The maximum potential bonus for Mr Toland, a former senior Glanbia executive, is capped at 150pc of salary, and based on the performance of earnings before interest, tax, depreciation and amortisation (EBITDA), and net debt to EBITDA.
Additionally, he can receive long-term incentives in the form of performance shares and share options. Those awards are capped at 200pc of his salary. The LTIP awards for Mr Toland are assessed on three criteria with equal weighting: cash flow; return on invested capital; and strategic measures.
Mr Toland started his job at Aryzta in September.
"We have made significant progress in establishing a new senior leadership team with the requisite skills to stabilise the business and return Aryzta performance and growth," the company told shareholders yesterday. "A central part of that aim is ensuring the incentive arrangements are aligned with our refocused strategy and our shareholders' interests."
Aryzta said the maximum amount of remuneration for executive officers in the 2019 financial year under the new pay structures would be 21m Swiss francs (€18.1m), compared to just over 15m Swiss francs (€13m) in the current financial year.
But the proposed maximum aggregate remuneration for the 2019 financial year covers 10 executives, while the current financial year's maximum aggregate was designed in 2016 for just four executives.
Aryzta chairman Gary McGann acknowledged yesterday that the group had made one-off payments to executive management members during 2017 to protect its talent pool .
"Given the extent of management change during the year - the departure of the CEO, CFO and CEO Americas - and the risk of further upheaval from consequent flight risk, payments of 50pc of base salary were awarded to the executive management team to ensure senior executive continuity," he noted in a letter to shareholders. The letter was also signed by the chairman of Aryzta's remuneration committee, Charles Adair.
"These payments were one-off in nature and reflect the exceptional circumstances and challenges facing Aryzta during FY 2017, including the need to avoid the risk of even greater damage to the business impacting our customers, our employees and shareholders," they added.