Greencore forced to defend Coveney's 'salary of €3.6m' at AGM
FOUR-out-of-10 Greencore shareholders voted to reject a new pay deal for top managers including chief executive Patrick Coveney, forcing the company on to the defensive at an annual general meeting (AGM) in Dublin yesterday.
The chairman of Greencore, Gary Kennedy, said the company would consult with shareholders on the pay issue over the coming year after the vote, which is non-binding, and was backed by 60pc of investors.
"I think the board would prefer to have a higher level of support than they had on that one," ceo Patrick Coveney admitted.
Depending on how well he meets targets, Mr Coveney could be entitled to bonus shares equal to 200pc of his salary after the company doubled his maximim potential bonus.
Shareholder advisory firm Institutional Shareholder Services (ISS) had advised investors to vote against the new remuneration plan head of the AGM.
From the floor of the event one shareholder questioned how "someone with a salary of €3.6m could lead a workforce", adding that "there is an unfortunate imbalance there".
However Mr Coveney defended executive pay at the company, which is the UK's biggest sandwich maker. "These awards for executive directors and senior management are only worth something if the company performs very well," he said.
Greencore chairman Gary Kennedy told shareholders in Dublin that the gap between ceo pay and the income of the company's lowest-earning workers "doesn't make a lot of difference." He praised the contribution Mr Coveney had made to the business, stating that he faced an "onerous task" in meeting the standards at which the bonus would come into effect.
The Greencore board was also forced to defend a shareholder claim made at the AGM that a deal struck to buy US-based Peacock Foods last year was "appalling" and "bad business".
Mr Kennedy said the investment in Peacock Foods would be a major boost for the company's US operations. Earlier yesterday, the company issued a Q1 update that showed US revenues were up by 8pc on a like-for-like basis.
Mr Kennedy said that Greencore's US business had turned "a small profit in the second half of 2016."
Greencore shares rose by 8pc yesterday.