Big package for Viterra CEO | Mixed reaction from farm groups to CEO’s potential purse
The man who steered a Saskatchewan grain industry icon out of bankruptcy and into prosperity will be well compensated for his past leadership.
A management information circular sent to Viterra shareholders discloses the compensation that chief executive officer Mayo Schmidt will receive if shareholders vote May 29 in favour of the $6.1 billion sale of the company to Glencore International.
Schmidt has 633,211 common shares in the company that will be worth $10.3 million at the proposed bid of $16.25 per share.
The vesting of his options, employee share units, performance share units and restricted share units would put another $12.9 million in his pocket.
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His severance package, benefits and short-term incentive plan are worth another $6 million, for a total value of slightly less than $30 million. That’s on top of his annual salary and bonuses, which amounted to $5.1 million last year.
National Farmers Union president Terry Boehm is appalled.
He said it’s a perfect example of the widening gap between the middle class and the upper class that is at the core of the Occupy movement.
Boehm resents the fact that the assets built by farmers through the co-operative movement are being sold off to an international commodity trading company.
“One of the fellows that is facilitating this walks away extremely wealthy and that is really galling to all those farmers who supported the co-op and the pool and fought against its destruction,” he said.
Kevin Bender, president of the Western Canadian Wheat Growers Association, wasn’t too taken aback by Schmidt’s potential compensation package.
“It looks like he has done well for himself,” he said.
“$30 million sounds like a big number but when you look at the way the company has gone from being three prairie pools to really a global entity, the company has done well under his leadership.”
Saskatchewan Wheat Pool, Viterra’s predecessor, was drowning in $1 billion in debt when Schmidt took over the reins in 2000. Back-to-back droughts in 2001 and 2002 slashed revenues, forcing the company into temporary default with its lenders.
Schmidt hashed out a financial restructuring plan with the banks and bondholders in 2003. By 2007 the company had undergone enough of a financial turnaround that it was able to buy rival grain company Agricore United for $1.8 billion to form Viterra.
“How that happened mystifies me to this day,” said Boehm.
He can’t understand how Schmidt convinced bankers to leverage the deal.
However, he doesn’t think Schmidt deserves all the credit for the increase in Viterra’s share value. Boehm believes Schmidt benefited greatly from the tremendous run-up in grain prices that started in 2008.
