June 5 (Bloomberg) -- Smithfield Foods Inc. said executives and other “key” employees are set to get paid $47.9 million in retention bonuses following the hog producer’s acquisition by Shuanghui International Holdings Ltd.
CEO C. Larry Pope will get $8.3 million in four installments, the Smithfield, Virginia-based company said in a filing yesterday. He and the other employees will get their final payments on the third anniversary of the completion of the deal, provided they’re still employed at Smithfield, according to the filing.
The senior managers, among the best-paid in their industry, will stay on after the $4.7 billion takeover, the company said May 29 when it announced the deal. The top five executives are also set to get paid at least $85.4 million on their Smithfield stock and share options, according to data compiled by Bloomberg.
That’s despite Smithfield posting a negative return of 18 percent in the five years through May 28, the second-worst performance of any U.S. food company with annual sales of $10 billion or more, according to data compiled by Bloomberg. Grain and sugar trader Bunge Ltd. was the worst in the period.
Smithfield Chief Financial Officer Robert W. Manly stands to get a retention bonus of $3.8 million, according to yesterday’s filing. George H. Richter, chief operating officer of the pork group, may get $4.5 million; Executive Vice President Dennis Treacy $2 million; Executive Vice President Dhamu Thamodaran $2.4 million; and Smithfield Europe President Dariusz Nowakowski $2.9 million.
Smithfield also said there’s an aggregate amount of $24 million in retention bonuses for “other officers and key employees,” without giving further details.
The deal to buy the world’s largest hog and pork producer is the biggest Chinese purchase of a U.S. company and is expected to close this year, Hong Kong-based Shuanghui and Smithfield said May 29.
Shuanghui, which counts CDH Investments Fund Management Co., Goldman Sachs Group Inc., New Horizon Capital, Kerry Group Plc and Temasek Holdings Pte. among its shareholders, is buying Smithfield as a growing middle class in China boosts pork consumption.
Smithfield had been under pressure from one of its biggest shareholders for lagging behind competitors Hormel Foods Corp. and Tyson Foods Inc. Continental Grain Co. said in March that Smithfield should appoint new managers and break itself into three businesses as rising animal-feed costs made its hog-production unit unprofitable.
Continental said June 3 that it supports Shuanghui’s bid and will exit its shareholding.
Smithfield fell 0.2 percent to $32.90 in New York yesterday.
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