SMITHFIELD, Va. – Larry Pope, CEO of Smithfield Foods, Inc., took a 35 percent pay cut in the company's last fiscal year, according to a report filed with the Securities and Exchange Commission. Pope earned $10.8 million in fiscal 2013.
"Pre-tax profits historically have been the key metric used in establishing performance goals for our CEO and other executives whose responsibilities are not limited to particular business segments," the report stated. "Accordingly, the CEO’s total direct compensation moves up and down in proportion to the Company’s profitability. In fiscal 2013, this linkage resulted in a significant decline in our CEO’s cash incentive compensation compared to the previous two years."
Net income in the year ended April 28 was $183.8 million, which compared with $361.3 million in fiscal 2012. The Hog Production segment suffered an operating loss of $119.1 million during fiscal 2013, which compared with operating income of $166.1 million in fiscal 2012.
Pope's compensation was higher in 2012 and 2011, the company's most profitable years. He earned $16.5 million in fiscal 2012 and $20.2 million in 2011, according to the report. Other top executives in the Smithfield, Va.-based company also saw their compensation decline. Bo Manley, executive vice president and CFO, made $8.7 million in 2013, compared to $11.4 million in 2012, according to the report.
Other executives to receive less included:
• George Richter, president and COO of the Pork Group received $6.1 million, down from 8.2 million;
• Joseph Sebring, president of John Morrell, earned $4 million, down from $5.3 million in 2012; and
• Joseph Luter IV, executive vice president of sales and marketing for the Pork Group, made $4.2 million, down from $5.5 million a year ago.
A special meeting of Smithfield shareholders will be held Sept. 24 in Richmond, Va., regarding the proposed acquisition of Smithfield by Hong Kong-based Shuanghui International Holdings, Ltd. Pope would receive an $8.3 million retention bonus if he remains at Smithfield for at least three years after the buyout.