SMITHFIELD, Va. – Executive compensation declined 18 percent for Larry Pope, chief executive officer of Smithfield Foods Inc., according to the company’s proxy statement released July 23.
Pope’s total compensation for 2012 was $16.5 million, down from $20.2 million in 2011, according to the statement. A decline in Smithfield’s income and changes in the executive compensation formula for Pope reduced his total cash incentives to $5.7 million in 2012 from $13 million in 2011.
For the year ended April 29, the company had income of $361.3 million, equal to $2.23 per share on the common stock, which compared with income of $521 million, or $3.14 per share, during fiscal 2011. Sales for the year were $13,094.3 million, up 7 percent from $12,202.7 million.
“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 statement said. “Accordingly, the CEO’s total direct compensation moves up and down in proportion to the company’s profitability.
“In fiscal 2012, this linkage resulted in a 56 percent decline in our CEO’s cash incentive compensation compared to the previous year.”
The company recorded $4.7 million in cash incentives for Pope because he elected to defer a portion of the amount, according to the proxy statement.
Other executives saw their compensation increase from what they earned 2011:
• Total compensation increased to $11.3 million from $8.5 million for Bo Manly, executive vice president and chief financial officer.
• George Richter, president and chief operating officer, Pork Group, received $8.1 million in total compensation, up from $5.8 million in 2011.
• Total compensation increased to $5.2 million from $3.7 million for Joseph Sebring, president of John Morrell.
• Joseph Luter, executive vice president, sales and marketing, Pork Group, received $4.9 million, an increase from $2.6 million in 2011, according to the proxy statement.
The company also prosed reducing board members’ terms to one year from three years after a majority of Smithfield shareholders voted for the change in a non-binding resolution in 2011. The company’s annual shareholder meeting will be Sept. 19 at the Williamsburg Lodge in Williamsburg, Va.