Food Industry CEO Paychecks Balloon From 2006

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Like soaring grocery prices, the once relatively modest pay for food and beverage CEOs seems to have ballooned since we last explored executive compensation back in 2006. For example, the CEO at Dean Foods, Gregg Engles, was paid an unpretentious $4.75 million in 2006. Today, Engles’ paycheck is reported to be more than $66 million, a 1,400 percent increase, according to Forbes magazine.

Forbes recently published its annual listing of CEO salaries. Pay for food industry bosses ranged from the $66.08 million gross of Engles to the modest $810,000 for Hershey’s David West, the only food industry head honcho not to earn at least seven figures. Two years ago, ConAgra CEO Gary Rodkin was our low-pay poster child with a pay stub of just $1 million. But he was a brand-new CEO at the time. His compensation has progressed nicely, coming in at $7.5 million for the ConAgra fiscal year that just ended in May.

All figures are for each company’s most recent fiscal year, in most cases the 2007 calendar year. Total compensation for each chief executive includes: salary and bonuses; other compensation, such as vested restricted stock grants, long-term incentive plan payouts and perks; and stock gains, the value realized by exercising stock options.

Among the big gainers in our sector on the list was E. Neville Isdell at Coca-Cola. Isdell’s pay increased nearly 30 percent to $9.08 million between 2006 and the latest Forbes report. His increase actually is in line with the average 38 percent collective CEO pay raise (year-over-year) across all sectors.

Not all food industry top executives saw an increase. Some, like Procter & Gamble’s Alan Lafley, actually took home less than in 2006; Lafley’s income dipped by approximately $5 million to $11.29 million. Before anyone schedules a benefit for Lafley, it should be noted that his stock in the company has increased to more than 78 million shares.

General Mills saved more than $14 million in CEO compensation by replacing Stephen Sanger, (who made $18.61 million in 2006) with Kendall Powell, who took home a paltry $4.57 million. Sanger, however, also was chairman, a title Powell did not get until this May.

For the majority of the food industry’s leaders, however, salaries mirrored the general upward trend in executive compensation. For the most part, however, the CEOs in our sector made below-trend gains, and their salaries pale in comparison to peers in some of the more high-flying sectors, such as technology.

For instance, not one of the 10 CEOs on the Forbes top performers list was from the food industry sector. Fortunately, neither were any of the 10 worst performers. Forbes defines performance or efficiency rank based on a chief executive's performance-to-pay score. Ranks are given only to chief executives who have a six-year tenure and six-year compensation history.

While none of the CEOs from our sector is among the 10 highest paid, Engles’ paycheck places him in the top 20 (ranked at No. 15). But it’s only fair to note he, too, also holds the title of chairman, as well as being one of the biggest stockholders in Dean Foods. Engles’ compensation still pales in comparison to Oracle’s Lawrence Ellison, who took home more than $190 million.

Interestingly, Engles was the only food and beverage CEO to merit a salary ranked within the top 100. The next highest paid CEO from our sector was Indra Nooyi at PepsiCo (also a chairman/CEO) ranked No. 139. In fact, Engles’ pay was more than the combined salaries of the next five food industry CEOs.

 

Food Industry CEO Salaries
Name
Company
Pay ($ Millions)
Rank
Gregg Engles
Dean Foods
66.08 1
15
Indra K. Nooyi
Pepsico 
12.74
139
Alan Lafley
Proctor & Gamble
11.29
160
E. Neville Isdell
Coca-Cola
9.08
192
W. Leo Kiely III
Molson Coors Brewing
9.01
194
William Johnson
H.J. Heinz 
8.89
197
Gary Rodkin
ConAgra Foods
7.51
225
Douglas Conant 
Campbell Soup
6.65
247
A. D. David MacKay
Kellogg
5.80
262
Eric J. Foss
Pepsi Bottling
5.73
265
Robert S. Sands 
Constellation Brands
5.492
273
Brenda Barnes 
Sara Lee
5.09
295
Richard L. Bond 
Tyson Foods
5.07
297
Irene Rosenfeld
 
Kraft Foods
4.38
3.30
Kendall J. Powell
General Mills
4.572
317
Patricia A. Woertz
Archer Daniels Midland
4.06
344
August A. Busch IV
Anheuser-Busch Cos.
3.93
352
Jefferey Ettinger
Hormel
3.74
360
Paul Varga
Brown-Foreman
3.71
364
William D. Perez
Wrigley 
3.63
367
C. Larry Pope
Smithfield
3.18
388
Bruce A. Carbonari
Fortune Brands
 
3.042
396
John F. Brock
Coca-Cola Enterprises
2.99
398
David J. West 
Hershey 
0.812
490

Source: Forbes, "CEO Compensation," April 30, 2008

1. Data from prior year
2. New chief executive, pay may be for a prior position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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