Tate & Lyle has given its new finance director, Nick Hampton, £700,000 in shares after the company’s poor performance made it unlikely he would collect the full share bonus he had expected when he joined the company.
When Hampton was hired from PepsiCo in June, Tate & Lyle promised to buy him out from his existing pay deal by handing him £2.6m in shares, which had performance criteria attached. One portion of the two-part share award, worth up to £1.4m, was linked to the company’s returns to shareholders.
But, as the share price has fallen since he joined, the company has now replaced those £1.4m of performance-linked shares with another award of £700,000, which do not appear to be subject to performance criteria. They will pay out if he can remain in the job until 31 March 2017.
The company, which no longer produces the sugar with which it has traditionally been associated, said shareholders had been consulted on the change.
Hampton joined the board on 1 September 2014, just weeks before a profits warning on 23 September. The share price was 680p when he joined and then plunged to 592p after the profits warning. They currently trade at around 530p.
“Following consultation with a number of the company’s largest shareholders, which indicated a broad level of support, and in keeping with our shareholder-approved policy in relation to the terms of directors’ appointments, the company has agreed to make a restricted stock award to Nick with a face value of £700,000,” the company said in its annual report (pdf).
“As a condition of the grant of this award, Nick will be required to surrender the award that was made over £1,440,000 worth of shares,” the firm added.
The company also disclosed that the chief executive, Javed Ahmed, had refused to accept shares he could have received through a long-term performance plan.
No directors received annual bonuses because of the fall in profits to £52m from £277m. Ahmed, who admitted the performance had been disappointing, received £996,000 for 2014, compared with £2.7m the previous year.
He said: “The group’s performance for the year was significantly held back by three main factors: first, the impact of operational and supply chain issues experienced mainly in the first half of the financial year; second, the continued extremely competitive market for Sucralose; and third, the impact in the second half of the financial year of volatility and lower pricing in some of the commodity markets in which our bulk ingredients business operates.”
