Smithfield Foods' management reaps $85M prize

The reward comes after the pork processor's performance lagged rivals' for years.

By Jonathan Berr May 31, 2013 3:45PM
File photo of smoked sausage from Smithfield Foods Inc. in a grocery store in Zelienople, Pa. on March 4, 2011 (© Keith Srakocic/AP Photo)Top executives at Smithfield Foods (SFD), whose company's financial performance has lagged peers' for years, stand to earn more than $85 million in the company's sale to China's Shuanghui International Holdings, thanks to their stock and share options.

Best of all for them, they will be able to keep their jobs after the sale is completed, which looks likely to occur unless other bidders emerge.

The reward certainly can't be viewed as pay for performance. According to Bloomberg News, Smithfield posted a negative return of 18% over the past five years, the second-worst performance of any U.S. food company with annual sales of $10 billion or more.

Bloomberg notes that among those potentially getting windfalls are CEO C. Larry Pope, who owns stock valued at $25.4 million, and Executive Vice President Joseph W. Luter IV, a descendant of the family that founded the company. He owns stock valued at $21.1 million and would also get $1.1 million in payments because of his options. Luter's father, Chairman Joseph W. Luter II, owns $30 million worth of stock. He preceded Pope as CEO.

One major shareholder, Continental Grain, had earlier this year urged the Smithfield, Va., company to consider strategic changes, including breaking itself up. Continental complained that Smithfield had paid no cash dividends for seven years while rivals Hormel Foods (HRL) and Tyson Foods (TSN) paid hundreds of millions of dollars. According to Dealbook, closely held Continental hasn't decided if it will support Shuanghui's bid and "may be waiting to see if Smithfield attracts a counter-offer."

In an interview with Dealbook, Pope is quoted as saying that Shuanghui didn't want Smithfield to be broken up. He also predicted that Continental Grain would back the deal because it's in the best interest of shareholders. Smithfield declined to comment, and Continental couldn't immediately be reached.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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Jun 1, 2013 1:37AM
Subsidized farming in America so foods are always available for American, but the trickle up benefit go  to CEO are enormous, and now it will also go to China!
May 31, 2013 10:38PM
The beauty of America is that you could start your own pork producer if you wanted.   There are small farms who have learned how to brand and develop their own following.
Jun 1, 2013 10:13AM

And does anybody have to ask, "What's wrong with America"?


And why the Rich or even Corporations, are becoming DESPISED more every day ?


What a cool way to make millions, do a piss poor job, run a company into the ground...

And walk away with big fat-azzed grin on your smuck-face.

May 31, 2013 8:29PM
sure they will - - - why don't we just sell the whole USA right down the river to a bunch of ruthless, baseless Chi-Coms, for an additional FN dime, while you are at it


May 31, 2013 10:27PM

These guys can go screw themselves, selling pigs feet as hamhocks.


No Smithfield, No Morrell, No Armour, all the same company, all the same ripoffs.

Jun 2, 2013 11:13AM
Why is it that when the fascists in China, and they are fascists, jailing human rights lawyers, torture, committing cultural genocide in Tibet, and generally being a tyranny, why is it when this fascist regime prevents the buying of Chinese companies that we Americans allow our corporate swine, who will sell their mother for a dollar, to sell to the Chinese?  Is this how our nation will decline?  By being stupid.  NEVER will I buy Smithfield products.  It's not only un-American, it's anti-American and in support of a tyranny.
Jun 3, 2013 7:10AM

Smithfield products are pricier than comparable companies offerings. Coupled with the excessive pay and benefits for the upper management, it's no wonder they haven't been making a profit for the shareholders. I've never been able to afford their products....

More greed being exposed???

Jun 2, 2013 3:33PM

There are still a few, small slaughter or butcher houses around, probably depends where you live??


I know of two, used to be three. Near us and we have hogs and deer done about every year..


But correctly there were 5, about 10-15 years ago and they are dwindling.

Jun 2, 2013 1:26PM
SOS. Executives get the gold mine, everyone else gets the shaft.
Jun 2, 2013 8:32PM
No one mentioned this has to be approved by the US because of China's additives to pork feed and other issues it might get disapproved and no on gets jack.
Jun 2, 2013 12:14PM
why does China want to take over the world?
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