Aryzta unveils new recipe for share scheme

OWEN Killian and his management team at Aryzta continue to try and appease investors who have grown weary of its flagging share price and corporate governance shortfalls.

The appointment of Gary McGann, the former Smurfit boss, as chairman gave the share price a very welcome lift in September. And I see other steps are being made to bring investors onside ahead of next month’s AGM in Zurich.

Aryzta has provided investors with a detailed booklet on pay and remuneration, another step towards more transparency. It reveals that the baked goods company, whose customers include fast food giants McDonald’s and Subway, appointed international consultants to carry a review of its compensation scheme.

Killian, who is still upgrading a house on Shrewsbury Road that he bought for €6.5m in 2014, is often listed as one of Ireland’s best paid CEOs, although his package has reduced.

A market study by Pearl Meyer/NACD concluded that Aryzta’s board remuneration has decreased since 2009, while general industry board remuneration has increased. It also found that total compensation was in line with Aryzta’s peers.

However, it recommended that a number of changes to the long-term incentive plan “should be considered to better align with the business strategy and market practices”.

These include adopting a total shareholder return measure relative to its peers as a metric, alongside the EPS condition for future share awards.

The circular shows that the maximum prospective pay for executive management has been fallen for 2017 from 17.75m Swiss francs (€16.5m) to just over 15m Swiss francs.

It points out that in the past couple of years the actual total executive management has not come close to the maximum.

The AGM documentation also reminds shareholders that Killian’s pay-related performance bonus for 2016 has been withheld as earnings per share targets were not met.

It reveals that McGann will be paid 323,000 Swiss francs (€300,000) a year. A generous fee, but if he can get Aryzta back on track no one will begrudge him a cent.