Departing Sysco CEO slated for $6M in severance
Sysco, the nation’s largest food distributor, will pay a pretty penny to replace its CEO.
Tom Bené, Sysco’s outgoing chief executive, is set to receive a $6 million severance payout after he leaves the Houston-based company March 1, according to a filing Thursday with the U.S. Securities and Exchange Commission.
Kevin Hourican, the CVS Pharmacy president who will replace Bené on Feb. 1, will be paid a onetime sign-on bonus of $2 million. In addition, Hourican will be eligible to receive a “make-whole
bonus” of at least $1.45 million to make up for any forfeited annual cash bonus from his previous employer, as well as a “makewhole equity award” of $12.8 million to make up for any forfeited stock award from his previous employer, according to the filing.
Sysco said Monday that it was replacing Bené with Hourican, whose expertise in sales, supply chain, logistics, operations and digital technologies would help the company “unlock meaningful value for customers and other key stakeholders.” The leadership shake-up came as a surprise to some Wall Street analysts, who said Sysco has performed well under Bené’s leadership.
Sysco’s return on invested capital improved to 16.7 percent in 2019, up from 15.9 percent in 2016, and its stock posted a 17.3 percent annual return over the past three years, outperforming the food distribution index average of 13.6 percent in the same period, according to investment research company Morningstar Inc.
“While Sysco’s performance has improved steadily the last few years, the board believes that the senior leadership changes announced today will enable the company to accelerate performance, fully capitalize on its scale advantages and drive meaningful operating improvements,” Sysco said in a statement Monday.
Hourican, a 20-year retail industry veteran who also served as executive vice president of CVS Health, will be paid a base salary of $1.3 million as well as $8.5 million in stock and stock options during fiscal year 2020, according to Sysco’s employment letter dated Jan. 10.
Hourican has held roles at Sears and Macy’s. Most recently, he oversaw CVS’ $85 billion retail division, including 9,900 stores and more than 200,000 employees.
Bené, who joined Sysco in 2013 and rose through the ranks to become CEO in January 2018 and chairman in September 2018, will step down from his posts at the end of the month. He will stay on as an executive adviser until March 1 to assist with the transition.
Bené was paid a base salary of $1.18 million and total compensation of $10.7 million, including bonuses, stock and stock options, according to Sysco’s most recent proxy statement.
Sysco markets, sells and distributes chilled and frozen food products to restaurants, hospitals, schools, hotels and other institutional clients. The company, which employs more than 69,000, operates 330 distribution facilities worldwide, serving more than 600,000 customer locations.