New a2 CEO starting soon

AUCKLAND: A2 Milk Co’s new managing director and chief executive Jayne Hrdlicka will start on July 16, replacing Geoff Babidge who had been in the role since 2010.

Mr Babidge announced his plans to retire last year, having overseen the company while its shares jumped from about $1 at the end of 2015 to a thenrecord of $8.75 on the back of successive strong sales as the company’s infant formula attracted strong demand in China.

The shares last closed at $11.40, and have gained 41% this year.

Ms Hrdlicka was chief executive of Qantas Airways’ Jetstar Group for the past five years and a nonexecutive director of Woolworths. Earlier in her career, she was a partner at Bain & Co in the United States.

When her appointment was announced in December, a2 chair David Hearn said she would focus on supporting the company’s growth strategy across a broader nutritional products platform in established and new markets.

Under the terms of employment released to NZX, Ms Hrdlicka will be paid A$1.5 million per year, reviewed annually, with a yearly bonus of up to 100% of her salary based on performance against key indicators, though the a2 board can also increase or decrease that by 20% on its own assessment of her performance.

Ms Hrdlicka also gets rights to acquire a2 shares based on performance, worth up to 1.75 times her total fixed pay in the first year or $A2.625 million ($NZ2.85 million).

In following years, she will be offered performance rights of 150% of her fixed pay. The first performance rights will vest when a2 achieves a certain annual growth rate in its diluted earnings per share, yet to be determined by the board.

In exchange for the short and longterm incentives she gave up by leaving Jetstar, a2 is paying Ms Hrdlicka $A586,666 and giving her timebased rights for just under 600,000 a2 shares to vest between August this year and August 2019.

Those rights are not subject to performance hurdles.