Dollar fall hits Kerry bonuses

THE fall in the value of the US dollar has hit Kerry Group executives in their pockets, with their annual pay and bonus packages falling by 7% to €3.7m.

Executive pay at Ireland’s other top companies has soared by between 15% and 48% in the same period

Kerry Group’s top five executive directors saw their combined pay package of salaries, performance related bonuses, benefits-in-kind and pension contributions fall to e3.715m in 2003 from €4.003m in 2002.

Kerry Group generated sales of €3.69 billion in 2003, delivering pre-tax profits of €223m (€213m).

The fall in pay benefits is due solely to the performance related element of the executives’ pay packages, which fell because earnings per share (EPS) growth was 10.1%. The figure is well below the underlying increase in EPS of 15% and what the company had budgeted for.

The underlying EPS fell to 10.1% when the conversion of US earnings to euro is realised, given the weakness of the dollar. A strengthening dollar could result in a very significant increase in bonus payment for Kerry executives.

In sharp contrast, the company’s non-executive directors increased their pay from a total of €466,173 in 2002 to €544,165 in 2003.

The group’s annual report reveals that Kerry Group’s pension funds for its 18,869 employees is €112m (€90m) in deficit but this is not regarded as a cause for concern as it represents just 4% of the company’s market capitalisation.

Yesterday, Kerry Group also confirmed the completion of the Group’s purchase of Quest Food Ingredients from the ICI Group.

“On a 2003 pro-forma basis, the acquired business had annual revenues of US$255m and earnings before interest, taxation, depreciation and amortisation of US$37m. Total consideration for the acquisition amounts to US$440m,” Kerry said in a statement.

The company said that in a bid to reflect the business culture and unique strengths of Quest Food Ingredients, the freshly-acquired business will form new Kerry Bio-Science division within Kerry Group.