Monday, January 29, 2024

CRIMINAL CAPITALI$M REDUX

ADM postpones some exec bonuses amid accounting probe -memo



Sun, January 28, 2024 

Archer Daniels Midland Co (ADM) logo

By Chris Prentice and Karl Plume

NEW YORK (Reuters) - Archer-Daniels-Midland Co will delay paying performance bonuses to some executives until its financial statements are completed and audited, according to a staff memo seen by Reuters.

The delay, detailed in a memo sent to staff on Thursday, comes days after ADM sidelined its chief financial officer and brought in outside lawyers to launch an investigation into accounting practices last week.

The investigation is focused on the nutrition segment, a relatively small unit of the grains trading giant's business which played an outsized role in executive compensation.

Compensation from ADM's performance incentive plan for members of the company's executive council, including any who retired last year, would be postponed, the note said.

ADM declined to comment. Payments to other employees would be paid in March on the company's normal schedule, according to the staff memo.

The executive council includes several top executives and heads of other ADM businesses. Reuters could not determine exactly how many people are on the council.

According to the company's website detailing what it calls its Senior Leadership, of the 19 people listed, 14 are cited as being members of the executive council in their biographies.News of the investigation into accounting practices sent ADM shares tumbling 24% on Jan. 22, the biggest fall since 1929, according to the Center for Research in Security Prices.

ADM has delayed the release of its full-year 2023 financial results until further notice.

The probe focuses on ADM's Nutrition reporting segment and "intersegment transactions," the company has said. It started after ADM received a request for information from the U.S. Securities and Exchange Commission, ADM said. The SEC declined to comment.A change by ADM's Compensation and Succession Committee in 2020 tied half of long-term executive compensation to operating profit growth of the Nutrition segment, according to ADM proxy statements. Previously, the long-term compensation had been based on ADM's adjusted earnings, return on invested capital and relative total shareholder returns, according to the filings.

The Nutrition unit accounted for just 9.3% of ADM revenue that year, LSEG data showed.

ADM in 2023 reported average Nutrition operating profit growth from 2020 to 2022 of a larger-than-forecast 21.4% and which topped the company's average adjusted return on invested capital target. As a result, seven ADM executives were awarded more than 841,000 performance share units, twice the targeted payout, the proxy statements showed. Those PSUs were valued at nearly $69 million when they vested in February 2023.

(Reporting by Chris Prentice in New York and Karl Plume in Chicago; Editing by Caroline Stauffer and Leslie Adler)



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