Kerry Group’s shareholders will be the final judges

It is the time of year when annual reports come at investors thick and fast. Public companies have already provided shareholders with much of the key information from 2018 in their results, published over the last few weeks. Annual reports consist mostly of glossy repetitions of this, accompanied by summaries of the year gone by from the chairman and executives, written in impenetrable corporate jargon.

Nevertheless, the reports are worth proper consideration, as they carry extra information, in particular the sections outlining how much of their shareholders’ money the executives have taken home. These mini-reports have become much longer and more detailed in recent years.

Kerry Group’s annual report for 2018 is a case in point. The remuneration report is all of 22 pages, detailing exhaustively, and with the aid of graphs, the company’s pay and bonus policies.

It is hard to know just how valuable this is. Kerry's performance was flat last year. Executives such as Gerry Behan, president and chief executive of its taste and nutrition business, saw their bonuses fall, presumably as a result of this.

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His long-term incentive plan payment dropped to €1.1 million from €1.3 million, while his performance-related bonus was €540,000, from €739,000 in 2017.

This at least tells you that there is a connection between performance and bonuses, but it also says that executives get generous extra payments even when the company’s performance is so-so,

Last year was effectively chief executive Edmond Scanlon’s first in the top job, while Marguerite Larkin was only appointed chief financial officer at the end September. So it is hard to rate how generously or otherwise the company ultimately intends being to these key figures.

Shareholders are the final judges. Given how increasingly vocal some investors and advisers are now becoming about executive pay and other issues, it will be interesting to see what they make of this year’s report at Kerry’s annual general meeting.