Food firm's directors waive bonuses

THE EXECUTIVE directors of Greencore have waived their performance bonuses for 2008, the year the company discovered a €21 million fraud at its Campsie Mineral Water business in Scotland.

The executive directors shared a total remuneration package – excluding share options – of just under €2.8 million last year compared with more than €4 million in 2007, according to the com-pany’s 2008 annual report published yesterday.

The four executive directors shared performance-related cash bonuses worth more than €1.8 million in 2007. As a result of the non-payment of performance bonuses the pay of chief executive Patrick Coveney – who replaced David Dilger in March last year – fell from €909,000 in 2007 to €687,000 in 2008.

The accounts show that Mr Dilger opted to take his pension in a lump sum rather than leave it in the company scheme, which has a net deficit of more than €68 million. Mr Dilger, who is 51, was entitled to an annual pension of €533,000 from the age of 50 according to the report.

No figure for the lump sum was disclosed and Greencore declined to comment, but the figure is understood to be in the region of €13 million.

“The transfer value was determined by the actuary to the scheme in accordance with the rules of the scheme. No augmentation was paid by the company in respect of this transfer value,” according to the report.

The accounts also show that Mr Dilger was paid just under €1.1 million in 2008, including an “accrued bonus entitlement” of €665,000. The bonus related to the meeting of specific objectives by Mr Dilger according to Greencore. He also received consultancy payments of €20,000 after leaving. He did not receive a performance bonus.

Greencore reported the “deliberate concealment of costs” at its Scottish mineral water business in June last. The fraud was not detected for two years and forced it to restate its financial reserves in 2006, its results for 2007 and resulted in a full-year loss of €4 million at the unit last year.

Following the discovery of the fraud Greencore dispensed with the services of its external auditors PricewaterhouseCoopers and replaced them with KPMG.

Greencore subsequently carried out a “root-and-branch investigation” of every business and balance sheet, assisted by KPMG.

No other financial and internal control weaknesses were found during the review, although the company has significantly revised its “organisation structure, review processes and risk management”, according to the report.