Premier Foods bosses receive £3.5M in payments

Premier revealed that Clarke, who joined the firm from Kraft in July, received two payments from the firm in compensation for previous arrangements with his former employer.

 “As compensation for forfeited awards from his previous employer…a cash bonus of £1.5M was paid immediately on acceptance of appointment​,” a statement from Premier’s annual report revealed.

“The net proceeds of which were to be invested in company shares. In recognition of forfeited bonus entitlement from his previous employer, Michael Clarke was eligible to receive an annual bonus of £400,000 in respect of 2011.”​

Recovery plan​

Premier also confirmed that the latter payment was dependent on the successful implementation of a recovery plan for the firm.

The report, released yesterday (April 4), revealed that a trio of departed executives were also paid additional sums totalling £1.4M last year, as part of Clarke’s management overhaul of the business.

Robert Schofield, Premier’s former chief executive, picked up an extra £419,205 including cash in lieu of pension and “benefits in kind”. This was in addition to his salary of £466,780.

Former chief financial officer, Jim Smart and Tim Kelly, who left the firm in October, also received payments totalling £1.4M.

The latter stages of the previous management’s tenure saw Premier struggling under the weight of a £1bn debt pile, as a result of an overly aggressive acquisition strategy, experts have claimed.

Since Clarke took the helm, Premier has begun to re-build in an attempt to recover from a troubled 2011, which also included a major botulism health scare. 

Restore the business​

It has recently secured a new deal with its lenders and has revealed its plan to restore the business with a focus on its eight core brands.

Clarke described Premier’s current situation as “complex​” and revealed that a lack of investment in the firm’s brands had been a key factor in its problems.

He said: “Our trading results for the year tell the story. They also reflect certain underlying challenges facing the business. Despite its significant scale, the group has been unable to fully exploit revenue and cost synergies.​

“The business remains complex with insufficient focus and has additionally suffered from a lack of investment behind its brands and a short-term, tactical approach to trading. The need to service significant debt has compounded these challenges​.”

But Clarke highlighted the “collective experience​” of the new management and said the firm’s initial focus would be to stabilise the business and focus on future growth.

Who earns what?

• £7.16M, including a bonus of £2.16M - Stuart Gulliver HSBC chief executive’s salary last year.
• £6.3M – Bob Diamond, Barclays bank chief executive’s 2011 earnings.
• £700,000 plus performance-based bonus entitlement of over £1M - Michael Clarke’s, potential 2012 earnings.