Dow Jones reports that the two largest Dutch pension funds are protesting the pay package given to Anders Moberg, Ahold's new CEO. The companies say that they have a problem with both the size and structure of the compensation and the way it was revealed to shareholders.
Moberg will receive at least the equivalent of $6.5 million (US) over the next two years, making him one of the highest paid CEOs in the Netherlands. The compensation package was announced at last Thursday's shareholder's meeting, and when investors asked for a delay in Moberg's official appointment to the CEO job, he threatened to quit if he didn’t get the title and the money immediately. The pension funds say that they then supported Moberg only because they were concerned about the impact on Ahold if it suddenly lost its new CEO.
"We consider such a procedure to be careless. This creates bad will among shareholders," the pension funds said in a joint letter to the company. "A lot of trust has been lost and restoring it must be given a high priority. Given last week's events, it is doubtful whether Ahold is giving this priority."
Moberg will receive at least the equivalent of $6.5 million (US) over the next two years, making him one of the highest paid CEOs in the Netherlands. The compensation package was announced at last Thursday's shareholder's meeting, and when investors asked for a delay in Moberg's official appointment to the CEO job, he threatened to quit if he didn’t get the title and the money immediately. The pension funds say that they then supported Moberg only because they were concerned about the impact on Ahold if it suddenly lost its new CEO.
"We consider such a procedure to be careless. This creates bad will among shareholders," the pension funds said in a joint letter to the company. "A lot of trust has been lost and restoring it must be given a high priority. Given last week's events, it is doubtful whether Ahold is giving this priority."
- KC's View:
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We agree.
There's a lot of skepticism about Ahold in the marketplace right now, and this didn’t help its prospects. Rather, it just reinforces the notion that the company may have its eye on the wrong ball.
We don't mind people making a lot of money. (That's one of our goals.) But we think that maybe people ought to get compensated when they've delivered, not before they've even done the job.
Add to that the fact that Moberg's vision for the future seems to be more reliant on scissors than brick-and-mortar, and it doesn't make us want to run out and buy Ahold stock.
