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Diageo CEO sees salary cut 35% after targets missed
Diageo CEO Ivan Menezes has had his pay slashed by 35% as a result of missing long-term targets in the company’s most recent fiscal results.
Ivan Menezes has been CEO at Diageo since 2013
Chief financial officer Kathy Mikells also had her salary slashed by 50% due to missed targets, according to the 2017 annual report.
Menezes was given 45,477 shares in the company on 25 September 2014, with payout due this year subject to a performance condition based on specific targets.
The long-term bonus plan was subject to factors including compound annual growth in earnings per share, set at a minimum target of 6% p.a. and 11% p.a. The threshold, however, was not met at 3%.
The report stated: “As a result of the long-term incentive performance conditions not being achieved, total variable pay to the chief executive and the chief financial officer in respect of the year ended 30 June 2017 is 35% and 50% lower respectively than in the year ended 30 June 2016.”
Diageo sets its variable pay based on average financial performance over the last three years, judged against shareholder return, profit margin and sales growth.
Though organic net sales grew 4% to reach £12.1 billion (US$15.8bn) in its 2016/17 financial year, this was not as strong as in previous years.
Kathy Mikells is chief financial officer at Diageo