Bloomberg News

Heinz Pays Hees $9.2 Million, Ex-CEO Gets $110.5 Million

March 10, 2014

Heinz Products

HJ Heinz Co. products sit on display at a supermarket in Princeton, Illinois. Photographer: Daniel Acker/Bloomberg

HJ Heinz Co., the ketchup maker taken private by 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. (A:US), paid Bernardo Hees $9.2 million in his first year as chief executive officer.

The package includes an incentive payment of $1.2 million, $7.3 million in option awards and $561,538 of salary, Pittsburgh-based Heinz said today in a regulatory filing. New Chief Financial Officer Paulo Basilio received $3.8 million.

Hees joined in June from Burger King Worldwide (BKW:US) Inc., the fast-food chain owned by Jorge Paulo Lemann’s 3G. Hees replaced William Johnson, CEO since 1998, who got $110.5 million in the eight months ended Dec. 29. Hees has closed factories and consolidated offices as part of a plan that eliminated about 3,400 jobs to boost profit.

Related: Buffett Move Shows Currency Dip Won’t Fix Canadian Plants

“Results so far are encouraging,” Buffett, 83, wrote in a letter to investors of Omaha, Nebraska-based Berkshire published March 1. “Earnings in 2014 will be substantial.”

Berkshire and 3G each paid about $4.3 billion for equity in the company, and Buffett’s firm provided an additional $8 billion for a preferred stake with a 9 percent annual interest payment. The arrangement, in which Berkshire provides financing and a partner oversees operations, could be a “template” for future deals, the billionaire wrote in the letter.

Lemann, Behring

Buffett opted to receive no compensation for serving on the ketchup maker’s board, the filing shows. Alexandre Behring got $443,000 for his role as chairman, while other directors including Lemann, 74, got $221,500 each.

Johnson’s package includes a $48.8 million payment tied to equity awards that were outstanding when the deal was completed. Heinz said last year Johnson could receive “golden parachute compensation” including $56 million in cash, equity, bonuses and other benefits.

Michael Mullen, a spokesman for Heinz, said the job cuts are part of a continuing plan to improve the company.

“The difficult actions we are taking now will result in Heinz becoming a stronger and more nimble organization that is better-positioned to become one of the most efficient food companies in the world,” Mullen said in an e-mail.

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net

To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net Steven Crabill


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