Hain Celestial’s Executive Compensation Sky-High? (11/26/06)
FOR IMMEDIATE RELEASE: November 26, 2006
CONTACT: Margaret J. Covert or Julie Goodridge
NorthStar Asset Management, Inc.
PO Box 301840, Boston, MA 02130
At Hain Celestial’s annual shareholder meeting on Thursday, November 30, CEO Irwin Simon had better hope shareholders drink a big mug of Celestial Seasoning’s Sleepytime Tea before voting on the issues before them. Although the stock has finally broken out of years of lackluster performance, shareholders will be asked to vote on yet another expansion of stock option benefits for the company’s top executives, further diluting shareholder value.
Over the last 10 years while sales at the company have increased almost 1,000 percent, the value of each share of underlying stock has only increased one quarter of that amount. Where has all that value gone? “Into the pocket of founder and CEO Irwin Simon,” says Julie Goodridge, President of NorthStar Asset Management, Inc., a wealth management company based in Boston. “We estimate that Simon’s compensation over the last decade has increased 688% and his net worth has increased by at least $75 million,” Goodridge says. “I suspect that the majority of the workers at the company havent averaged even a 68% per year increase in salary, bonuses and stock options.” Worried about the long term impact of excessive executive compensation on shareholder value and employee morale, NorthStar Asset Management, Inc. asked Hain Celestial to review the compensation package of its CEO, Irwin Simon. Hain Celestial agreed to produce that report.
The compensation review, requested by NorthStar through a shareholder proposal, was made available to shareholders in July 2006. The shareholder proposal asked specifically for data comparing the highest and lowest paid workers and an analysis of that data over time. In addition, the proposal sought a discussion of whether Hain Celestial’s executive pay was excessive and in need of modification. Further, the company was asked to explain whether the pay of highest or lowest paid workers should be adjusted to more reasonable and justifiable levels.
But according to NorthStar, the results of the report cannot be released to the public. “The company would not release the report to us until we agreed not to discuss the findings with anyone,” said Goodridge. “Given this year’s request by the Board to issue additional shares of Hain Celestial to further augment executive pay, we wonder if the Board has even read the Executive Compensation Review. We plan to attend the annual meeting tomorrow to ask Hain Celestial to release the report to the investing public. We feel that potential investors and members of the Board need to understand the impact of these excesses now, before shareholder value and employee morale plummet.”
NorthStar Asset Management, Inc. is a wealth management firm based in Boston, specializing in socially responsible investing.