Some post-Thanksgiving turkey…

December 6, 2007

images-2.jpegThe classic holiday tearjerker It’s a Wonderful Life seems especially poignant this year, with kindhearted banker George Bailey making what might be subprime loans to residents of Bedford Falls. Of course, if not for George, cute Bedford Falls would be the sleazy and depressing town of Pottersville.

The proxy statement filed Tuesday by Pilgrim’s Pride Corporation (PPC) – a company that’s run, unabashedly, by the same family that controls it – gives us a glimpse of the corporate Pottersville we might inhabit if all firms were similarly incestuous. (Under a 2003 voting agreement, Pilgrim family interests control 62.25% of the company’s common stock, though they actually own more than that).

Both Senior Chairman of the Board Lonnie “Bo” Pilgrim and his son, Chairman of the Board Lonnie Ken Pilgrim, serve on the compensation committee, which decided to pay Lonnie Bo a total of $3.2M for last year, including $926K of “other compensation”: $186K for “personal use of corporate aircraft,” $30K for personal use of a car (a humble 1999 Lexus RX300, worth about $12K, that the company gave to him in August), $5K in tax planning, and another $1.3K in “service award payments.” But the bulk of his “other comp,” oddly, was money Pilgrim’s Pride paid to employ his daughter, Greta Pilgrim-Owens ($354K) and son Pat ($344K).

The “related transactions” section of the proxy is dizzying; highlights include the firm leasing an airplane from Lonnie Bo at $30K per month, paying him $885K to raise chickens — nearly $100K more than last year, when we last footnoted the company — and forking over $550K to his son Pat for grain and hauling. There is also talk of ‘”risk transfer transactions” that seem to involve Lonnie Bo and the firm passing live chickens back and forth. Then there’s the Retirement and Consulting Agreement signed in October with former Vice Chairman Clifford E. Butler – through 2010, he’ll get $55.5K each month for putting in 20 hours of work, plus $250 for each additional hour. Meanwhile, in November Pilgrim’s COO told analysts: “We simply must find ways to operate more efficiently as nearly all of our costs are rising.”

Hello, Clarence the angel? I think these folks need you.

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