The maker of world famous wines, including Penfolds and Wolf Blass, has increased chief executive Michael Clarke’s pay package almost 30 per cent for turning the company around.
Treasury Wine Estates has increased Mr Clarke’s fixed remuneration to $2.2 million a year, from $1.7 million, effective March 1, citing the “significant turnaround of the business over the past two years under his leadership and strategic initiatives put in place for future growth”.
Chairman Paul Rayner said Mr Clarke’s “global vision and leadership has been critical to TWE achieving outstanding results for our shareholders and the board believes it is entirely appropriate to recognise this through an increase in his fixed remuneration”.
TWE – which also owns wine brands such as Lindeman’s, Rosemount, Beringer, Chateau St Jean and Stag’s Leaps – recently reported a 42 per cent jump in first half net profit to $60.6 million, from $42.6 million a year earlier.
Profit was boosted by a strong performance from TWE’s operations in Australia and overseas, combined with a lower Australian dollar.
At the company’s results on February 18, the company said its recent $US552 million ($A756.27 million) acquisition of Diageo Wine, which was completed on January 1, is set to be a game-changer in the US.
The acquisition of Diageo’s flagship win brands – Beaulieu Vineyards, Sterling Vineyards, Acacia and Hewitt – will give TWE’s portfolio more weight towards premium wines as consumer tastes move upmarket, and access to more grapes.
Mr Clarke said, at the company’s results, key TWE decisions made over the past two years were now delivering a more balanced, stable business globally.
The initiatives, included changing the release date of the Penfolds portfolio of wines, investing in priority brands globally, strengthening supply chains, increasing access to high-quality grapes, improving routes to market in China, and now, stepping up momentum in the US business.
Before this 29.4 per cent rise, Mr Clarke’s remuneration hadn’t been revised since his appointment on March 1, 2014. It was contractually due to be reviewed on September 1.
The next review of Mr’s Clarke’s remuneration will be in September 2017.