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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Kraft Heinz Settles with U.S. SEC

09/12/2021

According to Kathy Kringer, Global Chief Communications Officer for the Kraft Heinz Company, a settlement was reached with the U.S. Securities and Exchange Commission with  payment of a $62 million penalty.

 

The case arises from the actions of a number of rogue employees who manipulated supplier agreements prior to 2019 to achieve bonus-tied performance targets.  The company adjusted earnings in the second quarter of 2021 to account for the 59 transactions that did not materially affect earnings.

 

Appropriate changes have been made to internal auditing and controls.

This incident illustrates the danger of linking bonuses to performance targets without appropriate oversight and verification.  It is evident that some broiler companies that base bonuses and promotion on data published by a major benchmarking service create risks of distortions since there are incentives to “game the system”.  At the very least, basing remuneration on narrow targets creates a silo mentality that may detract from total company bottom line performance.


 
Copyright © 2021 Simon M. Shane