WH Group defends remuneration plan for two top executives

WH Group, the world's largest pork processor formerly known as Shuanghui International, believes its exponential sales growth justifies a US$681 million share-based compensation plan for two senior executives in the run-up to its HK$41 billion initial public offering.

"Our sales have risen 20 per cent annually for 20 years and the market capitalisation of Henan Shuanghui Investment & Development has jumped to about 100 billion yuan [HK$125.6 billion] from two billion yuan at the time of listing," said WH chief financial officer Guo Lijun yesterday. "We are confident we'll continue to achieve fast growth."

Guo, a former executive vice-president of Shuanghui Investment, Asia's largest meat company, said the remuneration programme would not cause any operational or financial problems after the listing.

The company, which made headlines after the US$4.7 billion acquisition of Smithfield Foods last year, issued 573.1 million new shares to WH chairman Wan Long and 245.6 million to vice-president Yang Zhijun, which translated into a combined cost of US$681 million to be marked as expenses for 2012 and 2013.

Dubbed the "godfather of pork" on the mainland, Wan became the meat processor's factory manager in 1994, about five years after the Shuanghui brand was created and is credited with the company's rapid rise.

Yang, a key adviser to Wan, is in charge of the group's merger and acquisition strategy.