| HONG KONG, April 14
HONG KONG, April 14 WH Group Ltd's CEO and
another top company executive have been awarded nearly $600
million worth of shares for helping the Chinese pork giant
secure its $4.9 billion takeover of U.S.-based Smithfield Foods
Inc last year, its preliminary prospectus showed.
WH Group and some of its shareholders launched an up to $5.3
billion initial public offering in Hong Kong last week, the
second-biggest ever listing by a food and beverage company.
Wan Long, the company's 73-year-old chief executive and
chairman who is also known as China's "Chief Butcher", was
issued 573.1 million new ordinary shares in October 2013, the
Yang Zhijun, an executive director in charge of investment,
merger and acquisitions and financing for WH Group, was issued
another 245.6 million ordinary shares. The combined share awards
to the two executives had an estimated fair value at the time of
their granting of $597 million, the filing showed.
The expense "represents recognition and reward for the
contribution to the acquisition of Smithfield by the directors,"
WH Group said in the filing, referring to Wan and Yang.
WH Group on Monday did not immediately respond to questions
on compensation for the two executives.
WH Group and shareholders are offering 3.65 billion shares
in an indicative range of HK$8.00 to HK$11.25 each, according to
a term sheet of the IPO seen by Reuters. At the top end of the
range, it would be nearly double the price for the October 2013
awards to Wan and Yang.
"This is very unusual - normally you would incentivise
management for overall long term performance and not simply for
executing a transaction- which is part of their job," said
David Webb, a Hong Kong-based corporate governance advocate.
"Especially given there's no evidence yet that the
transaction is value accreting."
"Let's hope they don't continue that kind of remuneration
policy after they go public," he added.
In three decades, Wan has turned WH Group, previously known
as Shuanghui International Holdings, from a small, loss-making
meat processor into the world's largest pork company. Along the
way, the tough negotiating Wan, who also sits on the National
People's Congress, China's legislature, has had the backing of
Goldman Sachs, Singapore state investor Temasek Holdings
and Wen Yunsong, or Winston Wen, son of former Premier
Wen Jiabao, among others, Reuters has previously reported.
Yang, 39, has spent more than 17 years with the company,
joining WH Group straight out of Sichuan University, where he
graduated with a degree in Russian literature and language.
(Additional reporting by Lawrence White)