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HONG KONG, April 14 (Reuters) - 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 filing showed.
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)