The board of directors of Krispy Kreme Inc. has vaulted its top executive, Mike Tattersfield, into the upper levels of corporate executive compensation for at least one fiscal year.
The Charlotte-based company reported in its proxy regulatory filing Tuesday that Tattersfield received $23.65 million in total compensation in fiscal 2021 as its president and chief executive.
That’s almost 10 times the $2.69 million he received in fiscal 2020. Tattersfield became chief executive in January 2017.
Krispy Kreme returned to publicly traded status on July 1 after being bought for $1.35 billion by JAB Holdings and taken private in 2016.
It is the company’s first proxy filing in its second run as a publicly traded company. JAB Indulgence BV owns 44.8% of the company’s common stock.
By far the biggest compensation factor was Tattersfield receiving stock awards valued at $8.56 million on the date they were awarded, as well as stock option awards valued at $7.58 million.
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By comparison, Tattersfield was provided with $550,436 in stock awards in fiscal 2020.
The filing showed Tattersfield owns 1.23 million shares of company stock that vested were worth $19.68 million at $16.02 a share.
“We strongly believe in encouraging stock ownership by our named executive officers,” the board said in the filing. “To balance incentives to achieve short-term and long-term success, the compensation program for our named executive officers includes the grant of long-term equity-based compensation under the long-term incentive plan.
“We closely align the interests of our NEOs with those of our stockholders by paying a significant portion of total compensation in the form of long-term equity-based incentives.”
Tattersfield received at least $1.1 million in compensation in the other three main categories of base salary, incentive pay and all other compensation.
His base salary of $1.1 million represented a 10% raise. His incentive pay of $1.81 million was up 65%.
All other compensation soared from $18,169 in 2020 to $4.6 million in 2021.
It consisted mostly of getting $4.5 million in a cash settlement related to the company’s 2021 initial public offering.
He also received: $40,510 for interest imputed under U.S. federal tax law related to a pre-IPO loan from the company; $31,301 for tax gross up of company reimbursed expenses incurred to convert executive ownership programs loans to third-party loans; $10,689 for an auto lease; home incidentals of $4,267; $3,578 for personal air travel expenses; home allowance of $3,214; $2,838 for group life insurance; and $983 for personal hotel expenses.
Krispy Kreme reported a $14.8 million loss for fiscal 2021, while adjusted net income was $66.7 million when factoring in $98.8 million in revenue from the exited legacy wholesale business.
It did turn its first quarterly profit in the fourth quarter at $4.3 million.
Tony Plath, a retired finance professor at UNC Charlotte, said he supports pay-for-performance “to motivate senior managers in publicly held companies.”
“But the way that works is first you show me the performance, and then I show you the money. Taking Krispy Kreme public back in July at $17 and then watching it fall to $13.61 (at start of trading Tuesday) has that ordinal direction quite backward.”
Krispy Kreme reported the CEO pay ratio was $867-to-$1 for Tattersfield compared with the median global employee compensation of $27,278.
“The compensation elements and pay levels of our employees can vary dramatically from country to country based on market trends, cost of living, and cost of labor,” the company said in the filing.
“These factors, along with fluctuations in currency exchange rates, impact the median employee compensation and the resulting ratio.”
The surge in the value of stock and stock-option awards also drove up 2021 compensation for Krispy Kreme’s four other named executives.
Joshua Charlesworth, chief financial and chief operating officer, received $800,000 in base salary that was unchanged, $960,000 in incentive pay, stock- and stock-option awards valued at $4.6 million, $1.47 million in all other compensation for total compensation of $7.77 million, compared with $1.95 million in 2020.
Matthew Spanjers, chief growth officer, received $525,000 in base salary that was unchanged, $630,000 in incentive pay, stock- and stock-option awards valued at $4.5 million, all other compensation of $1.38 million for total compensation of $7.08 million, compared with $1.45 million in 2020.
Andrew Skehan, president of U.S. and Canadian operations, received $650,000 in base salary that was unchanged, no incentive pay, stock- and stock-option awards valued at $3.5 million, all other compensation of $237,839 for total compensation of $4.68 million, compared with $1.83 million in 2020.
Catherine Tang, chief legal officer and corporate secretary, was named for the first time in 2021. She received $500,000 in base salary, $525,000 in incentive pay, stock- and stock-option awards valued at $2.6 million, all other compensation of $272,221 for total compensation of $3.92 million.
Krispy Kreme will conduct its 2022 shareholders meeting virtually at 10 a.m. May 17. There are no shareholder proposals on the agenda.
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