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Friday, March 29, 2024 | Back issues
Courthouse News Service Courthouse News Service

Shareholder Says ADM Gave Away the Store

WILMINGTON, Del. (CN) - Archer Daniels Midland failed to tell shareholders that its top executives could be paid $1.3 billion for 2009 - 74 percent of the company's net earnings for the year - "an amount so great that it not only constitutes waste, but it shocks the conscience," a shareholder says in a derivative complaint.

In his federal complaint, Herbert Resnik say ADM released its incentive compensation plan in a proxy statement before the shareholders' meeting in early November 2009.

Resnik claims the 14 defendant ADM directors misled shareholders by stating that executive officers' compensation in excess of $1 million would be tax-deductible for the company under its 2009 plan.

Under IRS rules, performance-based compensation over $1 million is tax-deductible, but because of defects, material misrepresentations and omissions in the proxy statement, ADM's shower of gold will not be tax-deductible, according to the complaint.

Resnik claims ADM violated Generally Accepted Accounting Principles, and did not adequately specify the performance goals, so there is no objective basis by which to determine the payments.

Using the information that ADM did disclose, Resnik says that each of the nine directors and five executive officers could get more than $90 million per year in incentive pay.

ADM touts itself as the world's largest processor of soybeans, wheat, corn and cocoa.

Resnik is represented by Chimicles & Tikellis of Delaware and Barrack, Rodos & Bacine of New York City.

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