Dive Brief:
- Grain trading giant Archer Daniels Midland handed interim CFO Ismael Roig a $35,000 monthly stipend and a one-time grant of restricted stock units valued at $1 million in association with being named as its temporary finance chief back in January, according to a Securities and Exchange Commission filing last week. The RSUs fully vest in March of 2025.
- Roig was appointed to the interim post after the Chicago-based company also revealed an ongoing internal investigation into certain accounting practices and placed CFO Vikram Luthar on administrative leave. Roig will forfeit the RSUs if he retires from the company before a “successor CFO” replaces him but will retain them if his retirement follows the appointment of a finance chief, according to the March 20 SEC filing.
- The pay boost signals it’s likely ADM and Luthar will part ways, Morningstar analyst Seth Goldstein told CFO Dive. “In my view, it is unlikely that the former CFO returns and it is more likely that we see the interim tag dropped from Roig’s title,” Goldstein said in an email response to questions.
Dive Insight:
Back in January, the one-two news punch of the internal accounting probe and the CFO’s forced leave rattled investors, with shares falling about 24% to close at $51.59 on Jan. 22, CFO Dive previously reported. The stock has since risen off those lows, closing Tuesday at $61.81 a share even as further fallout from the company’s accounting woes loom.
Earlier this month, ADM confirmed that it was cooperating with SEC and Department of Justice investigations into its accounting practices while also asserting it corrected certain intersegment sales and that those adjustments were not “material” to the company’s consolidated finance statements for any period.
An ADM spokesperson Tuesday declined to comment on the latest filing outlining Roig’s stipend. But Shawn Cole, president of the executive search firm Cowen Partners who is familiar with corporate governance matters, said Luthar and Roig’s future at the company will hinge on the outcome of the SEC and DOJ investigations.
“If the SEC finds fault CFO Vikram Luthar will have to be let go,” Cole said, noting that Roig’s experience at the company could make him a likely successor but only if the probe doesn’t have wide-ranging implications for the firm. “If the scandal is large enough, the board may feel it necessary to go with an outside hire for stability,” Cole said in an email response to questions.
Given that Ismael is based in Switzerland and ADM in Illinois, the stipend was likely awarded to help cover travel to and housing near the headquarters, Cole said. He also said the decision to make the stock vest over a year and tying it to the hiring of a new CFO is a smart move by ADM because it projects stability and helps retain Roig until next year, whatever happens. Roig, 56, has held a variety of global operational and financial leadership roles since joining ADM in 2004.
“The worst-case scenario is that you lose your interim CFO during a scandal. Projecting stability is important,” Cowen said.
