Dive Brief:
- Scotts Miracle-Gro CFO Matthew Garth will depart from the lawn care company effective Dec. 31 as part of a broader leadership shift, the company announced in a Tuesday press release. Vice President and Treasurer Mark Scheiwer will step in as interim CFO and chief accounting officer effective Jan. 1, 2025 while the company commences a search for a permanent successor, looking at both external and internal candidates, the company said.
- As well as the CFO swap, the Marysville, Ohio-based company also announced Chris Hagedorn — the son of CEO and Chairman James Hagedorn — will take on the role of EVP and the newly-created position of chief of staff to the CEO, according to a securities filing. The younger Hagedorn most recently served as division president for Scotts’ Hawthorne Gardening Company subsidiary.
- The executive leadership changes come as the company looks to re-optimize its balance sheet, a strategy that includes executing a “turnaround” for its cannabis-focused Hawthorne subsidiary, where profitability has dragged, CEO Jim Hagedorn said. “We’re poised to drive further expansion in the consumer segment while maintaining our focus on deleveraging and optimizing the balance sheet,” the CEO said in a statement included in the Tuesday release. “The profitability potential of Hawthorne will continue to improve as we execute its turnaround.”
Dive Insight:
Long-time company alum Scheiwer first joined the lawn care company in 2011 as its VP and corporate controller, before taking on the role of VP, Hawthorne finance lead for the subsidiary in 2021, according to his LinkedIn profile. He was named to his current role as treasurer in December 2022.
Scheiwer will receive an annual base salary of $550,000 in association with his interim appointment and will be eligible for a target incentive of 90% of his base salary, according to the company’s annual filing with the Securities and Exchange Commission. He will also be eligible for an annual long-term incentive of $600,000, the company said.
The interim CFO appointment represents the third pivot in financial leadership for the 155-year old gardening company in the past few years. Garth will be stepping down two years after he assumed the top financial seat in 2022 — replacing interim CFO David Evans, CFO Dive previously reported. In association with his appointment, Garth inked a compensation deal which included a $1.45 million bonus comprised of $700,000 in cash as well as equity grants.
In association with his departure, Garth will receive severance benefits including pay equal to 24 months of his base salary and an amount “equal to two times Mr. Garth’s Target Bonus Opportunity for the fiscal year ending September 30, 2025,” the company said in its annual report with the Securities and Exchange Commission, also filed Tuesday.
According to the company’s most recent proxy statement filed Dec. 13, 2023, Garth’s received total direct compensation of approximately $3.1 million, including a base salary of $725,000 and an annual bonus of $906,250.
Like Garth, who took the seat at a time when Scotts was experiencing post-pandemic sales slumps in the face of normalizing demand, Scheiwer is stepping into the interim CFO post as the gardening company continues to face challenges, most notably in its cannabis-focused subsidiary.
Hawthorne offers hydroponics, lighting and other growing supplies, according to its website. Over the past several years, the company has bet bigger and bigger on the cannabis sector, endorsing legalization efforts and moving to expand Hawthorne with mergers and acquisitions in the space, according to a 2022 report by CNN.
However, the segment has continued to see sales decline. While net sales jumped 11% for the company’s most recent quarter ended Sept. 30, sales for its cannabis segment plummeted 46% compared to the prior year period, with Hawthorne recording nearly $81 million in sales compared to almost $150 million in Q4 2023, Scotts said.
Scheiwer and the rest of the company’s reshuffled leadership team will look to target a turnaround for the segment and focus on executing a three-year growth plan for Scotts, CEO Hagedorn said Tuesday. As part of the leadership shifts, Chief Operating Officer Nate Baxter also took on the role of president, which was previously held by CEO and Chairman Hagedorn, the company said.
Christopher Hagedorn, meanwhile, will continue to lead the business’ Hawthorne subsidiary, which focuses primarily on cannabis in the newly-created role of chief of staff, he will oversee company strategy and corporate affairs, which include responsibilities for corporate communications and government relations, the company said in the Tuesday release.
The company is “poised to drive further expansion in the consumer segment while maintaining our focus on deleveraging and optimizing the balance sheet,” CEO Hagedorn said in the Tuesday release.
Scotts Miracle-Gro did not immediately respond to requests for comment.
