Freedom Foods' new CEO is milking it

Aug 9, 2020 – 7.29pm - Tom Richardson (Rear Window)

Freedom Foods is in a world of pain after revealing to investors that some $60 million worth of stock in its warehouses was out of date. The revelation of this operational and governance disaster in June prompted a trading halt and led to the resignation of both its CEO and CFO. And it means PwC, Ashurst and Moelis are now crawling all over its business, trying to figure out what went so wrong.

But this is, at the end of the day, a family company, 54 per owned by the dynasty of billionaire Tony Perich. Last week, Freedom installed Michael Perich as its interim chief. That'd be Tony's nephew, the son of his brother and fellow Freedom director Ron.

Of course, even an insider can't be expected to work for free. Or even for what the last guy was getting.

For as long as he's there, Michael Perich will receive a basic cash salary of $750,000 a year. That's a 36 per cent bump rise on the $551,290 prior chief executive Rory Macleod received in FY19. And that's just base pay: the company said Perich is to have additional incentives arranged at a later date as part of a broader review into the company's remuneration and incentive framework.

So much for COVID-19 crushing salary expectations everywhere. Though having one's father and uncle on the board doesn't hurt.

Elsewhere, the struggling business is hunting for cost savings. Its June 25 mea culpa said it was making 61 positions redundant.

The news comes as minority shareholders already nervous over Freedom's corporate governance are about to be asked to tip more money into the business. At least the new CEO can't be accused of having no skin in the game.