Diamond Foods taps ex-CEO for $2.7 million
By MATEUSZ PERKOWSKI
The Diamond Foods snack company said it will "clawback" more than $2.7 million in bonus payments to its former CEO, who resigned from the firm after an accounting scandal.
Michael Mendes, who had served as Diamond's CEO since 1998, resigned on Nov. 19 but had been placed on administrative leave without pay in April.
Mendes expanded the company's snack food business and guided its transition from a farmers' cooperative to a publicly traded corporation in 2005, but ran into trouble last year when the company was accused of incorrectly reporting walnut payments as a way to inflate profits.
The problem was first reported by an investment research firm and an internal investigation later concluded that $80 million worth of walnut payments were accounted for later than appropriate, prompting a restatement of Diamond's financial reports.
The company is being investigated by the U.S. Securities and Exchange Commission and is also subject to lawsuits that claim it committed securities fraud.
Diamond Foods recently announced Mendes "will not be paid any severance in connection with his resignation" and will return $2.7 million in bonuses and stock awards from 2010 and 2011, with the money deducted from his $5.4 million in retirement benefits.