Heinz Pays Hees $9.2m, Ex-CEO Gets $110.5m

HJ Heinz Co., the ketchup maker taken private by 3G Capital and Warren Buffett’s Berkshire Hathaway…

HJ Heinz Co., the ketchup maker taken private by 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), paid Bernardo Hees $9.2 million in his first year as chief executive officer.

The package includes an incentive payment of $1.2 million, $7.3 million in option awards and $561,538 of salary, Pittsburgh-based Heinz said today in a regulatory filing. New Chief Financial Officer Paulo Basilio received $3.8 million.

Hees joined in June from Burger King Worldwide (BKW) Inc., the fast-food chain owned by Jorge Paulo Lemann’s 3G. Hees replaced William Johnson, CEO since 1998, who got $110.5 million in the eight months ended Dec. 29. Hees has closed factories and consolidated offices as part of a plan that eliminated about 3,400 jobs to boost profit.

“Results so far are encouraging,” Buffett, 83, wrote in a letter to investors of Omaha, Nebraska-based Berkshire published March 1. “Earnings in 2014 will be substantial.”

Berkshire and 3G each paid about $4.3 billion for equity in the company, and Buffett’s firm provided an additional $8 billion for a preferred stake with a 9 percent annual interest payment. The arrangement, in which Berkshire provides financing and a partner oversees operations, could be a “template” for future deals, the billionaire wrote in the letter.

Buffett opted to receive no compensation for serving on the ketchup maker’s board, the filing shows. Alexandre Behring got $443,000 for his role as chairman, while other directors including Lemann, 74, got $221,500 each.

Johnson’s package includes a $48.8 million payment tied to equity awards that were outstanding when the deal was completed. Heinz said last year Johnson could receive “golden parachute compensation” including $56 million in cash, equity, bonuses and other benefits.

Michael Mullen, a spokesman for Heinz, said the job cuts are part of a continuing plan to improve the company.

“The difficult actions we are taking now will result in Heinz becoming a stronger and more nimble organization that is better-positioned to become one of the most efficient food companies in the world,” Mullen said in an e-mail.