Less Responsibility, More Pay: Odd Story of Mondelez CEO Irene Rosenfeld

The bad rap on old Kraft and so many other giant food and consumer products companies has been the paltry growth in sales. Irene Rosenfeld, CEO of old Kraft, solved that problem, maybe, by spinning off the company’s slow-growth North American grocery business, which kept the Kraft (KRFT) name, leaving a more international and faster-growing snack food company, Mondelez (MDLZ).

Guess which one Rosenfeld chose to be the CEO of? Of course, it was Mondelez, maker of Cadbury chocolate, Nabisco and Oreo crackers and cookies, Tang drinks and Trident gum. Company documents, explaining the new Mondelez, repeatedly use the terms “top-tier growth,” “fast-growing” and “faster-growing.” Can I get an amen for growth?

Given growth was the problem and she got rid of the slow-growing stuff, one wonders if Rosenfeld’s job didn’t just get a lot easier. Oh sure, we’re certain she’s still putting in long hours, enduring grueling travels and exerting a Titanic will to wring the most out of Mondelez operations. But she’s now running a smaller company, overseeing fewer people and, one suspects, has a higher level of confidence in the businesses she carved out to manage.

Company size counts in compensation. In the 2010 Kraft proxy, the company said it compares its executive compensation to companies with similar “breadth, complexity, and scope of responsibility.” The first two of those criteria undeniably declined after the spinoff.

And yet, Rosenfeld hauled in a roughly 30% increase in pay for 2012, and one suspects the Mondelez board, also enjoying a relative holiday from investor demands for elusive growth, will keep the CEO is clover. She brought in $28.8 million for 2012, three quarters of it running crummy old Kraft and the final quarter at the helm of Mondelez. That’s up from $21.9 million in 2011. One can break down the elements of pay, and certainly some are, if not one-time, irregular, but experience suggests the deeper one dives into the disingenuous text of proxy statements the more cynical one becomes.

By the way, the old, slow-growth stuff, namely new Kraft, is smoking the “faster-growing” Mondelez so far, as seen in a stock chart. But it’s early yet.

MDLZ Chart

MDLZ data by YCharts

We’re not Irene Rosenfeld haters here, and this article could have easily focused on some either CEO who spun off the hard-to-manage or iffy operations; hello Miles White at Abbott (ABT). But Rosenfeld’s as good as any example of this particular executive compensation rationale being turned on its head.

Jeff Bailey, The Editor of YCharts, is a former reporter, editor and columnist at the Wall Street Journal and New York Times. He can be reached at editor@ycharts.com.



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