Nutrien President and CEO Mayo Schmidt speaks at a state of the province address in Saskatoon, Sask., on Oct. 25, 2021.Liam Richards/The Canadian Press
Agricultural giant Nutrien Inc. NTR-T paid a combined US$32.7-million to former CEOs Chuck Magro and Mayo Schmidt since the beginning of 2021, illustrating the high cost of the company’s executive-suite revolving door.
The Saskatoon company said it paid Mr. Magro US$18.48-million in 2021, including US$8.09-million in severance and consulting payments after it fired him in April. The company said it paid his successor Mr. Schmidt, who had previously been serving as the company’s chairman, US$9.38-million in 2021, and another $4.83-million in severance in January when it fired him. The details are included in the company’s proxy circular to shareholders.
Mr. Magro became chief executive of Indianapolis-based seed-and-chemical company Corteva Inc. in October, and Nutrien says it got a payment of US$18.7-million from Corteva as compensation for allowing Mr. Magro to work for another agricultural company in contravention of his restrictive employment covenants.
On Jan. 4, Nutrien said Ken Seitz, formerly the head of its potash fertilizer operations, would become its interim president and CEO.
The human resources and compensation committee of Nutrien’s board “remains satisfied the executive compensation program at Nutrien has a sound governance structure and is in line with those of our peers,” Keith Martell, the committee’s chair, wrote to shareholders in the circular.
The Globe and Mail reported that both Mr. Magro and Mr. Schmidt left after they clashed with the board of directors.
Mr. Magro left in April of last year after advocating for Nutrien to sell its low-margin retail fertilizer business in order to free up cash for a joint venture with Australia’s BHP Group Ltd. on the multibillion-dollar Jansen potash project in Saskatchewan. Nutrien’s board was loath to sell the retail business, which it viewed as much steadier financially than the volatile potash business. The strategic face-off cost Mr. Magro his job, and catapulted Mr. Schmidt from chairman into the CEO role.
Once ensconced in the top executive position, Mr. Schmidt struggled to keep the peace with subordinates who had been loyal to Mr. Magro, The Globe reported. Mr. Schmidt’s hands-off, imperious style, and a jarring change in corporate culture that occurred after he took the job caused friction internally at Nutrien. In addition, The Globe reported that Mr. Schmidt did not perform well in marketing meetings with investors and that added to disgruntlement at the board level. In early January, Nutrien announced that Mr. Schmidt was out as CEO after just eight months.
The severance amounts do not account for the value of unvested stock awards. Both men have the ability to retain stock options and other share-based awards for some time after their departure, according the terms of the various stock plans Nutrien maintains. (The company has legacy plans from Agrium and Potash Corp. of Saskatchewan Inc., the two companies that merged to form Nutrien.)
Nutrien valued Mr. Magro’s outstanding share and option awards at US$45.66-million as of Dec. 31, when Nutrien traded at US$75.20 on the New York Stock Exchange. The company valued Mr. Schmidt’s awards – given in May, 2021, and included in his total compensation for the year – at US$9.98-million.
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