Hain Celestial’s CEO brews delicious deal…

Irwin D. Simon’s timing is admirable… maybe practically impeccable. Simon, you see, is the Founder, President, CEO and Chairman of the Board of The Hain Celestial Group, Inc. (HAIN), the Melville, New York-based company that sells dozens of brands including Celestial Seasonings teas and Hain Pure Foods. Simon — who founded the company in 1993 — is now in his mid-50s, and he just inked a lucrative new deal to remain at the helm of Hain Celestial until the end of June, 2017.

And here’s where the lucky timing comes in. Since last year, Hain Celestial’s stock price has soared, with last Friday’s closing price of $56.32 up nearly 66% from its trading price a year ago. And since Simon’s most recent employment agreement was set to expire June 30, 2012 (according to the October, 2011 proxy), he got to renegotiate his employment agreement at the same time that the company’s fortunes were riding high.

The details of Simon’s new employment agreement are summarized in this 8-K that the company filed at 5:20 p.m. last Friday afternoon. For starters, the new agreement will pay Simon a base salary of $1.6 million — a hefty raise from his prior base salary of $1.4 million. And it also increased the maximum annual incentive award that Simon can earn; now he can earn up to 225% of his base salary (which translates to $3.6 million) if the Compensation Committee determines that he merits such an award. The long-term incentive compensation went up, too. Assuming he meets the criteria, Simon could earn an award from $4 million to more than $5.3 million.

Hain Celestial’s board also gave Simon a grant of 400,000 shares of restricted stock for signing the new agreement. The shares will be both performance- and time-based, and the filing explained that a quarter of the shares will vest in equal amounts annually over a five year period, so long as the closing price of the stock meets certain price-per-share goals for 45 consecutive trading days. Since the goals are $62.50, $72.50, $82.50 and $100, we certainly can’t say that the board settled on artificially low targets.

And as far as stockholders are concerned, they’re probably cheering Simon on and savoring the healthy numbers in their portfolios, especially if they sit down to peruse them over a nice cup of tea.

Image source: Cup of tea with mint and lemon, via Shutterstock


What’s brewing in the SEC filings of the companies that you hold? At footnotedPro, our subscription service exclusively for financial professionals, we identify early warning signs and hidden red flags well in advance of the market. For more information, or to inquire about a trial subscription, please email us.