Sweet transition for Smucker scion…

August 22, 2011

Last week, Timothy P. Smucker gave up his title as co-Chief Executive officer of the J. M. Smucker Company (SJM). The move – which the company announced in early March – comes at a time when the company is trying to win back customers who balked at price increases driven by inflation in commodity prices.

Smucker is not leaving the family business, though. He’s staying on as the Chairman of the Board of Directors, a title he has held since 1987. The day-to-day captain of the ship will be the other co-CEO, Timothy Smucker’s brother, Richard. From now on, the board wants Timothy Smucker to focus his efforts on “corporate strategy, succession planning, serving as an ambassador of the Company with employees and other constituents, and other matters as requested by the Company’s Board of Directors,” according to an 8-K filed late last Friday afternoon.

In exchange for the reduced workload, Timothy Smucker is taking a pay cut from $853,000 to $600,000 per year. He will also see a “proportionate reduction” in his long-term and short-term incentives, both of which are based on a percentage of his base salary.

Timothy Smucker will still be getting a big check from the company in a few years, thanks to his participation in the Top Management Supplemental Retirement Plan (the —SERP). The filing explains that Smucker will get the additional retirement benefits when he stops working:

“…Mr. Smucker will receive a payment under the SERP of approximately $11.4 million, which is approximately the same amount he would have received under the SERP had he retired on the Transition Date. The SERP amount will generally be paid 3 years after separation of service or no later than April 1 of the calendar year after Mr. Smucker reaches age 70. Mr. Smucker will not receive any severance benefits in connection with this transition.”

Smucker is 67, according to the proxy filed last month, so the company has a little time before his 70th birthday. That gives him a chance to turn some of his strategic thinking to recovering some of Smucker’s coffee revenues. According to the 8-K earnings report that Smucker released August 18, the company raised coffee prices four times since May, 2010, only to see the segment’s sales fall by 8 percent in the first quarter of 2012. The coffee division is now the bailiwick of Timothy’s son, Mark T. Smucker, who became president of the U.S. Retail Coffee division on May 1.

Timothy Smucker may be scaling back on his responsibilities for the company, but he has some other commitments on his plate. According to the 2011 proxy, Smucker is a director and a member of the audit committee of privately-held Hallmark Cards, Inc., the vice chairman of the GS1 Management Board, a director and member of the executive committee of the Grocery Manufacturers Association, and a director of The Consumer Goods Forum.

With all that going on, it’s no wonder he has decided to spend a little less time thinking about jellies and jams.

Image source: Eddie~S via flickr

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