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Beerworkers Archive


Post date: 03/11/2012 - 03:19

It Is Not About Quality Beer It Is About Money For A Select Few

Million Bonus for the Boss

While it went unmentioned in official discussions of 2011 earnings that were released on Thursday, Anheuser-Busch InBev last year paid down enough debt to trigger huge stock options for a few dozen top executives at the brewer, according to data included in their annual report.

Million Bonus for the Boss

While it went unmentioned in official discussions of 2011 earnings that were released on Thursday, Anheuser-Busch InBev last year paid down enough debt to trigger huge stock options for a few dozen top executives at the brewer, according to data included in their annual report.

The options, created in the wake of InBev's takeover of Anheuser-Busch in late 2008, are today worth $1.57 billion in stock, divvied up among roughly 40 key executives at the company. They were set to vest when the company's debt fell to less than two-and-a-half-times earnings before interest, tax, depreciation and amortization (EBITDA). As of Dec. 31, 2011, A-B InBev's ratio of debt to EBITDA was 2.26, less than half what it had been three years earlier.

That fact is worth approximately $182 million in stock to chief executive Carlos Brito, who received 3.25 million shares at 10.32 euros, or $13.52 at current exchange rates, in the deal. A-B InBev closed Friday at $69.56 per share. To qualify, Brito and other recipients must stay with the company until 2014, at which point they can sell half of the stock. The other half they can sell if still employed there in 2019.

The executives "were identified as key for a successful integration of A-B's business, to underpin the rapid deleveraging of the group, in the midst of unprecedented economic distress and a historic financial crisis," the company said in a statement. "The vesting of the options was therefore linked to a performance test related to the company's deleveraging."

About 40 executives in all were awarded the options. No full list has ever been published, but regulatory filings that Brito is eligible, as are at least two former A-B chiefs who stayed on after the takeover.

David Peacock, A-B's post-merger president, was due shares now worth roughly $40.5 million, until he stepped down last month, before the 2014 trigger date. It's unclear if Peacock received other compensation when he left. David Almeida, vice president of sales in North America, has remained with the company and also received stock options worth roughly $40.5 million.

The company has reduced its total debt by more than $20 billion since the end of 2008 - from $56.6 billion to $34.7 billion - and lowered its debt-to-EBITDA ratio by more than half. It's done this through sharp cost cuts, including eliminating hundreds of jobs in St. Louis, an equity offering and the sale of some breweries and other assets.

The options have also been made considerably more valuable by a surge in A-B InBev's share price, which has has grown 189 percent since the takeover closed in Nov. 2008, compared to the 68 percent growth of the S&P 500 index. Their true value won't be determined for another two years, when they're eligible to be sold starting in 2014.