Ahold to reclaim bonus payments

Faced with a new shareholder revolt over the exact role the previous management team played in the widespread fraud at the company last year, Dutch retail group Ahold yesterday pledged that it would reclaim part of the bonuses paid to board members on the basis of the erroneous accounts.

As we reported yesterday, Ahold is keen to avoid a further court showdown with the Dutch shareholders' association VEB over the accounting irregularities, with CEO Anders Moberg pleading for calm and the opportunity to look to the future rather than the past.

One of VEB's chief concerns is that the role played by the former Ahold management in the fraud - either their involvement in it or their failure to detect it - has not been adequately assessed, and the announcement by Ahold spokesman Walter Samuels could be seen as a move to placate the shareholders' association by specifically targeting former board members.

According to a report from Dow Jones, Samuels did not give details of which particular board members were being targeted, but he did say that the bonuses were likely to be repaid without protest by the people involved.

Samuels also declined to comment on the exact sums involved, saying only that the reductions would be in line with the restated accounts for 2000 and 2001, the years for which the bonuses were paid.

The move will not necessarily be confined to previous Ahold board members, since a number of the current management team were also already on the board at that time, including Jan Andrea, responsible for Europe, Theo de Raad in charge of South America and Asia and Bill Grize, who leads the US retail operations, according to Dow Jones.

But at the present time there are no plans to reclaim the bonuses paid to the two top executives most deeply implicated in the fraud - former CEO Cees van der Hoeven and CFO Michiel Meurs. Both men are currently involved in arbitration with regard to their severance packages and until this issue has been resolved it would be hard to claim back their share of the bonuses, the report suggests.

Ahold has been through a torrid 12 months, but its latest trading statement showed that if it is not yet fully on the road to recovery, the worst at least seems to be behind it.

Moberg's recovery plan for the group is already in place, and 2004 is likely to be a year of significant disposals for the Dutch group - not least in Spain - and of greater focus on core activities, but there is still a question mark over whether this will be enough.

The VEB is clearly concerned that not enough has been done to investigate the role of Ahold's senior management in the accounting fraud at the US Foodservice unit, and until there is a complete change at the top of the company - and all links with the past are completely severed - all the benefits gained from Moberg's restructuring plan will count for little.

The new CEO wants to look to the future rather than the past, but with a €1 billion hole in the company's accounts to fill, shareholders are unlikely to agree until they feel that justice has been done and that none of the senior management at the time of the fraud are allowed to benefit from it.