Mohammad Abu-Ghazaleh
FRESH DEL MONTE PRODUCEAbout Mohammad Abu-Ghazaleh
- Chairman and Chief Executive Officer of Fresh Del Monte Produce Inc. since 1996; Director since 1996; age 83 .
- 2024 performance inflection: net income swung to $142.2M from a $11.4M loss in 2023; EBITDA rose to $273.9M from $124.1M, and the Board raised the quarterly dividend to $0.30 and authorized a $150M repurchase program in Q1’25 .
- Total Shareholder Return (value of $100) improved to $105.78 in 2024 (2023: $81.18; 2022: $78.74) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fresh Del Monte Produce Inc. | Chairman & CEO | 1996–Present | Long-tenured operator leading portfolio focus on pineapples, fresh-cut, and biomass initiatives; capital return via dividend increases and repurchases . |
| International General Insurance Co. | Chairman | Until 2020 listing | Financial oversight prior to public listing . |
| Bank Misr Liban | Director | 2007–2018 | Regional financial sector governance . |
| Jordan Kuwait Bank | Director | 2004–2011 | Banking sector governance . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Royal Jordanian Air Academy | Chairman | Current | Aviation training leadership; related-party ties noted below . |
| Arab Wings | Chairman | Current | Air charter services; related-party transactions with FDP . |
| Queen Noor Civil Aviation Technical College | Chairman | Current | Aviation education leadership . |
| Abdali Clemenceau Hospital (Amman) | Chairman | Current | $290M healthcare development oversight . |
| Clemenceau Medical Center (Beirut) | Founding Shareholder | Current | Healthcare investment . |
| United Cable Industries Company (Jordan) | Director | Current | Public company board role . |
Fixed Compensation
- Base salary: $1,200,062 in 2024; unchanged since 2004 .
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $1,195,385 | $1,200,046 | $1,200,062 |
Performance Compensation
- Structure: 84% of CEO’s 2024 target direct compensation is variable/at‑risk; all 2024 equity granted as PSUs tied to EBITDA and vesting over three years .
- Annual Incentive Plan (AIP): Target opportunity = 100% of base salary. 2024 metrics and outcome below. 2023 AIP paid at 30% of target amid ROA/EPS shortfalls .
AIP 2024 – Metrics, Targets, Results, Payout
| Performance Metric | Weight | Threshold | Target | Max | 2024 Actual | Corporate Achievement |
|---|---|---|---|---|---|---|
| Return on Equity (NI/Ave Equity) | 35% | 4.60% | 5.70% | 8.60% | 7.30% | 127% (vs 100%) |
| Earnings per Share | 45% | $1.81 | $2.11 | $3.17 | $2.44 | 116% (vs 100%) |
| Free Cash Flow ($M) | 20% | $101.0 | $126.0 | $189.0 | $203.0 | 150% (max) |
| Corporate Achievement Factor | — | — | — | — | — | 127% |
| Individual Performance Factor | — | — | — | — | — | 175% (cap 200%) |
| AIP Target & Payout | — | — | — | — | — | Target $1,200,000; Payout $2,667,000 |
Long-Term Cash Incentive Plan (LTIP)
- Design: 3-year cycles; CEO target = 100% of salary; metrics include Net Sales Growth (15%), ROE or ROA (45%), and Net Operating Cash Flow/Average Equity (40%) with threshold at 80% of target; 2023–2025 cycle uses ROA .
- 2022–2024 cycle earned 79% (ROE met at 100%; NOCF/Ave Equity at 86%; Net Sales Growth below threshold) .
| LTIP Cycle | Metric (Weight) | Threshold | Target | Actual | Earned |
|---|---|---|---|---|---|
| 2022–2024 | Net Sales Growth (15%) | 15.4% | 19.2% | 0.7% | 0% |
| ROE (45%) | 5.3% | 6.6% | 7.2% | 100% | |
| NOCF/Ave Equity (40%) | 8.6% | 10.8% | 9.3% | 86% | |
| Total Payout | — | — | — | 79% |
Equity Awards (PSUs)
- 2024 CEO PSU target grant value $4,000,000; performance goal 2024 EBITDA $261.0M; actual $275.4M; CEO earned 105.5% of target PSUs; vesting ratably over three years starting 3/1/2025 .
- 2023 PSUs (companywide) were forfeited due to EBITDA below threshold ($124M vs $270M target) .
| PSU Performance Year | Metric | Target | Actual | Earned | Vesting |
|---|---|---|---|---|---|
| 2024 (granted 3/1/2024) | EBITDA ($M) | 261.0 | 275.4 | 105.5% (CEO) | 3 equal installments 3/1/2025–3/1/2027 |
| 2023 | EBITDA ($M) | 270.0 | 124.0 | 0% | Forfeited |
2024 Realized Incentive Summary (AIP + LTIP components disclosed in SCT)
| Component | 2024 Amount ($) |
|---|---|
| AIP Payout | 2,667,000 |
| LTIP (2022–2024 cycle) | 948,000 |
Equity Ownership & Alignment
- Beneficial ownership: 14,939,299 shares (31.2% of outstanding). Includes 20,000 shares held by spouse and voting control over 9,786,258 shares via irrevocable proxies (no dispositive power over those proxy shares) .
- Pledged shares: 6,098,951 shares (includes 3,100,000 held by Amir Abu‑Ghazaleh) are pledged or in margin accounts; reduced vs March 2023 disclosures (pledging is a red flag for forced selling risk) .
- Outstanding unvested equity (12/27/2024): 2024 PSUs 179,609 (FV $5.941M), 2022 PSUs 36,101 (FV $1.194M), 2023 RSUs 16,176 (FV $0.535M); values at $33.08 stock price .
- 2024 stock vested: 93,554 shares (PSUs + RSUs) realized value $2,279,911 .
- Options: none outstanding or granted; no option exercises in 2024 .
- Ownership/retention policies: CEO must hold shares equal to 5x salary; executives must retain at least 50% of net shares until reaching guidelines; hedging prohibited and pledging restricted for shares subject to guidelines .
Beneficial Ownership (as of 4/14/2025)
| Holder | Shares | % |
|---|---|---|
| Mohammad Abu‑Ghazaleh | 14,939,299 | 31.2% |
Unvested Awards (12/27/2024) – CEO
| Award | Units | FV ($) |
|---|---|---|
| 2024 PSUs (earned) | 179,609 | 5,941,466 |
| 2022 PSUs (earned) | 36,101 | 1,194,221 |
| 2023 RSUs | 16,176 | 535,091 |
Employment Terms
- Executive Retention and Severance Agreement (2003):
- Termination without cause (no CoC): Lump sum = 2x (base + AIP at 100%); pro‑rata AIP at 100%; medical premiums up to 5 years or until re‑employed; two‑year non‑solicitation; confidentiality and non‑disparagement .
- Change‑of‑Control (double trigger): Lump sum = 3x (base + AIP at 120%); pro‑rata AIP at 100%; medical premiums up to 5 years; equity acceleration as applicable; excise tax gross‑up for any 280G taxes (not expected to apply currently as CEO is not a U.S. person) .
Potential Payments (Based on 12/27/2024 data)
| Scenario | Cash Severance | AIP Cash Bonus | Health Benefits | Equity Acceleration | Total |
|---|---|---|---|---|---|
| Termination (No CoC) | $4,800,000 | $1,200,000 | $69,100 | — | $6,069,100 |
| Termination Upon CoC | $7,920,000 | $1,200,000 | $69,100 | $7,670,779 | $16,859,879 |
Clawbacks
- Dodd-Frank compliant executive officer clawback for restatements, plus a broader company-wide recoupment policy for inaccurate financials or serious misconduct (3‑year lookback) .
Board Governance
- Dual role: Chairman and CEO; Lead Independent Director (Michael J. Berthelot) provides counterbalance with defined responsibilities (executive sessions, agendas, shareholder liaison) .
- Independence: Majority independent board; all Audit, Compensation, and Governance Committee members are independent; CEO not on committees .
- Board activity: 6 meetings in 2024; at least 75% attendance by each director; all directors attended 2024 AGM .
- Director compensation (non-employee): $90,000 cash retainer; committee fees ($15k Audit, $7.5k Comp, $5k Gov); chair/lead premiums; annual RSUs of ~$150,000 (2024 grant date May 7; vest May 7, 2025); CEO receives no additional director pay .
Compensation & Incentive Design – Alignment Assessment
- Pay-for-performance: 84% variable for CEO; 2024 AIP used ROE/EPS/FCF with clear thresholds and caps; 2024 PSUs tied to EBITDA with 3‑year vesting; 2023 PSUs forfeited when EBITDA missed threshold .
- Peer benchmarking: Compensation targets around 50th percentile vs peer group; independent consultant Willis Towers Watson engaged; no conflicts .
- Say-on-Pay outcomes: ~95% support at 2024 AGM; 92% support at 2023 AGM—indicates shareholder endorsement of program .
Related Party Transactions (Governance Red Flags)
- 2024: ~$427,000 of air charter expenses with Arab Wings (Chairman is Chairman; family members in leadership); ~$162,419 for a technology pilot with Polygon (Chairman and family hold equity interest) .
- 2023: ~$252,000 Arab Wings expenses (family equity interests disclosed) .
- Policy: Audit Committee reviews related party transactions; may terminate non‑approved transactions .
Performance & Track Record (Selected Metrics)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Income ($M) | 46.3 | 79.9 | 97.7 | (1.6) | 141.6 |
| EBITDA ($M) | 177.4 | 206.1 | 241.8 | 124.1 | 273.9 |
| TSR – $100 Base | 69.66 | 81.16 | 78.74 | 81.18 | 105.78 |
Additional 2024 highlights: gross profit $357.9M (vs $350.7M in 2023), dividend increased to $0.30 in Q1’25, $150M repurchase program approved Q1’25 .
Director/Board Service Detail – Mohammad Abu‑Ghazaleh
- Director since 1996; Class III term to expire at 2027 AGM; serves as Chairman & CEO (not independent) .
- Committees: None (Board committees fully independent) .
- Independence and structure: Lead Independent Director model in place due to combined Chair/CEO; majority independent board .
Risk Indicators & Red Flags
- Significant pledging: 6.10M shares pledged/margin (potential forced sale risk if collateral calls); however reduced vs March 2023 .
- Related party usage (e.g., Arab Wings; Polygon pilot) persists, though governed by policy .
- CoC excise tax gross‑up in CEO agreement (shareholder-unfriendly provision, albeit currently mitigated by non-U.S. tax status) .
- Concentrated control: Abu‑Ghazaleh family controls ~30.7% of shares; CEO holds irrevocable proxies to vote shares—can influence outcomes and deter takeovers .
- Legal/compliance: CARB settlement ($0.9M) for 2021 vessel emissions violations; risk disclosures include prior human rights allegations re: Kenya subsidiary and cybersecurity incidents (2023) .
Say‑on‑Pay & Compensation Committee Oversight
- Shareholder support: ~95% (2024) and 92% (2023) approvals .
- Independent oversight: Compensation Committee entirely independent; WTW as independent advisor with no conflicts .
- Peer group updated to reflect industry comparables (including Dole plc, Mission Produce, Inc.) and targets set around median .
Investment Implications
- Positive alignment levers: High proportion of performance-linked pay (AIP with ROE/EPS/FCF; PSUs with EBITDA); forfeiture of 2023 PSUs evidences rigor; strong 2024 profit/FCF delivery and shareholder returns (dividend raise and $150M buyback) support alignment and potential capital return continuity .
- Governance risks: Significant share pledging, related-party activity, dual role (Chair/CEO), and a legacy CoC gross‑up elevate governance discount and event risk (forced selling/optics) .
- Retention/change‑of‑control: Long tenure and substantial ownership reduce voluntary departure risk; however, double‑trigger severance and sizable equity acceleration imply meaningful CoC cost .
- Trading signals:
- Supply overhangs from multi‑year PSU/RSU vesting (2024 vested 93,554 shares; next PSU tranches vest 2025–2027) and pledged collateral dynamics could add episodic selling pressure .
- Offsetting: Active repurchase authorization ($150M) and higher dividend provide floor/support if executed .
Notes
- Form 4 insider trading analysis: Not included due to lack of Form 4 data in provided documents. The proxy’s vesting and pledging disclosures were used for assessing potential selling pressure .