Kettle Chips ex-boss repays bonus

Kettle Chips Diamond Foods manufactures Kettle Chips, Emerald nuts and Pop Secret popcorn

The ex-boss of the US maker of Kettle Chips has agreed to repay two years' bonuses after an accounting scandal.

Michael Mendes was suspended as chief executive of Diamond Foods in February, as was the head of finance Steven Neil.

An internal investigation uncovered irregularities, prompting the firm to restate its finances for 2010 and 2011.

Mr Mendes has formally left the firm on no severance pay and will repay bonuses from the two years worth $2.7m (£1.7m) along with 6,665 shares in the company.

The clawed-back bonuses will be deducted from a $5.4m payment that Diamond Foods is contractually required to make to Mr Mendes' pension fund.

The shares were worth $86,500 based on Diamond Foods' closing share price on Wednesday.

Diamond Foods Inc.

Last Updated at 29 Aug 2014, 15:57 ET Diamond Foods Inc. twelve month chart
price change %
27.61 +
+0.28
+
+1.02

However, the company's share price has fallen by 85% since its peak in September last year, just before claims first began to circulate that payments to walnut farmers were not being booked correctly.

At their peak, Mr Mendes' shares would have been worth $600,000.

An audit team brought in by Diamond's interim management found that certain payments to farmers and other items had been accounted for in the wrong years, artificially inflating the company's bottom line in 2010 and 2011.

Correcting the mistakes forced it to knock $17m off its 2010 pre-tax profits, and $39.5m off its 2011 figure, halving its reported profits over the two-year period.

It also lost Diamond a potentially lucrative agreement to buy the Pringles brand from Procter & Gamble.

As well as Kettle Chips, Diamond Foods also manufactures Emerald nuts and Pop Secret popcorn.

Mr Neil was also dismissed with no severance pay.

Brian Driscoll, the former head of Hostess Brands, took over as chief executive in May.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • Nigel Farage (left) and Douglas CarswellWho's next?

    The Tory MPs being tipped to follow Carswell to UKIP


  • A painting of the White House on fire by Tom FreemanFinders keepers

    The odd objects looted by the British from Washington in 1814


  • President Barack Obama pauses during a press conference on 28 August.'No strategy'

    Obama's gaffe on Islamic State reveals political truth


  • Chris and Regina Catrambone with their daughter Maria LuisaSOS

    The millionaires who rescue people at sea


  • Plane7 days quiz

    What unusual offence got a Frenchman thrown off a plane?


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.