TODAY'S PAPER
52° Good Morning
52° Good Morning
Business

Hain Celestial will hire successor to founder, CEO Irwin Simon

Irwin Simon, founder and CEO of the Hain

Irwin Simon, founder and CEO of the Hain Celestial Group in Lake Success, will exit when a successor is found. He will get a cash separation payment of $34.3 million in a lump sum. Credit: Uli Seit

Hain Celestial’s chief executive officer is stepping down 25 years after founding the organic and natural products company.

Irwin D. Simon will resign from the Lake Success-based company the day before his successor’s first day on the job, and that person will be hired by the board of directors, according to a form 8-K that The Hain Celestial Group Inc. filed with the U.S. Securities and Exchange Commission on Monday.

“When I founded the company 25 years ago, one of my goals was to educate and change the way the world eats and lives through a relentless focus on providing organic, natural and better-for-you products to consumers. I am incredibly proud of the company we have built,” Simon said in one of two statements Hain issued Monday.

The company did not respond to requests for further comment.

Simon, however, told J.P. Morgan analyst Ken Goldman that the decision to leave was his and if it weren’t, he would have fought it, according to a note to clients from Goldman.

“I’ve been doing this for 25 years; I’ve probably done 100 earnings calls. There are a lot of other things out there I want to do,” Goldman quotes Simon as saying.

After he departs as CEO, Simon will receive a cash separation payment of $34.3 million in a lump sum, life insurance and disability insurance until the third anniversary of his exit, and health benefits, according to the SEC filing.

After his replacement is hired, Simon will become nonexecutive chairman of the board, Hain said. The title refers to a chairman who is not an employee of the company.

He’ll serve in that capacity for 90 days, which can be extended by Simon and the board, and he’ll receive a $100,000 annual cash retainer, according to the filing.

He owned 1.8 million shares of Hain stock, or 1.66 percent, as of Dec. 13, according to Bloomberg.

Hain’s most recent proxy statement, dated Nov. 16, said Simon was 59 years old.

The company’s products, sold in more than 70 countries, include Celestial Seasonings tea, Sensible Portions snacks, Terra chips, Rudi’s Organic Bakery breads, Earth’s Best baby food and The Greek Gods yogurt.

Simon’s exit will mark the end of an era, since the company began when organic and natural foods were still nontraditional products but they have since gone mainstream, Goldman wrote.

He also noted that “this is happening a) soon after the most challenging period in company history and b) when an activist investor (Engaged Capital) has taken a 10%+ stake.”

Shares of Hain Celestial closed at $29.89 Monday, up 0.5 percent from Friday’s close. A year ago, Hain shares closed at $33.63, and in the summer of 2015 they traded for more than $68.

Hain’s stock fell sharply in August 2016 after it said it would delay its annual earnings report because of accounting issues. Those issues have since been resolved.

But Hain’s U.S. operation recently has lagged behind the company’s overseas units.

In the company’s third quarter of fiscal 2018 — the three-month period ended March 31 — the company’s U.S. sales fell 3 percent to $281.1 million, while sales in the United Kingdom increased 19 percent to $238.3 million.

Net income was $12.7 million, or 12 cents a share, in the third quarter, a decline from the $31.3 million, or 30 cents a share, in the same period last year.

The company blamed the disappointing results on increasing freight, commodity and labor costs, among other factors.

Hain has cut more than 700 products to streamline its portfolio, it told analysts in May.

Also, the company announced in February that it wanted to sell its organic poultry line, Hain Pure Protein, as part of its plan to focus on driving growth of its core 11 brands and top 500 products.

About The Hain Celestial Group Inc.

Headquarters: Lake Success

Employees: 7,825 full-time workers as of June 30, 2017

What it does: Hain is an organic and natural products company with operations in North America, Europe and India.  Irwin D. Simon founded it in 1993 as Hain Food Group but it became Hain Celestial Group after buying Celestial Seasonings in 2000.  

More news