Elders CEO gets $1.5m lift in pay and bonuses to stay on and ditch retirement plans

Amid a volatile time for agribusiness, Mark Allison has agreed to ditch his retirement plans and stay on, steering the ASX-list farm services and rural property giant.

Elders chief executive Mark Allison will ditch his retirement plans after the board convinced him to stay on and hoisted his fixed salary by more than $400,000 and threw in a $1m bonus if he stays on until 2025.

Mr Allison announced his retirement last November, having joined the company in 2009, initially as chairman before becoming managing director in 2014.

His impending departure from the company triggered a near halving of its share price. But after junking his plans, Elders shares jumped 2.7 per cent to $6.55 on Monday.

Mr Allison – who had been looking forward to spending more time on his passion of singing and songwriting – said he was “delighted” to stay on at Elders.

“While I had been intending to retire from Elders, it was never my intention to cease serving the interests of Australian agriculture, and this country’s farmers, after my departure,” he said.

“As a result, I was very pleased to accept the board’s invitation to continue in my role and am energised by the prospect of building on the hard work we have already done at Elders during my tenure.”

In the past eight months, the board has completed a “comprehensive domestic and international search” for Mr Allison’s potential replacement. As late as three weeks ago, chairman Ian Wilton said: “The process of identifying a suitable successor to Mark Allison as CEO of Elders is continuing. The board expects to make a further announcement in July”.

But on Monday, Mr Wilton said the company was “very fortunate” that Mr Allison had agreed not to retire.

“This is an ideal outcome for Elders, its customers, employees and shareholders. Mark’s deep experience and understanding of Elders and agriculture, both domestically and globally, makes his continued service ideal for Elders.”

Mr Wilton said the company would continue to run a CEO “succession program” to develop suitable candidates when Mr Allison finally decides to depart.

Elders will lift Mr Allison’s base pay to $1.5m. His fixed remuneration was almost $1.1m last year.

He will also be paid $500,000 cash if he remains employed at Elders on June 1 next year, and another $500,000 if he stays on until June 1, 2025.

Elders boss Mark Allison has agreed to ditch his retirement plans and stay on, steering the farm services and rural property giant. Picture: Martin Ollman/NCA NewsWire

It comes amid a volatile time for Elders. The ASX-listed agribusiness giant is expecting to deliver earnings before interest and tax of $180-$200m. At the midpoint, that represents an 18.1 per cent fall on last year but a 13.8 per cent gain on 2021.

Elders also cut its interim dividend from 28c to 23c a share last month. In the six months to March 31, the company’s profit slumped 46 per cent to $48.84m.

But Mr Allison said at the time that the result was “satisfactory given the market and seasonal conditions, especially in the flood impacted” first quarter”. Overall interim revenue firmed 9 per cent to $1.66bn.

“The 2022 financial year was unusual with EBIT greater in the first half than the second, primarily because clients brought forward their winter crop procurement due to supply concerns and rising input prices,” he said.

“The freeing up of supply chains, lower freight costs and more sustainable fertiliser prices are a great benefit to the agricultural industry but make comparison between HY23 and HY22 challenging.

“Consequently, Elders has taken the decision to provide full-year guidance to reinforce our expectation that second half earnings are likely to exceed the first half, a more typical earnings profile for Elders. We look forward to the second half given the strong winter crop outlook.”

Mr Allison described the agricultural industry as volatile, citing “softened livestock trading conditions, weaker crop input prices and unseasonably wet weather.”

Originally published as Elders CEO gets $1.5m lift in pay and bonuses to stay on and ditch retirement plans