Dive Brief:
- Diageo CEO Ivan Menezes saw a 48% pay cut, earning $6.2 million in the year ending in June compared to last year's $11.9 million package.
- The biggest cut came from the "performance related pay" portion of Menezes' salary. Last year, Menezes received $2.6 million for his hand in increasing Diageo's share price, but this year, that dwindled to $2,000. Also, last year, he received $4.2 million in long-term incentives pay but this year received only $555,000.
- The pay cut comes as, the past two years, Diageo has seen stagnant sales while the company deals with craft spirit and beer maker competition and key markets' slow economic growth, reports CNN Money.
Dive Insight:
Diageo has had a hard time in North America in particular, having reported a 3% decline in volume in its latest earnings report. However, Diageo has recognized U.S. consumers' taste for premium spirits and has made moves to capitalize on that preference shift.
This includes acquiring the remaining 50% stake in premium tequila brand Don Julio, which saw a 5% volume increase in North America last quarter. The company will also likely pay close attention to other premium brands in its portfolio, such as Buellit, a high-end bourbon, which saw a massive 32% jump in volume last quarter, while premium Ciroc volumes increased 4%.