Greencore to hire more UK nationals after Brexit

A third of shareholders at the Irish food group voted against its remuneration policy

Greencore  chief executive Patrick Coveney. Photograph: Dara Mac Dónaill

Greencore chief executive Patrick Coveney. Photograph: Dara Mac Dónaill

 

Greencore chief executive Patrick Coveney has said the Irish food giant will gradually begin to increase the percentage of British nationals in its workforce with the UK expected to leave the European Union in the coming days.

Greencore operates in both the Irish and UK markets but does most of its business in the UK where it supplies grocers and other retailers, as well as all of the major supermarkets. It manufactures about 717 million sandwiches every year.

The company employed 11,682 people last year, down from 14,634 the year before. Currently, about 45 per cent of its UK-based staff are EU nationals, while another 45 per cent are UK nationals.

Speaking after the company’s annual general meeting in Dublin on Tuesday, Mr Coveney said he did not expect the UK to close its borders after Brexit, but the company would nonetheless seek to increase the percentage of UK staff in its workforce.

“You’ll begin to see us gradually increase the percentage of our workforce that are UK nationals as our workforce evolves, but I don’t think it’s a near-term risk you’re going to have,” he said.

“Britain is and has been for a couple of hundred years a multicultural country. That hasn’t changed just because of the Brexit vote, and we’ll just have to see.

“Our best judgment is that the political imperative around migration is to be seen to have control of it rather than necessarily a desire or any overt plan to close the borders to people coming in.

“It’s rather an ability to control it, and, if you listen to [UK home secretary] Priti Patel and others, that’s where I think it’s going.”

Mr Coveney said the company has also been working to “de-risk” its UK supply chain in terms of the ingredients it uses. Currently, 80 per cent of the ingredients for its UK products are sourced locally.

“Our dependency is less, but the fact of life is that there are certain products you can’t source in the UK,” he said. “We have certainly accelerated the de-risking process since the referendum in 2016.”

Earlier, a third of shareholders voted against the company’s remuneration plan, which includes pension contributions of 35 per cent and 25 per cent of salary for Mr Coveney and chief financial officer Eoin Tonge respectively.

In Mr Coveney’s case, he stands to receive €315,000, which is payable in cash. Advisory firm Institutional Shareholder Services (ISS) earlier urged investors to reject the plan. The broader workforce enjoys pension contributions of 8 per cent of their salaries.

‘Mood music’

Speaking to reporters after the vote, Mr Coveney said: “We noted the policy was approved but there are clearly issues for us to reflect on.” Mr Kennedy agreed there was “definitely a message there” and suggested the company may re-evaluate the scheme.

“We engaged very proactively with our shareholders. We contacted about 70 per cent of them and we had dialogue with about 50 per cent so it is good to see that the policy was actually approved, but there is very definitely a message there,” he said.

“The direction of travel that is there in terms of the market and in terms of corporate governance arrangements, we will sit back and consider that over the next probably three to four months. We’ll take a decision on what needs to happen.”

Asked whether he anticipated changes, Mr Kennedy said: “I think any time you get less than 80 per cent of the vote you’ve got to sort of listen to the mood music and we’ve an obligation anyway to report on what we are going to do once it is less than 80 per cent.”

Mr Coveney’s total remuneration for the year to September was €2.35 million, which included a bonus of €442,000 split equally between cash and shares, while Mr Tonge’s package, denominated in sterling, equated to €1.21 million.

In a trading statement ahead of the company’s agm, Greencore said revenue rose by 1.8 per cent to £367.8 million (€436 million) in the first quarter of its financial year, which covers the 13 weeks to December 27th.