What happened
As of mid-afternoon trading on Wednesday, Scotts Miracle-Gro (SMG 1.64%) stock was doing the opposite of growing. On news of a payout for one of the agricultural and cannabis cultivation retailer's departed executives, investors were trading the shares down by over 4%.
So what
After market hours Tuesday, Scotts Miracle-Gro detailed in a regulatory filing the pay package it's doling out to former CFO Cory Miller. On Sept. 1, the company announced that Miller had exited the company, effective the previous Monday, Aug. 29.
Scotts Miracle-Gro and Miller subsequently signed a separation agreement under which the company will give him severance pay equal to two years' base salary, a $24,000 lump sum payout, a benefits offset payment, and in lieu of an annual bonus, a compensatory payment that will be dispensed in two installments. The company did not provide further details of the two latter disbursements.
Miller was replaced on an interim basis by David Evans, who is now serving his second term in the position. He had previously been Scotts Miracle-Gro CFO from 2006 to 2013 when he departed to join the Battelle Memorial Institute. Evans is also a member of the company's board of directors.
At the time, Scotts Miracle-Gro said it was retaining an executive search firm that it did not name to assist it in the search for a permanent CFO. Presumably, this effort is ongoing.
Now what
Pay packages are nothing unusual for outgoing executives at big companies, so this one isn't necessarily cause for concern. But investors tend to find C-suite turnovers concerning, as they can result in some uncertainty regarding future corporate strategy.
In the case of Scotts Miracle-Gro, I don't think this worry is justifiable; it's a veteran company on the scene that has done well of late supplying to marijuana cultivators. An executive's departure (and related compensation) is really just another day at the office.
