Monsanto to Pay $80 Million Civil Penalty
The NYTimes announced yesterday (Wed. 9, Feb.) that Monsanto Company had reached an agreement with the U.S. Securities and Exchange Commission to pay $80 million in penalties to settle claims that it, “misstated earnings after failing to properly account for the costs of a sales rebate program for its flagship herbicide product, Roundup.
From the NY Times:
“The S.E.C. said Monsanto, an agribusiness giant based in St. Louis, had insufficient internal controls to properly track millions of dollars in rebates it offered to Roundup retailers and distributors. The rebates were part of a promotion that Monsanto ran after sales of a generic version of the product undercut its business in 2009. Monsanto booked substantial revenue as a result of the sales promotion from 2009 through 2011, but it did not recognize related costs, which led it to misstate corporate profits over a three-year period. It is one of the largest accounting-related settlements by the S.E.C. since Mary Jo White took over as chairman of the agency in 2013 with a plan to refocus on corporate accounting abuses as investigations related to the financial crisis were ending.”
Of course, Monsanto doesn’t have to admit wrongdoing but they will pay. In reference to the settlement, they had this to say about themselves: “Monsanto is committed to operating its business with the utmost integrity and transparency and in compliance with all applicable laws and regulations. The company is pleased to put this matter behind it and remains focused on building value for its share owners, while continuing to provide innovative technologies and products for farmers to improve farm productivity and food quality.” (Ya right)
Monsanto’s Chairman and CEO, Hugh Grant, and its former Chief Financial Officer, Carl M. Casale, have both reimbursed the company for cash incentives and stock awards they received in the fiscal years of 2009 and 2010. The SEC did not allege that these executives engaged in misconduct (although we sure believe they have) but under Section 304 of the Sarbanes-Oxley Act, when a company restates its financial statements (as a result of misconduct) the CEO and CFO are required to reimburse the company for certain incentive compensation- even if they did not personally engage in that misconduct. So, even though they’ve had to admit no wrongdoing AND the big guys themselves aren’t technically in trouble, they are still paying. A lot.
We will take it. It’s not a dream come true but any amount of money they have to pay out and any attention we can bring to the evils of their product or their practices, helps.