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Benefits August 19, 2002
Hershey Severance Pay Could be Kiss(es) of Death
August 19, 2002 (PLANSPONSOR.com) - Rich severance
packages could give potential Hershey Foods suitors
indigestion, according to published reports.
Reported by Fred Schneyer
Quoting a weekend report in the Times of London ) , Reuters said that severance benefits due 14,000 workers could add $400 million to the deal’s price tag. That would represent up to three times the workers’ base salary and last for 24 months after a purchase deal goes through.
For a buyer intending to cut employees to cut costs, the extra severance payments burden could be a deal breaker, the report added.
Hershey, the maker of Hershey’s chocolate bars and other well-known brands, was put up for sale by the Milton Hershey School Trust, a charitable organization that controls 77% of Hershey’s voting power.
Analysts speculated that Hershey’s could fetch $12 billion or more, with Nestle and Kraft Foods seen as likely bidders.