Pennsylvania attorney general announces Hershey trust reform deal
HARRISBURG, Penn. - The Pennsylvania Attorney General's office on Friday unveiled the terms of a reform agreement with the charitable trust that controls Hershey Co <HSY.N> that includes a 10-year term limit for trustees and limits on their...
HARRISBURG, Penn. - The Pennsylvania Attorney General's office on Friday unveiled the terms of a reform agreement with the charitable trust that controls Hershey Co <HSY.N> that includes a 10-year term limit for trustees and limits on their compensation to $110,000.
The trust has been in the spotlight since it rejected a $23 billion cash-and-stock offer for Hershey by Mondelez International Inc <MDLZ.O>, the maker of Oreo cookies and Cadburychocolate, last month.
The agreement, which comes after an investigation of several months by the Attorney General's office, could offer the clarity needed for Mondelez to make a new bid to acquire Hershey.
The Attorney General's office had accused the trust of breaking the terms of a 2013 reform agreement with the trust, particularly with regards to spending, expenses, salary and tenure. The trust, created by Hershey Co founder Milton Hershey and his wife Catherine over a century ago, runs a school for underprivileged children in Hershey, Pennsylvania.
"All the efforts that led to this agreement were made to ensure that the vision of Milton and Catherine Hershey remains intact," Attorney General Kathleen Kane said in a statement.
The new deal with the Attorney General's office, as first reported by Reuters last week, requires three trustees, Joseph Senser, Robert Cavanaugh and James Nevels, to step down by the end of the year.
Senser and Cavanaugh have been trustees since 2001, while Nevels has been a trustee since 2007.
Hershey Trust Chairwoman Velma Redmond, who joined the trust in 2003, will step down by the end of 2017, along with James Mead, a trustee since 2007.
Term limits for trustees will be limited to 10 years, while their compensation from the trust will now be capped at $110,000.
The Pennsylvania Attorney General's office will also be given a 30-day window to object to new trustees.
The new deal with the Attorney General's office follows a period internal dissent and turmoil at the trust. Trustee Joan Steel resigned earlier this month, following the departures of Richard Zilmer, John Fry and Stephanie Bell-Rose over the past year.
The Attorney General's office, the trust's sole overseer, had threatened legal action to remove trustees unless a settlement over its governance was reached by the end of July.