Richard H. Lenny, the chairman, president and CEO of Hershey Foods Corp. stood firm at yesterday’s [Tuesday’s] annual general meeting despite challenges from striking confectionery workers.
Shareholders and management had expected some barracking from disgruntled staff, 2,800 of whom are striking over contract terms. The dispute focuses largely on worker health insurance contributions, which the company says must be increased from the current 6% to 10%, then 12% in the fourth year of the contract.
Asked why he didn’t consider using some of his own pay package, which comprises more than US$1.5m, to resolve the dispute, Lenny replied: “I’m here to do what the shareholders want me to do, which is to increase shareholder value.”
Lenny reiterated Hershey’s strategy, which is to grow profit margins by slashing costs by cutting the workforce and shedding non-core brands, as well as stepping up its efforts to sell top-line brands through convenience stores. Hershey’s gross profit margin increased by 1.1% in 2001, said Lenny.