Smithfield?s Executives Earn Top Dollar at the Expense of Its Workers and the Environment

August 3, 2005

The recent announcement that Smithfield Foods chairman and chief executive officer Joseph W. Luter III got a $9.86 million bonus demonstrates how the company’s business model benefits the few at the top, at the expense of the many who work for the world’s largest pork producer, said Public Citizen today.Smithfield Foods, which owns Animex and Morliny in Poland, had a record-breaking year.  The company is a major supplier of pork and processed meats to the food service, retail and international markets.  The company earned a record income of $296.6 billion and record sales of $11.4 billion in fiscal year 2005. Comparatively, last year Luter received a bonus of $6.6 million to top his $850,000 salary. Also winning large bonuses were chief operating Officer C. Larry Pope with a bonus of $ 4.9 million and Joseph W. Luther IV, the president of Smithfield Packing Co., received a bonus of $2.5 million.  Bonuses for Jerry H. Godwin and Joseph B. Sebring, presidents of Murphy-Brown and John Morrell & Co., which are owned by Smithfield,respectively were $1.4 and $1.5 million.  

“These bonuses are outrageous. Smithfield can afford them because it underpays its employees, pollutes the environment and keeps low sanitary standards,” said Anna Witowska, who represents the U.S.-based public interest group Public Citizen in Poland. At the end of the day, it is the public that pays for this insane amount of money in their polluted water and soil and in the low-quality foods they put in their bodies.”

Smithfield’s financial success does not translate to better environmental standards or better wages for its production line employees. Smithfield is known for notorious violations of environmental laws, and in Poland, for violations of construction laws, as well. Smithfield’s workers are underpaid, as the company takes advantage of Poland’s huge unemployment rate of 18.3%. To quote Smithfield’s COO Larry Pope“Polish workers earn $2.50 an hour for the same work the company would pay more than $20 an hour for in other parts of Europe”.Pope does not mention that many of Smithfield’s workers are not allowed to work full time. Quite large numbers of them do not receive any benefits, and any attempts to unionize are suppressed by this corporation.

Smithfield started doing business in Poland in 1999 when it bought its ownership stake in Animex, a leading meat production and processing company in Poland.   Two years later, two businessmen from Poland, representing a company called Prima Foods, started buying hog farms in northwestern Poland and signing deals with small-scale farmers. Soon, Polish authorities learned that Smithfield was using Prima as a front company, providing the funds for buying the farms. This permitted Prima to grab the land without violating a Polish law that restricted foreign companies from buying more farmland.

Public Citizen released a corporate profile of Smithfield Foods in 2004. To read the Polish translation, click here.