Connolly tells ConAgra employees to brace for change

by Keith Nunes
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Big changes - including a possible headquarters relocation - may be underway for ConAgra Foods.

OMAHA — Sean Connolly, chief executive officer of ConAgra Foods, told employees and investors that change is coming and that not all of the changes will be pleasant. Mr. Connolly spoke Sept. 25 during the company’s annual shareholders meeting.

“When I joined ConAgra, I pledged to be as transparent as possible on what lies ahead, and I meant it,” Mr. Connolly said. “I also told our employees that when final decisions are made, we would communicate those details to them first. And I fully intend to honor that commitment (and) therefore I’m limited in what I could share with you here today. But I will share this. We are going to rebuild this company into a winner, and yes, that will require some meaningful change.

“Simply put, our industry dynamics have changed. And to stay competitive, our strategies must change, too. When a company strategy changes, the design of that organization usually changes with it and we wouldn't be immune from that.”

Change already announced by the company include the planned divestiture of its private label business unit, the acquisition of Blake’s All Natural Foods and “major” renovations to such brands as Banquet and Healthy Choice.

Sean Connolly, c.e.o. of ConAgra Foods

“And while nothing has been finalized, it likely will be soon,” Mr. Connolly said. “In fact, if all goes as I anticipate, we intend to share more details with our employees by the end of next week. Where we are headed directionally is consistent with what we have alluded to before.”

Mr. Connolly went on to say that with the coming changes job reductions are likely as well as “geographic reshuffling.”

“Will Illinois have an important role in our future?” he said. “Likely, yes.”

The reference to Illinois by Mr. Connolly has prompted speculation ConAgra Foods is planning to move its headquarters out of Omaha and to Chicago. But Mr. Connolly noted during his presentation that ConAgra Foods will have a major presence in Omaha going forward.

“If all of this plays out as I suspect, it will be a mix of hard news, relief and excitement of our future,” Mr. Connolly said. “And clearly, if people are impacted, ConAgra will do the right thing. In the end, if we address our challenges and build a winner, our employees and our communities will prosper. That's about as much detail as I can get into at this point.”

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READER COMMENTS (2)

By joe blow 9/29/2015 3:24:48 PM
» CEO Connolly received a total of $6.6 million in compensation during his first, partial fiscal year with the company. Connolly started with the Omaha-based food manufacturer on March 3; the company’s fiscal year ended May 31. His compensation included $250,000 in salary, $6.2 million in stock and option awards, and $172,000 in other compensation, including aircraft use, relocation expenses and company contribution to retirement plans. » Former Chief Executive Gary Rodkin, who retired from ConAgra on May 31, received $8.5 million in fiscal 2015, down from $9.1 million the year before, as the company posted an annual loss amid its private-label struggles. » Paul Maass, former president of ConAgra’s private brands unit, received $2.1 million in 2015, down from $2.3 million. Maass left ConAgra this spring and will be paid $1.4 million under a separation agreement, if he abides by confidentiality and noncompete restrictions.

By Larry McManis 9/29/2015 8:26:17 AM
"When a company strategy changes, the design of that organization usually changes with it"... good statement. Usually, companies change strategies (and often people) without enough energy expended to change the fundamental design of the business. Four challenges (structure, metrics, process, and cross-functional collaboration) will hit him between the eyes. Hopefully the CAG CEO will recognize the enormity of the task he's embarking on and step up to the challenge.