Source: http://www.twincities.com/mld/twincities/15167313.htm

Troubled food distributor Nash Finch showed three more executives the door Monday, but it was a golden door. All three had been granted lucrative "executive retention" packages last fall, just before serious financial troubles were disclosed, the stock price cratered and an insider-trading probe began.

Those retention packages now will cost the Edina-based company $4 million — a sum very nearly equal to the company's second-quarter profit of $4.13 million.

The golden packages were granted in September after then-CEO Ron Marshall announced his resignation. Fearing "the departure or distraction" of other brass, the board promised 12 executives a full year's salary and benefits should they be replaced by the incoming CEO. Four top officers were promised packages equal to two years' salary.

"It just shocked a lot of people, that so many executives would be offered these (retention packages)," said David Livingston, a supermarket industry analyst with DJL Research in Milwaukee. "It was like everybody knew they had to get their thumb in the pie and get whatever they can."

One month later, Nash Finch suddenly slashed its earnings outlook, disclosed it was having serious problems with an earlier major acquisition and saw its stock plunge 29 percent in a single day. When it later was revealed Marshall and other Nash Finch officials had been selling large amounts of company stock just prior to the earnings warning, the U.S. Securities and Exchange Commission began an insider-trading probe, and the company's stock dropped further.

On Monday, the company announced the departure of LeAnne Stewart, its senior vice president, chief financial officer and treasurer; Bruce Cross, its executive vice president for merchandizing; and Joe Eulberg, senior vice president of human resources. For departing, Cross and Eulberg will collect 24 months of their peak monthly salary; Stewart will collect $1.1 million.

"They're leaving with their shirts on — more than their shirts," said Alfred Marcus, a professor of strategic management at the University of Minnesota. "There is some element of cronyism at play, where people on whose watch this occurred are able to walk away without enormous consequences to themselves."

Nash Finch officials declined to answer questions about the departures on Monday, but outside analysts believe new Chief Executive Alec Covington is following the time-honored practice of installing his own management team. But last fall's golden deals are making that a costly proposition. The grocery wholesale business operates on very thin margins.

"Sounds like this new CEO is trying to get down to business and get some new blood in there," said Livingston, who has heard praise for the new leadership. "If there's a problem, instead of hiding it and putting it under the rug, he's dealing with it. It's not about getting the stock to $40 (a share) anymore; it's about staying alive and trying to get the company turned around."

The new Nash Finch executive team, announced Monday, includes Jeffrey Poore as executive vice president of supply-chain management; Calvin Sihilling as executive vice president and chief information officer; Edward Brunot, senior vice president, military; and Kathleen Mahoney, senior vice president, secretary and general counsel. Poore and Mahoney are Nash Finch veterans, while Sihilling and Brunot just arrived from AmeriCold Logistics, where Covington was CEO from 2001 to 2004.

Nash Finch shares rose 52 cents Monday to close at $22.37. That price was down 47 percent from a year ago, when shares closed at $42.32.

Tom Webb can be reached at twebb@pioneerpress.com or 651-228-5428.