Archer-Daniels-Midland (ADM) announced on Monday that Chief Financial Officer Vikram Luthar will step down from his position effective September 30. Luthar’s resignation comes in the wake of accounting issues within ADM’s Nutrition division, which subsequently led to two government investigations and necessitated the revision of six years’ worth of financial data.
Following the disclosure of accounting concerns, ADM placed Luthar on administrative leave in January as part of an internal investigation into accounting practices within its smallest business unit. Despite his impending departure, Luthar is set to receive a cash performance incentive award for 2023 amounting to $743,419, along with shares tied to company performance that were awarded in 2021. He will continue to serve in a nonexecutive capacity at ADM until his resignation date, offering transitional support as the company seeks a new CFO, as indicated in a filing with the U.S. Securities and Exchange Commission.
In an internal memo seen by Reuters, CEO Juan Luciano stated, “The decision to move forward in this direction was made after careful consideration of the future of our company and how to best position ADM for success.”
Luthar, who joined ADM from General Motors in 2004, ascended to the role of CFO for ADM’s Nutrition unit in 2020 before assuming the position of company CFO in 2022. His tenure coincided with a period of significant expansion for ADM as the long-standing grains merchant transformed into a diversified food ingredients and nutrition company, resulting in record-high earnings in 2022. However, the transition revealed some challenges within the new division, highlighted by the correction of six years of financial data in March, following an internal investigation that uncovered inaccuracies in recording sales between business units, leading to an overstatement of annual operating profit in the Nutrition segment by up to 9.2%.
ADM’s shares closed slightly lower on Monday and continue to trade around 8% below levels observed just prior to the revelation of the accounting issues in January. It’s important to note that government investigations are not indicative of wrongdoing and do not necessarily result in charges.