Monsanto will pay an $80 million penalty and several executives will pay smaller amounts to settle federal allegations that the agribusiness giant misstated its earnings by not properly disclosing the costs of a rebate program for its Roundup weed-killer.
The Securities and Exchange Commission says Monsanto didn't properly account for millions of dollars paid to distributors as rebates, which had the effect of distorting the company's earnings reports for 2009, 2010 and 2011.
Monsanto Co., based in St. Louis, agreed to the penalty without admitting wrongdoing. It also agreed to hire a consultant to review the company's financial reporting procedures for rebates.
In addition, the SEC said Tuesday that three of Monsanto's accounting and sales executives will pay individual penalties ranging from $30,000 to $55,000.
CEO Hugh Grant also paid back $3,165,852 in bonuses tied to the company's financial performance, while former Chief Financial Officer Carl Casale repaid $728,843 in bonuses. Regulators said they found no personal misconduct by Grant or Casale, but the company said securities rules required the repayment.
The improper accounting occurred at a time when Monsanto was losing market share to competitors who sold generic herbicides for prices lower than Monsanto sold Roundup, according to an SEC statement. Regulators described a process in which Monsanto recorded sales in each of two years but didn't account for rebates until the following year.
Monsanto said it won't be required to change its financial statements because the company has already revised its reports for the period, after completing an internal investigation in 2011.
"The company is pleased to put this matter behind it," Monsanto said in a statement Tuesday. "Monsanto is committed to operating its business with the utmost integrity and transparency."