Monsanto agreed to pay $80 million in order to settle alleged accounting violations, officials from the U.S. Securities and Exchange Commission announced on Tuesday.
The settlement stems from a corporate rebate program related to Roundup, Monsanto’s popular pesticide that uses the controversial chemical glyphosate. Generic competitors had started to undercut Monsanto’s prices in 2009, according to the SEC, so the seed company floated rebate incentives to retailers and distributors if they “maximized” Roundup purchases.
The rebate worked, but when Monsanto reported its profits to shareholders, it did not include costs associated with the promotion.
“This type of conduct, which fails to recognize expenses associated with rebates for flagship product in the period in which they occurred, is the latest page from a well-worn playbook of accounting misstatements,” said SEC Chair Mary Jo White in a statement.
Three accounting and sales executives also agreed to pay penalties to settle charges.
“The company is pleased to put this matter behind it and remains focused on building value for its shareowners, while continuing to provide innovative technologies and products for farmers to improve farm productivity and food quality,” Monsanto said in a statement.
While St. Louis-based Monsanto “neither admits nor denies” any wrongdoing, its current and former CEOs are voluntarily reimbursing the company nearly $4 million for cash bonuses and stock awards they received during the period of questionable accounting practices.
Monsanto CEO Hugh Grant will give back about $3.2 million, and former CFO Carl Casale will give back about $729,000.
The SEC did not accuse either official of any violations.
According to the St. Louis Business Journal, Grant received total compensation of $11.9 million for fiscal year 2015.
As part of the settlement, Monsanto also agreed to retain an independent compliance consultant.