UPDATE 2-ADM CEO pay dips in 2023 as government investigation hangs over company

(Adds background throughout story, finance professor's comments in paragraph 16)

By Karl Plume

April 10 (Reuters) - Archer-Daniels-Midland Co CEO Juan Luciano was paid $24.4 million in 2023, down 1% from the prior year, according to a securities filing on Wednesday that came after an internal investigation into its financial reports.

The Chicago-based grain trader is confronting past accounting issues that have triggered two government investigations and forced the company to revise six years of financial data.

ADM had delayed paying bonuses to some executives until it conducted an internal investigation and audited its financial statements, which were published on March 12.

Luciano's compensation included a slight increase in base salary to $1.483 million and company stock awards valued at $17.920 million, according to ADM's annual proxy statement filed with the U.S. Securities and Exchange Commission.

The company paid $32.9 million in long-term incentives to its top executives, which includes equity in the form of 60% performance share units (PSUs), it disclosed in a filing.

Reuters reported on March 21 that executives would receive millions of dollars in bonus compensation, but the detailed salary breakdowns were only made public on Wednesday.

ADM, a $31 billion company that also makes animal feed, sweeteners and other products, is trying to regain investor confidence while facing a criminal investigation by the Department of Justice. Government investigations are not evidence of wrongdoing and do not necessarily result in charges. ADM has said it is cooperating with authorities.

The company put its CFO Vikram Luthar on administrative leave in January while it launched an internal investigation focused on accounting practices in its Nutrition segment, the smallest of three business units at the 122-year-old company.

ADM last month confirmed that some sales between its business units were not accurately recorded and corrected certain segment-specific financial information going back to 2018.

The disclosure revealed that ADM had overstated the Nutrition segment's annual operating profit by as much as 9.2% in that time.

The accounting issues and revisions to financial statements have focused attention on how ADM rewards its top executives.

A change by the company's Compensation and Succession Committee in 2020 tied half of long-term executive compensation to average operating profit growth of the Nutrition segment over a three-year period, with the remainder tied mostly to return on invested capital.

ADM has since replaced the Nutrition-focused performance metric and instead tied half of long-term compensation to the company's adjusted earnings per share instead, proxy statements showed.

Still, in 2023 most senior executives received the long-term performance share units (PSUs) that they were awarded in 2021 at 100% of the targeted payout despite operating profit growth in Nutrition shrinking 8.5% from 2021 to 2023 as return on invested capital exceeded expectations, Wednesday's proxy statement showed.

The proxy statement also confirmed ADM's statement last month that the revised financial statements would not impact previous executive compensation payouts.

"This helps get to the bottom of how the segment reporting issues did not affect bonuses," said Kevin Murphy, a professor of finance at the University of Southern California, adding that "the revisions were not large enough to change the payouts."

The Board's Compensation Committee has not yet decided on PSU compensation for CFO Luthar as he is on administrative leave, according to the filing.

ADM's Board decided against doling out an additional boost to the long-term compensation based on favorable shareholder returns in 2023, as outlined in the plan, ADM said in the filing.

(Additional reporting by Arunima Kumar and Roshia Sabu in Bengaluru and Chris Prentice in New York; Editing by Krishna Chandra Eluri and Sonali Paul)