Menhaden Muddle #32
Throughout the campaign to obtain improved management of menhaden, Omega has been characterized as a principal cause of the decline in menhaden stocks. Actually they are not the culprits. The primary cause for the current problem has been the failure of the ASMFC Management Board to utilize precautionary methodology. Hopefully this is now a matter of history. Nevertheless much can be learned by observing Omega’s actions over the past 5 years. Omega has consistently defended its position by asserting that there are plenty of menhaden in the water to satisfy all needs. Their actions, however, suggest otherwise
First, let it be said that Omega has plenty of smarts and they use them effectively. Going back a few years, the company’s advertising painted the organization as a big, if not the biggest, fishing company. Slowly, over time, that pitch has changed, and they are now describing themselves as a nutrition company and downplaying the big fishing theme. Look at their website, particularly that portion devoted to investors, and it becomes clear that there has been substantial change.
What really bring this out with a bang are the changes in personnel at the executive level effective in 2012. As of January 1, Joseph von Rosenberg becomes Chairman of the Board and Brett Scholtes moves up to CEO and president, a position previously held by von Rosenberg. Similarly, Andrew Johannesen moves up from Treasurer to CFO. New names are Joseph Kadi, who becomes Senior VP-Operations, and Gregory Toups becomes VP, Controller and Chief Accounting Officer. John Held remains as Executive VP ,General Counsel and Secretary. In 2011 cash bonuses and stock grants totaling about$3,000,00o were awarded to this group. No comment on how this may have impacted the reported bottom line.
Also in recent history was the acquisition of a nutrition company as well as diversifying the product line to include sources other than menhaden. This transformation, while a work in process, appears to have been well planned and executed. However one has to wonder what caused this to take place. If there is one thing the VIMS study of the economics of reduction fishing on the Chesapeake Bay region taught us, is that in recent history the company has enjoyed superior margins. When one is doing so well, why change? There could be a number of reasons.
This writer speculates that the move results from knowledge that things could change rapidly,radically, and not favorably. Science notwithstanding, the best source of knowledge of what is happening to menhaden stocks resides with the people whose livelihood is dependent on them. There is no argument that the stock is at a historically low level .It is also not arguable that recruitment is dismal. Logic says that if one continues to take out more than is replaced, at some point the stock will collapse. Nobody knows the time line better than Omega. Could it be, then, that they see the hand writing on the wall and have a program to restructure while it is possible to do so. After all, Omega’s responsibility is to its stockholders, not the public and not to the preservation of the fishery. This is especially true of a company that does not pay dividends and have stated they have no intention to do so.
The best way to judge what is at stake is to follow what a company does, not what it says. While much of Omega’s rhetoric has been focused on the potential loss of jobs, these actions suggest that the employees are not their priority. The survival of the organization is.
Charlie Hutchinson is with the Maryland Saltwater Sportsman’s Foundation (MSSA). The views here are his own and do not necessarily express those of the entire Menhaden Coalition.