Payouts for executives departing Germany's Hochtief A.G., after its 2011 acquisition by Spanish construction conglomerate ACS Group helped drive the German contracting giant into the red by about $210 million last year.
Hochtief executives who left the firm in the last quarter of 2011 cost the group about $46 million, according to a Jan. 30 company report. The exodus began early last year as Madrid-based ACS gradually built up its ownership stake to more than 50%.
New CEO Frank Stieler forecasts making a profit this year, but it will be less than in 2010 on sales of $26.6 billion.
Among the first to go was CEO Herbert Lütkestratkötter who left in May. Other top executives followed, including Chief Operating Officer Martin Rohr in December.
While the executive compensation ate into Hochtief’s profits last year, the bigger hit came from losses recorded by the company’s Australian subsidiary, Leighton Holdings Ltd., St Leonard’s, NSW. It reported on Jan. 16 writeoffs of $126 million on investments in Dubai and in an Australian toll road company.
Hochtief also owns U.S. contractors Turner Construction and Flatiron Construction.