Diamond Foods Ex-CEO Officially Resigns 9 Months After Scandal

By RetailFOXBusiness

Diamond Foods (NASDAQ:DMND) said ex-CEO Michael Mendes formally resigned this week nine months after he was placed on administrative leave for an accounting scandal.

Diamond's former chief financial officer, Steve Neil, who was also put on leave earlier this year,also officially exited this week, the company said in a securities filing on Wednesday.

Continue Reading Below

Neither executive will be paid severance.

In a separate agreement, Mendes agreed to pay the company $2.74 million in cash, representing the total value of his 2010 and 2011 bonuses, and return 6,665 shares of Diamond stock awarded to him after fiscal 2010. The payment will be taken from the $5.4 million Diamond owes its ex-CEO through its retirement program.

Shares of Diamond, which makes Kettle chips and Pop Secret popcorn, slumped slightly Wednesday morning.

An internal investigation by a Diamond audit committee found in February that Diamond made two shady crop payments to walnut growers in August and September of 2010, valued at $80 million.

The board’s committee subsequently called for the restatement of financial statements for the fiscal years 2010 and 2011 and said it identified “material weaknesses” in the company’s internal control over financial reporting.

The scandal led to the ouster of Mendes and Neil and lost Diamond Foods its planned acquisition of Pringles.