Marley coffee hires new CEO at salary six times revenue

Steven Jackson, Business Reporter

Rohan Marley's Jammin Java Corp plans to spend close to US$200,000 annually to employ a new chief executive officer, the company said in a market filing to shareholders this month.

The CEO's salary will cost more than six times the revenue reported by Jammin Java since inception through to its first quarter ending April 30.

It's part of a series of salary adjustments that would see the young listed US company pay out about US$500,000 in executive salaries a year, including US$196,000 (J$16.8 million) inclusive of benefits to Brent Toevs, who was hired as chief executive in August.

The compensation packages are significant for a company which only recently started booking revenues and recorded a net loss of US$181,000 (J$15.5 million) for its April quarter, or seven times worse than year-earlier levels.

The company, formerly known as Marley Coffee, has recorded turnover of US$28,992 since inception to April 2011.

Last year - its financial year closed January 31, 2011 - it reported revenue of US$1,037.

Jammin Java, however, recently secured working capital financing of up to US$2.5 million (J$215m) from an investor, Straight Path, in exchange for six million shares. And the company in its first-quarter report said it "generated sales of approximately US$42,000" up to the date of filing in May 2011.

Toevs is a coffee veteran with over 25 years of executive management experience.

"I am extremely excited to be joining Rohan, his iconic family and, most importantly, his team to share in their philosophy of ethical and sustainable coffee distribution," he said in a release.

"I've been following this company for the past year and these guys have been the talk of the coffee industry, ever since they had their first booth at Expo West in 2010. I've never seen so much excitement and passion for a brand new company before in my life."

He added: "This company has financing, it has a great backbone and it is poised to significantly scale its business operations and bring its unique brand of sustainable coffee to the broader commercial market in retail, hospitality, big box and office coffee service."

Ahn Tran, Jammin Java's former CEO, will transition into a new role as president and COO. At the same time, the company concretised Tran's base salary at US$120,000, while employing consultant Shane Whittle, formerly an officer at the company, for US$10,000 a month.

Toevs compensation is structured as salary at US$155,000, up to US$10,000 per year as a contribution for his individual retirement account, home office benefits - equipment, supplies, telecommunication costs - of US$3,600, tax preparation and personal financial planning/ investment advice in the amount of US$1,000; annual mobile phone and plan expenses in the amount of US$2,400; and vehicle expenses - combined lease expense, gas and maintenance - in the annual amount of US$24,000.

Toevs has served in executive positions throughout his career at some of the industry's top coffee companies, according to a Jammin Java filing.

Prior to founding National Coffee Services & Vending, Toevs was the vice-president of sales for US Fresh Coffee and Vending and was responsible for developing their office coffee service business, which, ultimately, generated revenues of approximately US$50 million a year, it added.

Toevs also served as president of Take A Break/Arbuckle Coffee Company, where he started as a sales associate. At Take A Break, Toevs helped the company sign on as one of the original Keurig authorised distributors, and rolled out the Keurig single-serve system at US Refresh. His focus on single-serve formats continued at NCS&V, signing a deal to bring Timothy's KCups to the United States market, said the release. NCS&V has also been a pioneer of single-serve pods and equipment, which is a fast-growing segment in the coffee industry.

He enters Jammin Java as the company prepares to launch an ambitious marketing and distribution campaign costing nearly US$600,000 (J$51 million) over the next 12 months. Jammin Java, a US-based company, provides roasted coffee to retail and hotel chains.