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July 25, 2016

Hershey Trust Board Reaches Pact With Pa. Regulators

The board of the Hershey Trust announced Friday that it has reached an unofficial agreement with the Pennsylvania attorney general's office that could head off a court battle over governance of the $12 billion charity that controls the namesake chocolate company, Reuters reports.

Trustees Joseph Senser, Robert Cavanaugh, and James Nevels will resign by the end of the year, according to Reuters, which cited unnamed sources familiar with the details of the settlement. Chairwoman Velma Redmond will step down before the end of 2017, along with trustee James Mead. The deal would also set a 10-year term limit for board members, give the attorney general 30 days to object to newly named trustees, and place restrictions on board pay.

The trust, established candy magnate Milton Hershey to operate a school for disadvantaged children, has voting control of Hershey Co. It has been a lightning rod for controversy in recent years, with state regulators investigating allegations of self-dealing and questionable financial moves and attempting to mandate changes in board membership and wages. In February, the attorney general's office sent trustees a letter threatening legal action if the organization did not agree to reforms on pay and if certain board members did not step down. 

Read a Chronicle opinion column on the Hershey Trust's governance issues.