Fonterra’s 2015 financial report shows the top earner, chief executive Theo Spierings, had a salary band within $4.9 million. This represented a $770,000 increase on his 2014 remuneration package.
But in September last year, on the same day Fonterra announced 230 jobs were being cut, Spierings told staff he would not take the increase.
The freeze would apply only to his base salary and he would still be eligible for short and long-term «incentive» payments.
The financial statements also show the number of Fonterra employees who were paid a salary of more than $1m in the year to July 31 rose to 22 from 17 in the previous year.
Labour Primary Industries spokesman Damien O’Connor said it was up to the Fonterra board to make the decision about salaries.
«But the way chief executives handle industry realities is the measure of their performance.
«The board should make the call and they should consider multiple factors including shareholders returns, suppliers’ welfare plus the fact Fonterra is a co-operative.
«Being part of a co-op means there should be a sense of collective responsibility.
«If the CEO is not in tune with the objectives of the co-op and how it operates, then they will be reluctant to take a pay cut when everyone else is taking a hit,» O»Connor said.
It was naive to think that by paying a lot you necessarily got the best people.
«We’ve seen how in the United States and other places paying huge salaries has resulted in huge disasters. Teachers are paid relatively poorly and yet perform amazing tasks to inspire some of the greatest people we have,» O’Connor said.
Fonterra suppliers are upset that they have to wait up to three months to be paid by the dairy giant.
National MP Chester Borrows agreed with O’Connor.
«Farmers and those with farming-related businesses take a dim view of increased salaries borne out of the same sector that’s paying lower and lower returns.»
He did not accept the view that people had to be paid high salaries for good results.
«The ‘paying peanuts and you just get monkeys’ argument is just a justification for paying more,» Borrows said.
Federated Farmers president William Rolleston said he was not prepared to comment.
Source: Stuff
