Fonterra's CEO pay freeze is nothing to crow about

OPINION: For all of Fonterra's many communication calamities, just this once the co-operative should have stayed quiet.
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On Thursday it emerged that Fonterra boss Theo Spierings had requested that his base salary be frozen.
The gesture was apparently made internally a week ago, on the day Fonterra announced hundreds more job losses, but it would seem no more generous then than it does today.
 
Spierings saw his pay increase last year by $770,000, to a little under $5 million.
With inflation running at close to 1 per cent, farmers must be wondering how he will ever cope.
Although that increase related to a year in which Fonterra’s farmer suppliers reaped record payments, the timing (on the same day as the job losses) was abysmal. His offer to not take a further salary increase this year adds insult to injury.
Exactly what this freeze relates to is not even clear, as Fonterra does not reveal how much of Spierings’ pay is base salary and how much is performance-related bonus.
It should do so, and it should also lay out the terms.
For all of the bright hopes that Fonterra would have the scale to add value to the industry, recent experience shows this is primarily still a commodities company. When the global price of milk powder goes up, so do payments to farmers. When the price plunges, farmers are forced to tighten their belts or go out of business.
Neither the world’s greatest chief executive or the worst could stop that.
How much of Spierings’ annual remuneration relates more or less directly to the relationship between New Zealand weather and Chinese demand – things he does not control – would make interesting reading.
Did he take a hit as a result of the botulism debacle? Or DCD poison? The response to crises like those are things chief executives can influence, unlike El Nino or the urbanisation of China.
It is not as if Fonterra is usually forthcoming with information.
In the case of the Botulism scare especially, drawing information from its communications department often felt like trying to draw blood from a stone.
But now, as farmers up and down the country struggle to make ends meet, we learn Spierings will not get an increase on his presumably multi-million dollar base salary.
For once, Fonterra should have done what it has done so well for so long: say nothing.

 

Source: Stuff
 

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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