Fonterra saves on Spierings stand-in
Fonterra’s new interim chief executive, Miles Hurrell, will not initially earn the eye-watering salary of his predecessor, Theo Spierings.
Last year the Dutch boss was paid $8.3 million, made up of a $2.46m base salary, superannuation benefits of $170,036, and performance payments for 2016 and 2017 of $1.83m and $3.85m.
Chairman John Monaghan said that although the dairy giant had to remunerate commensurate with the market it was in, ‘‘It’s fair to say Miles’ starting salary is substantially less than where we’ve been.’’
Fonterra has announced that Hurrell will take over as interim chief executive with immediate effect – a move described by Federated Farmers vice-president Andrew Hoggard as ‘‘rather strange’’ timing.
Monaghan said it was ‘‘not best practice’’ to have the chairman and chief executive stand down at the same time, but events had overtaken that decision.
‘‘We have to deal with the balls as they are bowled, but I’m quite energised – we have an opportunity to breathe some fresh air into the organisation and do things slightly differently.’’
Monaghan said the global chief executive search would be stopped while Fonterra reviewed its portfolio and direction, and he would not put a time frame on when it would be restarted.
‘‘It’s important that we give ourselves the time to take stock of where we are as a co-operative, breathe some fresh air into the business, then determine any changes that are needed.
‘‘Appointing a new CEO is the most critical decision a board will make. We will take all the time we need to find the right person.’’
Hurrell, 44, is the chief operating officer of Farm Source, the Fonterra unit responsible for working directly with its farmer-owners.
He described his management style as inclusive.
‘‘I’m prepared to listen, take stock of situations and act accordingly. I should be judged on the performance over time. I’ve been 18 years in the business in some tough environments.’’
Monaghan said the board and Spierings had agreed it was the right time for him to step down.
Spierings would work alongside Hurrell to ensure a smooth transition of leadership through to September 1.
Hoggard said the announcement’s timing was ‘‘rather strange’’ because Fonterra must be close to choosing a permanent head. The search to replace Spierings started last November.
‘‘I’d need a far more in-depth understanding of his [Hurrell’s] skills,’’ Hoggard said.
‘‘All I know is he’s very approachable, [and] I’ve never heard him say anything stupid. He’s a safe pair of hands.
‘‘But I’ve not read any reason for why Theo is stepping down now. It’s just a week after a trading halt, not long after the chairman’s gone – it’s the sorts of things which make markets and investors jittery.’’
In June Hoggard said after 14 years of foreign-born CEOS a Kiwi candidate involved with Fonterra would be welcomed.
‘‘Hurrell would tick the box in terms of connecting with farmers, but I don’t know about his other abilities.’’
Fonterra Shareholders’ Council chairman Duncan Coull said it was pleasing to see the board was bringing stability to the cooperative from a leadership perspective.
‘‘It’s the right thing to do considering what’s happened in the last few weeks. I have full confidence in the interim Miles will do what’s required.’’
Hurrell first joined Fonterra in 2000. His 18 years’ experience in the dairy industry has spanned four continents, including roles in Europe, the United States, the Middle East, Africa and Russia.
Monaghan described him as a man of ‘‘great mana’’.
‘‘He has a deep understanding of our business and has demonstrated his ability to manage large, complex business units in most of our global markets.
‘‘Our CEO role requires intellect, energy and commitment. Miles brings that in spades.’’
Hurrell said he was excited by the challenge.
‘‘I’ve been part of the cooperative for 18 years and understand that its true potential really comes down to its people.’’
He admitted Fonterra had not always got everything right.
In his most recent role, Hurrell has been responsible for Fonterra’s global co-operative farming strategy, which includes farmer services and engagement, milk sourcing and the chain of 70 Farm Source rural retail stores throughout New Zealand.