Otago Daily Times

No pay in­creases for Fon­terra of­fice­hold­ers

- AN­DREA FOX Business · New Zealand · Masterton · South Island · Greater Auckland

AUCK­LAND: Fon­terra’s in­com­ing chair­man, Peter McBride, will not be paid any more this year than the man he is suc­ceed­ing — but he still could be the high­est­paid chair­man in New Zealand.

Fon­terra’s no­tice of an­nual meet­ing for Novem­ber 5 in Master­ton says due to Covid­19­cre­ated un­cer­tainty, no change is rec­om­mended for the chair­man’s an­nual re­mu­ner­a­tion of $430,000.

Mr McBride, a large­scale dairy farmer and for­mer chair­man of ki­wifruit ex­porter Ze­spri, will suc­ceed John

Mon­aghan at the head of the com­pany.

The In­sti­tute of Di­rec­tors said its fee sur­vey ag­gre­gated data from 1830 di­rec­tors across 674 mem­bers and gave a listed me­dian of $162,000.

Fon­terra di­rec­tors, on $175,000, also will not get a pay rise.

While the hold on fees is at­trib­uted to Covid­19 un­cer­tainty, Fon­terra is also in re­cov­ery mode from dis­as­trous fi­nan­cial re­sults in 2018 and 2019.

How­ever, at the dis­cre­tion of the board, the chair­man of each per­ma­nent board com­mit­tee may be paid an ad­di­tional $35,000, un­less they are chair­man of the board or al­ready get­ting a com­mit­tee al­lowance. This fee has not changed from last year. Up to $75,000 in ag­gre­gate has been pro­vided for fees for di­rec­tors who take on ad­di­tional du­ties and re­spon­si­bil­i­ties.

Fon­terra Share­hold­ers’ Coun­cil mem­bers will not get a pay rise ei­ther.

Chair­man James Bar­ron will stay on $100,000 and coun­cil­lors will get the same as last year, $35,000 each.

Up to $100,000 in ag­gre­gate is pro­vided for ad­di­tional hon­o­raria of project lead­ers and coun­cil sub­com­mit­tee chair­men, the same as last year.

Fon­terra’s 10,000 farmer­own­ers have a few res­o­lu­tions to chew over if they choose to vote by Novem­ber 3.

Apart from be­ing asked to rat­ify the ap­point­ment of in­de­pen­dent, non­farmer di­rec­tors Holly Kramer and Bruce Has­sall, share­hold­ers will be asked to ap­prove amend­ments to the con­sti­tu­tion re­flect­ing the re­cent re­moval from the Dairy Re­struc­tur­ing Act 2001 of Fon­terra’s obli­ga­tion to ac­cept all ap­pli­ca­tions to be­come share­hold­ing milk sup­pli­ers, ef­fec­tive from 2023.

They will also be asked to sup­port by 50% each of three res­o­lu­tions from South Is­land share­hold­ers propos­ing a shakeup in the role of the con­tro­ver­sial share­hold­ers’ farmer coun­cil, in­clud­ing a re­duc­tion of $1 mil­lion in its an­nual share­holder­funded bud­get and a change of fund­ing model to more strongly dif­fer­en­ti­ate the coun­cil from the com­pany.

The coun­cil does not sup­port these res­o­lu­tions and the board of di­rec­tors is ab­stain­ing from mak­ing a rec­om­men­da­tion on these pro­pos­als by share­hold­ers Tony Pater­son and John Tit­ter, say­ing they ‘‘raise mat­ters which are best con­sid­ered by share­hold­ers’’.

This is in sharp con­trast to the board’s op­po­si­tion to a pro­posal from Mr Pater­son at last year’s an­nual meet­ing to put the per­for­mance of the $3 mil­lion­a­year coun­cil un­der pro­fes­sional, in­de­pen­dent scru­tiny.

De­spite the coun­cil and board op­po­si­tion, the res­o­lu­tion got close to 45% sup­port. It re­quired 50% to pass.

The re­sult was an un­der­tak­ing by the coun­cil to hold a self­re­view with an in­de­pen­dent leader. This re­view will make its fi­nal re­port to share­hold­ers in time for the an­nual meet­ing, but too late for any res­o­lu­tions aris­ing from it to be for­malised.

The coun­cil will ask next month’s meet­ing to ap­prove a 2021 bud­get of $3.1 mil­lion. — The New Zealand Her­ald

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