Fonterra CEO pay remains a mystery
Fonterra’s new chief executive Miles Hurrell is earning ‘‘substantially less’’ than his predecessor Theo Spierings.
At Fonterra’s annual meeting in Putaruru yesterday, shareholders, frustrated with the cooperative’s recent underperformance, quickly focused their questions on remuneration.
Spierings, Fonterra’s former chief executive, left the company this year with a final year’s salary of $8.08 million – making him one of the country’s highest paid executives.
Shareholders asked what Hurrell was paid but the questions went unanswered, other than Fonterra chairman John Monaghan stating Hurrell’s remuneration was ‘‘substantially less’’.
Shareholders wanted to know what accountability Spierings faced for not delivering acceptable results but Monaghan failed to answer the question.
Publicly listed companies usually outline staff remuneration details in their annual financial results. That being the case, Hurrell’s pay packet will not be known until August next year.
Monaghan said ‘‘there are no sacred cows’’ when it comes to improving financial performance and Fonterra would need to divest assets to protect its balance sheet.
Addressing the meeting, Monaghan said Fonterra had made progress on a review it promised when it delivered its financial results in August.
For the first time the dairy giant made a loss, running up a $196m deficit for the year.
The co-op is reducing its debt levels by $800m to protect the balance sheet.
About 300 farmer-shareholders attended the meeting.
Monaghan said the farmgate milk price of $6.69 per kilogram of milksolids was the third highest in a decade, despite the loss.
He said the co-operative board had made progress with its review. The first stage was to identify assets that are no longer core to its strategy in terms of the type of product they make or the geography in which they operate.
The second part was a strategic review of its full portfolio, and the third and final stage of the review was to act on the wider plan but there would be no ‘‘fire sale’’ of assets, he said.
‘‘This may mean exiting certain investments that are no longer core to our strategy, reallocating capital to new or existing ventures, or simply reducing debt . . . We have some tough decisions to make.’’
Investment bank Goldman Sachs had been appointed to review options with its disastrous shareholding in Beingmate, the assembled farmers were told.
Hurrell painted a bleak picture of Fonterra’s China Farms operation. He said China Farms posted a loss of $9m for the year, while its ingredients business made a $30m loss from buying milk from the farms and production was down 12 per cent.
Fonterra remained committed to its ‘‘global milk pools’’ – a concept that had created confusion for farmer-shareholders, he said.
‘‘We have some tough decisions to make.’’ Chairman John Monaghan
Newly appointed Fonterra chief executive Miles Hurrell is paid ‘‘substantially less’’ than Theo Spierings’ $8 million – but the figure is secret.