Hard yards ahead for Fonterra boss
Fonterra has appointed Miles Hurrell as its permanent chief executive with immediate effect.
His base salary will be
$1.95 million, with additional short and long-term incentive payments based on achieving targets agreed with the dairy cooperative’s board.
Last August he was appointed an interim head, following the resignation of Theo Spierings.
While Hurrell’s base salary places him near the head of the pack of New Zealand chief executives, he is not in quite the same league as Spierings, who ended his seven-year stint at the top with a base salary of $2.46m.
But the base salary tells only part of the story. Hurrell stands to gain a lot more if he manages to reach the targets set for him by the Fonterra board.
For example, in 2017 Spierings controversially pulled in more than $8m in salary, a 57 per cent jump from the previous year, 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.
Similarly, Hurrell could receive generous performance payments if he achieves goals such as reducing the dairy giant’s debt by $800m this financial year.
Chairman John Monaghan said yesterday the board had been impressed by Hurrell’s leadership and commercial skills.
‘‘Miles has been performing well under difficult circumstances,’’ Monaghan said in a statement.
‘‘Our performance is not something that will be fixed overnight. It will require the courage to make difficult decisions, be upfront with farmer-owners, unitholders and other stakeholders, and instil a culture of accountability and performance right across the organisation.
‘‘Miles has demonstrated the wisdom, skills, experience and frankly, the backbone needed to lead. His permanent appointment will bring much-needed stability to the co-op and our people during a critical period of change.’’
Federated Farmers dairy chairman Chris Lewis said the appointment was expected.
‘‘He’s been accessible, done the hard yards working his way up. He’ll be a popular choice but now he needs to deliver the goods.’’
TDB Advisory director Phil Barry said Hurrell had a big job ahead of him.
‘‘He will focus on Fonterra’s core business and reducing debt.’’
TDB Advisory believed Fonterra’s goal to reduce debt by
$800m this financial year was a feasible target.
Hurrell joined Fonterra in
2000. He has had roles in Europe, the United States, the Middle East, Africa and Russia.
Before taking up the role of interim head, Hurrell was chief operating officer of Farm Source – the Fonterra unit responsible for working directly with farmerowners.
‘‘He’ll be a popular choice but now he needs to deliver the goods.’’ Chris Lewis, Federated Farmers