No pay increases for Fonterra officeholders

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