Kiwi execs spurn $5m Fonterra job
It’s the job worth $5 million a year that no-one wants.
Several top Kiwi chief executives have been approached for the top role at Fonterra, New Zealand’s largest company with a turnover of $19.2 billion.
It is understood one came close to inking the deal but at the last minute had misgivings and spurned the dairy giant’s advances.
Over the six years between 2011 and
2017, Dutchman Theo Spierings has been paid $29.27m but at this point his final year’s salary is unknown, as is the golden parachute awaiting him because it is likely to be paid out in the next financial year.
Fonterra cast a global net in its search for a chief executive to replace Spierings, who announced in May that he would step down.
However, in August it opted to appoint industry insider Miles Hurrell as an interim head and said the search had officially been called off.
‘‘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,’’ new chairman John Monaghan said.
Spierings was Fonterra’s third chief executive since it was created in 2001. In
2011 he succeeded Canadian Andrew Ferrier, who followed the first head Craig Norgate.
Some of the reluctance by other chief executives to take on the Fonterra role may be related to the complex beast that is the dairy co-op.
On one hand it has to satisfy its
10,500 farmer-shareholders with a high milk price, but on the other hand a high milk price squeezes margins for its added-value products.
Rabobank global strategist Mary Ledman pointed out in a recent analysis of the world’s 20 top dairy companies that in contrast to other food and agriculture sectors, dairy is still dominated by large farmer-owned co-operatives.
Co-operatives occupy the fourth through seventh positions of the top 20. Together, the four largest dairy co-ops accounted for nearly $82.6b in turnover in 2017, more than double the annual turnover of Nestle´ , which occupies the top position in the top 20.
Ledman wrote: ‘‘Dairy co-operatives operate in a challenging economic environment. Dairy farmers struggle with creating ‘farmholder’ versus ‘shareholder’ value . . . The expectations of many farmer co-operative members to receive the maximum milk price has left the co-operative with limited funds to support future growth.’’
By New Zealand standards Spierings’ salary was high, but Fonterra deserves credit for transparency. None of the other international co-ops are prepared to reveal what their chief executives earn.
Privately owned Nestle´, the world’s largest dairy company, paid its CEO, Mark Schneider, a base salary last year of $3.68m, but with bonuses and performance shares added it rose to $12m.
Spierings’ future role with Fonterra is uncertain. At the time of his resignation Wilson said he would continue to work in an advisory role after he stepped down.
One thing is for certain: He will not be fronting for the announcement of today’s expected profit fall.