Company pays staff $94m in bonuses
Mainfreight staff have been paid a windfall $94.2 million in bonuses after the company’s profit boomed during the pandemic as freight that would have arrived by air shifted to the sea.
The sum is more than double the amount paid out in discretionary bonuses the year before.
Mainfreight also published the names of every one of its 10,393 employees in its annual report, taking up 15 pages.
Emeritus professor of economics at the University of Auckland Tim Hazledine says the move is a smart one, particularly at a time when talent is in short supply.
‘‘There’s a term that economists use called efficiency wages, which is sort of a win-win thing. You pay more, you get better work and more loyalty, and more people will be applying for jobs. It might even pay for itself. The key element is giving everyone a bonus, so you’re not just picking people.’’
Hazeldine described Mainfreight as one of the country’s leading corporates, and other businesses should take note.
The NZX-listed company reported revenue was up 47% to $5.2 billion, and profit after tax was 89% up, sitting at $355m.
Hazledine said shareholders might think the spending was better off in their pockets than staff’s, but with the share price up 3% over the last five days to hit $70.52, there did not appear to be any backlash.
‘‘They think, I’m sure, their shareholders will benefit in the long run.’’ Responding to the point, Mainfreight managing director Don Braid said in this past year the company had paid $143m to shareholders, $134m to Inland Revenue and $94m to staff, who had earned the profit.
The annual report notes the bonus calculation is applied across all business units that meet the criteria, but only to those who have completed 12 months’ continuous fulltime service for the company.
Chairperson Bruce Plested did not accept the $240,000 annual governance fee he was entitled to, a stance he has taken since 2014.
Braid received $3.37m in remuneration during the 2022 financial year, up from $2.59m. That included a $806,080 bonus. He also took a 50% pay cut for six months during the pandemic.
Braid did not expect recent profit improvements to continue in the short term, instead saying he anticipated they would revert to normal levels.
Mainfreight received $10.6m in Covid wage subsidy, but paid it back a month after receiving it, as post-lockdown trade improved.
‘‘You pay more, you get better work and more loyalty.’’
Tim Hazledine
Economics professor