Regional Economic Development Minister Shane Jones unleashed a barrage of attacks on Fonterra’s management after the dairy industry co-operative warned of heavy financial losses this year, but veteran journalist Barry Soper wrote that those comments – while harsh – seem justified.
“[Minister Jones] had another of his rants, saying dairy farmers are expected to transition from greenhouse gas emitters to climate changers without achieving business surpluses, let alone having enough to put bread on the table,” he wrote in his op-ed for the New Zealand Herald.
“Those working in [Fonterra’s] executive suites in Auckland at the conglomerate that represents you here and overseas haven't got a worry in the world. It seems performance isn't part of the vocabulary for the company executives though: 24 of them are paid more than a million dollars a year, base salary mind you, with the boss, Kiwi Miles Hurrell earning, along with two others, more than three million bucks a year.”
On Minister Jones’ comments that the Fonterra board “should not only be denying their former CEO Theo Spierings another cent, but that they should also be putting an immediate salary freeze on executive salaries”, the journalist said that “it’s hard to argue with that”.
“Dutchman Theo Spierings headed the company through the past seven years, leaving almost a year ago, earning $8m in the previous year and more than that the year before (even though that year Fonterra took its first big $200m bath). Added up over his time at the company he took home $38m”.
“Spierings' salary was backed up by what they call the "velocity leadership incentive payment schedule" which goes on in future years. So even though Spierings has left the company he's in line for another big payout next month,” says Mr. Soper.
“So Fonterra's a cash cow for the suits but little more than Mycoplasma bovis for the gumboots down on the farm,” Mr. Soper concluded.