Former Fonterra CEO Andrew Ferrier received an $8.2million payout when he left the dairy cooperative last year – a figure the co-op's chairman describes as 'a lot of money”.
Sir Henry van der Hayden says the amount was made up of long term and short term incentives due when Andrew left the company in 2011 after eight years with Fonterra.
Former CEO Andrew Ferrier has been paid $8.2million when he left Fonterra.
'Fonterra is a global business and top management positions are based on performance. This is a lot of money. No one would say it is not a lot of money and I'm sure we will get questions from farmer shareholders about it.”
At the time of Andrew's departure in September last year the co-op posted nearly $20billion revenue and $771million after tax profit.
The dairy giant also announced a record pay out for the 2010-11 season of $8.25/kg milk solids before retentions following a 13 per cent lift in its annual after tax profit.
Sir Henry says the payment to Andrew will no doubt be among the questions raised at a series of farmer meetings around the country next week, but it was part of the package associated with his position as chief executive.
It is believed Andrew was paid between $4.9million and $5million in the year ended July 31, 2011.
The current chief executive Theo Spierings marked exactly 12 months in his new role today on a day when the company announced a 19 per cent drop in shareholder payments for the 2012 year and a farm gate milk price of $6.08.
It was also a season which produced record milk flows, up 11 per cent to 1,493m kgMS in the current season but one also impacted by market volatility and the strength of the New Zealand dollar.
Theo says the company posted a strong operating performance, with normalised earnings of NZ$1.03 billion for the 2012 year, up 2 per cent on the prior year.
Profit before tax was up 9 per cent on the prior year and net profit after tax was $624 million, down 19 per cent, largely due to tax credits of $202 million in the prior year not repeated in the current year. Excluding those credits, Fonterra's net profit after tax improved by 10 per cent.
10 comments
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Posted on 26-09-2012 15:14 | By maggie571
Thats why my milk costs me so much
disgusting
Posted on 26-09-2012 15:20 | By dumbkof1
once again its the fat cats that get the cream while the workers get buggar all. no one is worth that amount of money
POOR AND HARD DONE BY ....
Posted on 26-09-2012 16:45 | By PLONKER
Like that really does add new meaning to "milking the cow" now doesn't it!
Don't ever want to hear farmers moaning again
Posted on 27-09-2012 08:41 | By Phailed
The farmers own this business and they're must be doing ok to pay out this sort of money. No excuse to moan about hard times again.
Obscene salary
Posted on 27-09-2012 10:18 | By SpeakUp
8.2 million on top of 5 million p.a. salary?!?!? Yes, NO ONE is worth that amount of money, no one. But as always, the boys from executive boards help each other generously (aided by the major shareholding entities) while the peasants have no say.
Cheese
Posted on 27-09-2012 13:15 | By sojourner
And we haven't been able to afford cheese or butter for those years while my children were growing and needed the protein. How does this even make sense?
NO SAY BY FARMERS PHAILED
Posted on 27-09-2012 13:32 | By PLONKER
They just read about it ... and weep like the rest of us all. How can this be so.
@dumkopf1
Posted on 27-09-2012 13:53 | By PeteDashwood
I beg to differ. There are people who ARE worth that amount of money in a commercial sense. It is all relative. If a man manages a company to nearly 800 million profit (on a turnover of BILLIONS) then it seems perfectly reasonable to me that he should get something for doing that. 10% is pretty reasonable when you look at the "entrepreneurs" who raise money for "charity" and take 60%... Having said that, it seems to follow that if profits fall, the man at the helm takes a pay cut just like everybody else. Regarding your "fat cat" comment, if it is true, then which would you rather be? A "fat cat" or a worker? I learned long ago not be jealous of people doing better than me; just do what they're doing if it bugs you... (Workers AND fat cats are necessary for industry and they both get the rewards they negotiate, and what the industry can afford (if they have negotiated effectively))
Milking it?
Posted on 27-09-2012 14:13 | By PeteDashwood
I sympathise with the general outrage refelected here and, like most people, I object to paying the price we do for milk. But I don't honestly think for one minute that the shelf price of our milk was affected by this man's salary or incentives. It's fairly easy to say that the Farming community (as a Co-operative) are responsible, but if they DIDN'T pay a market rate for their management, they wouldn't get the international class of administrator that an industry of that size requires. It is BILLIONS of dollars and it is a major contributor to the GNP which affects all of us. Would you rather see a shonky out-of-work con-man at the helm? Can't happen? Look at Enron... Look at GM...Severe pain for everybody in repairing the damage done by incompetent management. The reason this rankles everybody is because most of us know we are unlikely to ever achieve that level of remuneration ourselves. That is not the fault of Fonterra, their management, or their farmers. We all made choices in our lives many years ago. If it turns out some other people made better ones, what're you gonna do? Get over it...:-) Focus on the performance of the company and not the amount of swill in the trough. If they are posting a loss and the snouts are still swilling, then give me the banner and I'll march with everybody else...
@sojourner
Posted on 28-09-2012 14:14 | By PeteDashwood
So, did you have no beer, never buy a Lotto ticket, and never place a bet while your children were deprived of cheese and milk? Actually, I really sympathize because you have hit a sore point. I happen to like cheese (especially blue vein) and I'm finding it just too expensive at the moment. Even the old faithful cheddar block is like buying gold dust. It all comes down to priorities. I'd rather have a beer occasionally or a glass of wine AND my cheese, but I can't really afford to do both. (I could once but I've gotten used to changed circumstances). I think, if kids are involved, it has the effect of sharpening the focus, though. Most parents would put their kids first.
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