Fonterra freezes salaries for a quarter of its workforce

Wednesday 4th September 2019

Fonterra Dairy Cooperative has frozen salaries for about a quarter of its workforce earning more than $100,000 a year.

"Some tough calls are still needed to put us on the right path," chief executive Miles Hurrell said. A remuneration review will still occur for salaried employees earning under that level and there’s no impact on waged employees who are part of a collective agreement, he said.

Fonterra is currently undergoing a full strategic review after reporting its first loss last year. It has signalled it expects to report a full-year loss next week of $590-675 million after writing down assets in Brazil, China, New Zealand and Australia.

The dairy exporter's annual report shows it employed 22,558 people worldwide at the end of July 2018.

A total of 5,994 employees earned more than $100,000 at Fonterra in the 2018 year, including 230 who no longer work for the cooperative. Of the total, 14 - including former CEO Theo Spierings - earned more than $1 million in New Zealand and another nine did overseas. One person, who no longer works at Fonterra, also pulled in a million-dollar salary.

Spierings earned around $40 million in salary and bonuses during his seven years at the helm, which ended in July last year.

Fonterra also said it wouldn't be paying bonuses for the annual short-term incentive scheme or sales incentive plan for the 2019 year. In the 2018 financial year, about 6,000 employees were eligible for short-term incentives.

Fonterra said some business units, both in New Zealand and overseas, use sales incentive plans for market-facing sales and support teams.

Units in the Fonterra Shareholder Fund were recently down 1.2 percent at $3.26.

(BusinessDesk)

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