Zespri says there are several reasons for it increasing its headcount in challenging times.
Zespri says there are several reasons for it increasing its headcount in challenging times.
Zespri says a $10 million increase in its payments to employees in a year when the kiwifruit marketer’s net profit fell by nearly 34 per cent is due to it keeping on top of its game.
The global exporter’s annual report for FY23 shows employee remuneration and benefits rose nearly7 per cent from $140.6m to $150.3m, while net profit after taxation fell to $238.7m from $361.5m in FY22.
Net profit before tax was $331.2m in FY23 compared to $505.1m the previous financial year.
A horror year for the kiwifruit sector of extreme weather events, fruit quality issues and associated costs and losses, higher orchard costs, labour shortages as well as challenges for Zespri’s overseas contracted growers, resulted in global net sales decreasing to $3.9 billion, down 2.8 per cent on the previous year. Zespri’s total fruit and other payments to New Zealand growers fell by 9 per cent to $2.24b.
Chief executive Dan Mathieson, a Kiwi based in Singapore, also appeared to get a pay rise. The FY23 report shows the top earner in the company had a total remuneration and benefits range of $1.990m-$1.999m compared to $1.880m-$1.889m in FY22.
In the 2022 financial year, which Zespri said was one of the industry’s strongest, with a record crop and the company’s second-best per hectare returns across all varieties, employee remuneration and benefits rose by 17.8 per cent from $119.3m (FY21) to $140.6m.
In FY23, 200 New Zealand-based employees were paid $100,000 and higher compared to 191 the previous year. For non-New Zealand-based employees, those on $100,000 and more totalled 265, compared to 212 in FY22.
Zespri is entitled by regulation to export all New Zealand kiwifruit, except to Australia.
Asked why total remuneration and benefits had increased in FY23 when financial performance weakened, Zespri noted in a statement that in FY22, it reported 776 fulltime equivalent (FTE) employees, including seasonal workers.
In the 2023 financial year, this increased to 837 FTE employees.
“The increase in our headcount reflects the growing crop volume over time, as well as the investment we’re making to keep demand ahead of supply, our increased focus on managing fruit quality and the investment made in people to deliver the Horizons programme, which is our systems transformation project,” chief people officer Edith Sykes said in a statement.
Given the lower crop volume this year, Zespri had a sinking lid policy, only replacing roles deemed critical when staff leave, she said.
“Resources are also being prioritised into core operational areas to ensure we can return more value to growers, including through efforts to address fruit quality.
“We expect our workforce size and employment costs will be directly linked to, and constrained by, our sales revenue growth. Part of the cost increases were also due to the competitive labour market and the need to respond to the increasing cost of living and to ensure we can retain our talent.”
The company said the same explanation applied to the reason behind the FY22 increase in employee remuneration.
On chief executive Mathieson’s FY23 pay rise, Sykes said “the change reflects several one-off factors”.
These included the impact of exchange rate conversions and offshore-based components of Mathieson’s package.
“It includes an at-risk performance incentive, which was reduced in the 2021-2022 reporting year in line with company performance, and which will also reflect the more challenging conditions that growers have experienced since.”
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.
