New Zealand's highest-paid chief executive's 12-week pay cut will rise from 15 to 30 per cent following feedback the company sought, reducing an annual $5.3 million by about $140,000.
Ross Taylor, Fletcher Building chief executive, has just said directors and executives will take the 30 per cent cut, after the company last week announced cuts of 15 per cent for top brass but up to 70 per cent for staff - a move which drew union fury.
Taylor said around 15 people would now get the more substantial 12-week cut and calculated his drop as being $140,000 from his $2m annual base pay "and there will be no bonuses this year". But he refused to say what the income loss would mean for him personally.
The Herald pay survey, out on February 3, reported how Taylor was the country's highest-paid boss of an NZX listed business.
He got $5.3m for the June 30, 2019, financial year: more than $2m base salary, a long-term incentive of about $2m, a short-term incentive of just under $1.1m, other benefits of $106,500, and $1m shares which recognised company transition and the key role the CEO played in that.
Today's further pay cut announcement follows Fletcher last week announcing sliding pay cuts of up to 70 per cent for many of the approximately 10,000 people it employs in New Zealand.
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"We were asked to reconsider the pay cut for our most senior leaders, which includes myself, 11 other senior managers and our directors, as they thought we could have gone further than the 15 per cent proposed," Taylor said of feedback on last week's proposal.
"We have listened to our people and we will be extending that to 30 per cent through this 12-week period. Our executive team continues to work throughout the lockdown, to ensure we are best placed for when the restrictions are lifted," he said.
Last Thursday, Fletcher said executives would get the 15 per cent cut but some staff 70 per cent. A union decried that, saying top executives would earn "megabucks".
Joe Gallagher, E tū negotiation specialist, said the unfairness was "incredible. It's frankly unbelievable that they want workers to take such a gigantic pay cut while the higher-ups, who earn up to half a million dollars a year, will take just a 15 per cent cut in their pay. It shows a lack of respect for the workforce that keeps their company moving. It shows that they don't seem to care about families getting through the crisis," Gallagher said on Thursday.
Taylor also said today that the Fletcher Employee Welfare Fund would be used for additional support for those in need. Details will be released in the coming days.
More than 8600 Fletcher employees signed up for the bridging pay programme, designed to support them while they are unable to work due to the Covid-19 restrictions, Taylor said.
Almost all of its New Zealand operations were shut down and more than 90 per cent of staff can't work.
"Last week, we undertook 48 hours of consultation with our people and outlined a package that provided them certainty for the coming 12 weeks, and allowed them the opportunity to plan ahead," Taylor said today.
"We have received a lot of great feedback, and an overwhelming response, with 93 per cent of our people, who can't work, agreeing to the bridging pay programme. Over the weekend, we have further considered their feedback, which was genuine and included a lot of heartfelt support for each other," he said.
Taylor referred to "the difficult situation the company is in" but said attempts were being made to try to support staff.
"While we cannot keep our people who are not working on full pay at this time, our bridging programme means they remain a part of Fletcher Building," he said.
He also indicated the consultation programme over pay resulted in strong feedback.
"Our people asked that we watch out for those who might find themselves facing genuine hardship through the lockdown and eventual ramp-up of our businesses. To assist with this, Fletcher Building will be providing additional funding for the Fletcher employee welfare fund. This will allow additional support to be provided to those of our people who need it," Taylor said.
On the pay survey, technically speaking, ex-Fonterra CEO Theo Spierings got the second-highest pay last year but that was not a full year's salary earned in the 2019 financial year. He got $4.67m.