Number of Fonterra staff on $100,000-plus swells in tough economic year

Fonterra is New Zealand's biggest business. Photo / Supplied

In a tough year for the economy and on-farm, the number of Fonterra staff on $100,000 and over increased by more than 1000 in FY24, most of them based in regional New Zealand.

The dairy co-operative’s 2024 annual report shows 11,381 staff were paid $100,000 and over, 1025 more than in the previous financial year.

The number of regional staff on $100,000 and over increased by 930 to 7912. There were 26 more staff based at Fonterra’s Auckland head office in this pay range than in FY23 (909) and 16 more based overseas (2050).

Of the total 11,381 staff paid $100,000 and above, most – 9092 staff – were paid between $100,000 and $170,000.

The FY24 remuneration report shows 106 staff were paid between $400,000 and $500,000.

The multinational employs 20,000 staff in New Zealand and around the world, according to its website.

Chief executive Miles Hurrell got a pay rise of $1.3 million to a range of $5,920,000 to $5,930,000 the report indicates. More detail inside the annual report shows he received total remuneration of $5,924,782. This comprised a base salary of $2,459,310, pay for performance of $3,292,906 and benefits of $172,566.

Fonterra chief executive Miles Hurrell received remuneration of $5.9 million in FY24.

Fonterra’s profit after tax from continuing operations was $1.168 billion, down on $1.241b in FY23.

Profit before tax from continuing operations was $1.4b, against $1.54b the previous financial year. Revenue at $22.8b was down on the previous year’s $24.5b.

Farmer-owned Fonterra will pay a total dividend of 55c per share for FY24, comprising a 15c interim dividend and 25c final dividend and a 15c special dividend. Last year’s full-year dividend was 50c per share.

Asked to comment on the rise in staff on $100,000 and more, and on Hurrell’s pay rise, Fonterra in a written response said: “Fonterra’s remuneration packages are benchmarked against comparable companies in relevant markets, using information obtained from independent remuneration consultants.

“The number of employees who received remuneration, incentives and other benefits exceeding $100,000 varies from year to year.

“This number is impacted by a variety of factors including incentive payments, overtime paid, termination entitlements and remuneration increases provided in each respective year.

“Exchange rates for those employees paid in currencies other than the New Zealand dollar can also impact employees either meeting or missing the threshold of $100,000.”

Farmer-owner watchdog the Fonterra Co-operative Council said its focus was on the company’s efficiency because that flowed into the milk price farmers are paid as well as Fonterra’s earnings.

Chairman John Stevenson said it was difficult to comment on the increase in those earning $100,000 and more without knowing details, and farmer-shareholders would have varying views, but generally, they would support good remuneration and reward for good performance.

“I think farmers are okay with that.

“Efficiency is the one we should really look at closely. And we haven’t seen significant shifts in the right direction around that. We’ll continue to watch that closely.”

Fonterra last year announced new efficiency measures and the council was monitoring the performance of those, Stevenson said.

“Alongside that, in our own businesses, we have seen significant inflation... and our own ability to attract and retain staff has been competitive over the last couple of years. We have certainly seen costs go up and $100,000 today is not what $100,000 was 10 years ago, that’s for sure.”

Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the $26 billion dairy industry, agribusiness, exporting and the logistics sector and supply chains.