Fonterra's Spierings asks for pay freeze

Fonterra CEO Theo Spierings. Photo / Jason Oxenham

Fonterra chief executive Theo Spierings asked for his salary to be frozen three days before the co-operative released its annual result, a spokesman for the company said.

He said Spierings' request was not in response to the unfavourable publicity that has arisen since the company revealed that he received a pay increase of up to 18 per cent in the 2014/15 year.

Fonterra last week disclosed that Spierings earned between $4.93 million and $4.94 million in the year to July 31, up from $4.17 million to $4.18 million in the previous year.

The company does not disclose Spierings' base salary, but it is understood to be close to $4 million.

"He requested to the committee that decides these things that he freeze his salary for the (current) year. That was on September 21 and the result came out on the 23rd," the spokesman said.

Spierings pay included all his incentive payments for the year. Because Fonterra is a co-op, Spierings is not entitled to any shares.

The spokesman said the chief executive's salary, like all senior executive salaries, is based on independent, international benchmarking.

"It's important to note that the figure listed in the annual report is the value of the total remuneration package. It includes performance incentive payments from 2014 when Fonterra delivered farmers a record $8.50 kg pay-out," he said.

"Fonterra's CEO salary is in the top band of New Zealand CEO salaries, which is to be expected when you consider Fonterra is New Zealand's largest and only truly global company with a $18.8 billion turnover in that reporting year," the spokesman said.