A $10,000 increase is sought for each of Fonterra's other 10 directors, which would take their annual fee to $185,000. Chairs of Fonterra board committees may be paid an additional $35,000 - McBride excepted - but there's no proposal to increase that fee.
A boost of $75,000 is proposed for a remuneration fund for directors taking on additional workloads and responsibilities. If the increase is approved, this fund would total up to $150,000 a year in aggregate.
The annual meeting agenda says "the need to attract and retain high quality governors and the substantial director workload" makes the "larger one-off adjustment" appropriate.
Fonterra, the world's sixth biggest dairy company by revenue, has seven farmer-shareholder directors and four independent appointees. The cooperative's board is proposing a major capital restructure, the work for which has been underway for at least two years. Fonterra's 10,000 farmer-shareholders will be called on to vote 75 per cent in support of the re-jig next month.
With Fonterra farmers enjoying buoyant farmgate milk payments due to global dairy market demand, and the company's reset business strategy under new senior management and a largely new board producing a recovery in the balance sheet, the pay rises should be a shoo-in.
Also recommeded for a pay rise and a lift in its annual farmer-funded budget to $3.2m is the Fonterra Cooperative Council.
The job of this organisation of 25 farmer-elected farmers is to represent farmer-shareholder interests. Until last year when grumpy shareholders forced a review of its costly reason-for-being, which led to some reform, it was known as the Fonterra Shareholders' Council.
The review followed Fonterra's net losses of $196m in 2018 and $605m in 2019. Critics estimated farmers had paid around $50m to the council since Fonterra was created in 2001. Its annual budget had rarely dipped below $3m. The FY22 budget request is for $3.2m.
The annual meeting papers ask for a $10,000 increase to $110,000 a year for the council chair, and a rise of $2500 to $37,500 for councillors.
Their last increase was also in 2017.
Approval is also requested for up to $100,000 a year extra in aggregate to be provided for honoraria of councillors for extra responsibilities. The council chair isn't entitled to such an extra payment, which is limited to $17,500 more per person per year.
The $3.2m requested for FY22 is made up of an operating budget of $2.4m plus $792,000 for other costs.
The council's actual budget for FY21 was $2.9m. It had budgeted for $3.1m.
