Fonterra’s annual meeting could be lively as shareholders ask for more info on consumer business sale

Fonterra is New Zealand's biggest business. Photo / Michael Craig

Some big money will be up for voting support and some big questions set to be asked at Thursday’s annual meeting of shareholders of dairy multi-national Fonterra.

Although Fonterra’s decision to press on with exploring a sale process for its $3.4 billion global consumer products business isn’t on the formal agenda, the co-operative’s farmer-owners – the only members who can hold shares – are expected to pepper the top table with questions during general business discussion in New Plymouth tomorrow.

Shareholders will be asked to support a $14,000 or 2.89% pay increase for Fonterra chair Peter McBride, which would take his annual remuneration to $498,000. McBride, a former chair of global kiwifruit marketer Zespri, was re-elected to the board this week, along with incumbent John Nicholls.

A $5500 or 2.8% increase is also on the cards for farmer-elected directors. If supported, this will take their annual pay to $202,000.

Fonterra is New Zealand’s biggest business and the world’s sixth-largest dairy company by revenue at $22.8b.

The chair of farmer-elected watchdog, the Fonterra Co-operative Council, is in line for a $4000 or 3.23% pay increase, taking the annual pay for this job to $128,000.

Shareholders will also be asked to support a $1250 or 3.14% increase for farmer councillors, which would take their pay to $41,000.

The guardian council, which monitors Fonterra’s performance on behalf of its 8000-or-so farmer-shareholders and runs Fonterra elections and programmes for members, will be seeking to increase its budget for FY25 to $3.37 million. Its FY24 budget was $3.29m and its actual spend was $2.92m.

The cost of running the council, which has operated since Fonterra’s creation in 2001, is met by shareholders.

Chairman John Stevenson said the increased budget made provision for independent professional analysis of Fonterra’s consumer business divestment. Costs for the council’s small executive staff were also budgeted to increase, he said.

Total councillor honoraria, council staff pay and associated costs in FY25 were budgeted to be $2.04m, compared to $1.97m in FY24.

Shareholders will be asked to ratify the appointment of independent director Alistair Field to the board.

Field was appointed by the board, effective from November 1.

Based in Australia, he has 30 years’ experience in the mining, metals, manufacturing and logistics sectors, Fonterra said.

Field replaces appointed director Scott St John, who retired from the board in March.

After Thursday’s annual meeting, Fonterra will have a board of nine directors, instead of 11.

The reduction was supported by 88.4% of voting farmers last year.

The new board will comprise six farmer-elected directors and three appointed independent directors.

As a result of the reduction, shareholders were recently asked to elect two farmer-directors.

Sitting directors Leonie Guiney, John Nicholls and Peter McBride retired by rotation.

Guiney, who had served as a farmer director for the maximum nine-year term, did not seek re-election.

Long-serving appointed independent director Clinton Dines, who had also completed nine years’ service, retired.

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.