Fonterra's annual meeting will be held in Masterton next month. Photo / File
Fonterra's annual meeting will be held in Masterton next month. Photo / File
Fonterra's incoming chairman Peter McBride won't be getting paid any more this year than the man he is succeeding - but he still could be the highest-paid chair in New Zealand.
Fonterra's notice of annual meeting for November 5 in Masterton says due to Covid-19-created uncertainty, no change is recommendedfor the chairman's annual remuneration of $430,000.
McBride, a large-scale dairy farmer and former chairman of kiwifruit exporter Zespri, will succeed John Monaghan at the head of New Zealand's biggest company.
The Institute of Directors said its fee survey aggregates data from 1830 directors across 674 members and gives a listed median of $162,000.
Fonterra directors, on $175,000, also won't get a pay rise.
While the hold on fees is attributed to Covid-19 uncertainty, Fonterra is also in recovery mode from disastrous financial results in 2018 and 2019.
However at the discretion of the board, the chair of each permanent board committee may be paid an additional $35,000, unless they are chairman of the board or already getting a committee allowance. This fee has not changed from last year. Up to $75,000 in aggregate has been provided for fees for directors who take on additional duties and responsibilities.
Peter McBride becomes Fonterra chairman next month. Photo / Supplied
There will be no pay increases for Fonterra Shareholders' Council members either.
Chairman James Barron will stay on $100,000 while councillors will get the same as last year, $35,000 each.
Up to $100,000 in aggregate is provided for additional honoraria of project leaders and council subcommittee chairs, but this is the same as last year.
Fonterra's 10,000 farmer-owners have a few resolutions to chew over if they choose to vote by November 3.
Aside from being asked to ratify the appointment of independent, non-farmer directors Holly Kramer and Bruce Hassall, shareholders will be asked to approve amendments to the constitution reflecting the legislative removal recently from the Dairy Restructuring Act 2001 (Dira) of Fonterra's obligation to accept all applications to become shareholding milk suppliers, effective from 2023.
They'll also be asked to support by 50 per cent each of three resolutions from South Island shareholders proposing a shakeup in the role of the controversial shareholders' farmer council, including a reduction of $1m in its annual shareholder-funded budget and a change of funding model to more strongly differentiate the council from the company.
The council does not support these resolutions.
The board of directors however is abstaining from making a recommendation on these proposals by shareholders Tony Paterson and John Titter. The board says the proposals "raise matters which are best considered by shareholders".
This is in sharp contrast to the board's attitude to a proposal from Paterson at last year's annual meeting. It did not support Paterson's bid to put the performance of the $3m-a-year council under professional, independent scrutiny.
Despite the council and board opposition, Paterson's resolution got close to 45 per cent shareholder support. It required 50 per cent to pass.
The result was an undertaking by the council to hold a self-review with an independent, outside leader. This review will make its final report to shareholders in time for the annual meeting - but too late to formalise any resolutions arising from it.
The council will ask next month's meeting approve a 2021 budget of $3.1m.
The notice of meeting shows the review will cost shareholders $129,000.
