Fonterra CEO Theo Spierings is head of an organisation that
has 26 executives earning more than $1 million a year.
Photo /Chris Gorman
The number of employees earning pay packets worth more
than $1 million has more than tripled at three of New Zealand's
largest companies over the past 10 years.
Fonterra, Telecom and Fletcher Building's annual reports show
those firms had 41 employees earning seven-figure salaries in
the last financial year.
Twenty-six Fonterra staff, 13 of whom were based overseas,
were paid more than $1 million in the year to June, up from
nine in 2002, according to the dairy co-op's annual report.
Telecom had 10 employees earning more than $1 million in its
last financial year (two were overseas-based), compared with
just four 10 years earlier.
Fletcher was not paying any of its staff a seven-figure pay
packet in 2002 but by the 2012 financial year the
construction and building materials company had five staff
earning more than $1 million salary packages, four of whom
were involved in "international business activities".
Other than chief executives, staff earning more than $1
million are not named.
Federated Farmers president Bruce Wills said many farmers
would probably "roll their eyes" at the number of Fonterra
staff earning more than $1 million.
But the co-op was an international organisation and needed to
secure the very best talent around the globe to ensure its
success, he said.
Fonterra's managing director for people, culture and
services, Chris Caldwell, said the dairy co-op was a much
bigger company than it was 10 years ago and it had to attract
and retain the top talent from a "global pool".
It employed 17,300 people, which put the 26 staff earning
more than $1 million into context, said Caldwell.
Shareholders Association corporate liaison Des Hunt said
remuneration consultants were partly responsible for the
growth in top-level salaries that had taken place over the
past 10 years.
Inflation has averaged around 2.7 per cent over that period.
Telecom has gone from paying its former chief executive
Theresa Gattung $1.8 million in cash and shares in 2002 to
the more than $12 million her successor, Paul Reynolds,
received during his final year with the company, which
included a $3 million short-term incentive payment earned in
the previous financial year and $1.75 million termination
New Telecom chief executive Simon Moutter will receive a
maximum pay of $3.7 million in his first year, with an
additional $750,000 in share rights subject to shareholder
Telecom's annual report also reveals the company paid 2870 of
its staff $100,000 or more in the year to June, while 49
employees earned between $400,000 and $970,000.
"Our salary structures have been benchmarked to attract and
retain the best talent and our remuneration approach is
continually undergoing review to reflect market conditions,"
a Telecom spokeswoman said.
When the Business Herald conducted its first executive pay
survey, which looks at chief executive salaries at New
Zealand's largest listed firms, state-owned companies and
Fonterra, in 2005 only six chief executives were earning more
than $1 million.
In this year's survey, 26 were.