Creaming it: Spierings paid $43m by Fonterra

Theo Spierings was Fonterra chief executive for seven years. Photo: ODT files
Theo Spierings was Fonterra chief executive for seven years. Photo: ODT files
Fonterra's former chief executive Theo Spierings pocketed $43 million in his time in the job, based on a new payment disclosure from the embattled dairy company after NZ Herald inquiries.

The company has disclosed the Dutchman received an incentive payment of $4.6 million when he left the job in August last year, despite Fonterra's huge financial losses.

This takes his total pay during seven years as chief executive to $43 million.

Fonterra has revealed the final payment ahead of its scheduled disclosure in the upcoming 2019 annual report under pressure for more information, triggered by a New Zealand Herald report that Spierings was in line for another payout under a historic incentive scheme.

The company said it had made more detail available to its farmer-shareholders and was now extending that to the public.

Fonterra this week announced an expected loss of $590-$675 million this year and asset writedowns of about $820-$860 million. It will not pay a dividend.

In a statement, Fonterra said the final payment to Spierings was made under the Velocity Leadership Incentive, a long-term incentive plan in place in the 2016 and 2017 financial years.

The plan had been discontinued.

Employees who led significant work streams in support of the Velocity project were eligible to participate in the incentive plan.

The payment schedule was for a 50% payment at the end of FY17 with the remaining 50% deferred over two years in two payments of 25% - one in FY18 and the other in FY19.

"This final 25 percent payment due to Theo Spierings was included in his final remuneration for FY19, which also included his base salary, superannuation contributions, holiday pay entitlement and short-term incentive payments," the company said.

The total payment Spierings received in FY19 was $4,673,359.

Fonterra's new long-term incentive plans were now primarily based on return on capital and earnings per share metrics, the company said.

The board retained overall discretion on all aspects of the incentive plans.

Fonterra's latest loss forecast follows a historic first annual loss last year of $196m on a 25% decline in operating earnings and a $433 million loss on its investment in Chinese company Beingmate.

Spierings collected $8 million in 2018, adding to the $8.3 million he received in 2017.


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