“It makes sense to get a New Zealander and it makes sense to sort out where the board is going before appointing a permanent CEO,” said an analyst who declined to be named.
“The Kiwi aspect is helpful.”
Appointee Miles Hurrell is “a good bugger” who will be good at connecting with farmers, said Federated Farmers vice-president Andrew Hoggard, a Fonterra farmer shareholder.
Craigs Investment Partners head of private wealth research Mark Lister said Fonterra had a number of things to do to get the company on track but the appointment is “a step towards it ...so credit where credit is due”.
Christchurch born Hurrell has been with Fonterra 18 years and before his new appointment was chief operating officer Farm Source, the division responsible for working directly with Fonterra’s farmer shareholders.
The board will stop the global search for a chief executive while the portfolio and direction of New Zealand’s biggest company is reviewed, said new chairman John Monaghan.
Fonterra also has imminent director elections with three vacancies up for contest - two due to rotational retirements and one the result of former chairman John Wilson’s exit due to health reasons.
As if the twin exits of Wilson and chief executive Theo Spierings weren’t enough to create uncertainty and unease in the $19 billion revenue company, last week it announced a surprise claw-back of 5c/kg milksolids in its forecast milk price for the 2017-2018 season just ended and that there would be no further dividend than the 10c per share already paid out.
Fonterra’s share price sank to $4.80 after the announcement - a more than 20 per cent dip on the start of the year. The share price rose to $4.82 on news of Hurrell’s appointment.
“They need to get through these board elections and make sure they know where they’re going before making a permanent chief executive appointment,” said one analyst.
The dairy industry experience of Hurrell, 44, has spanned four continents, including jobs in Europe, the US, Middle East, Africa and Russia.
Hoggard said Fonterra was “a very confusing space right now”.
“A lot of questions are going to be asked at the director [election] meetings coming up when you look at all the things going on right now.”
He said he’d had many dealings with Hurrell and found him easy to connect with, compared to Spierings who was “quite aloof”.
Dutchman Spierings will leave the company on September 1.
The Fonterra Shareholders’ Council, which represents Fonterra’s 10,000-or so farmer-owners has been approached for comment.
