Fonterra's Ferrier responds to pay petition

Fonterra's chief executive, Andrew Ferrier, has brushed off criticism of his apparent $300,000 pay rise last season, telling a Taranaki sharemilker: "I regret this is the way you view my remuneration."

While it did not name Ferrier, the co-op's latest annual report indicated his pay rose to about $2.9 million from just under $2.6 million the previous year.

That led Hawera's Grant Black to distribute a petition over the increase to neighbouring farmers. Of 50 responses, most were against the rise at a time when the dairy sector is facing a lower payout of $4.05/kg of milk solids.

Black wrote to Ferrier questioning the fairness of the matter given "the increase is seven years' my present net income on present payout".

Ferrier's written response, which did not explicitly acknowledge the increase, said his main aim at Fonterra was maximising returns for shareholders.

"The efforts of a diverse and world-class management team that I lead are totally focused on lifting Fonterra's returns to its farmers."

Ferrier defended the underlying performance of the business, saying that if Fonterra had the same exchange rate last year as in 2001-02, the payout would have been $6.15/kg instead of $4.10/kg. The annual report puts the payout in 2001-02 at $5.33/kg.

"Please rest assured that we and our management team will work tirelessly to improve returns to you," Ferrier wrote.

"Next time I am in Taranaki, I will make a point of catching up to discuss this further with you."

Black was disappointed at what he saw as Ferrier's defence of his rise.

"Our pay hasn't gone up, so what has he done to deserve a $300,000 salary increase?" He was also disappointed the Fonterra Shareholders Council had not agreed to his request to distribute the petition more widely.

A council letter said it had referred the petition to Fonterra's chairman.

Black now intends distributing the petition throughout Taranaki and will send the responses to Fonterra.