Fonterra chief executive Theo Spierings. Photo / Jason Oxenham
Fonterra chief executive Theo Spierings. Photo / Jason Oxenham
COMMENT:
Theo Spierings doesn't deserve his $4.7 million bonus. But he's got it, so there's little that can be done.
However, no other Fonterra staffer, past or present, derserves a bonus either. Fonterra should cancel them all.
How can anyone deserve a bonus when Fonterra is a mess? It's bleedingvalue. This week, it wrote as much as $860m off the value of its assets. It's cancelled this year's dividend. It's already sold the crown jewel, Tip Top. And that's probably not the end of the pain.
Even if a staffer could argue that they've performed well in their role and their role has little to do with the situation this company finds itself in, any bonus would be a middle finger to dairy farmers. It would be saying pain is necessary, as long as staff at headquarters don't feel that pain.
That's the short-term medicine. Long term, Fonterra needs a massive ego check.
It is not OK to pay 24 staff - at last count - more than a million dollars. It's not OK to pay 6000 staff more than $100,000. It means more than one in every four staff members is on more than a hundred grand.
Even when the company was doing a lot better, those pay packets were taking the mickey. Now, it's beyond a joke.
This is a company that has form displaying mind-boggling levels of arrogance. And this week was no different.
Fonterra acts like it's above accountability. At the bad news press conference this week, it only allowed each journalist one question. It then chose a single media outlet - from what I can ascertain – for an extended interview outside of the press conference. Everyone else was declined. Email questions were answered with responses so unrelated to the questions that Fonterra may as well have typed out the word purple 100 times.
Fact is, Fonterra owes us all answers. There are dairy farmers waking up at the crack of dawn to pay million-dollar pay packets to city dwellers. There is an entire country whose economy can be dented should the biggest company take a bath.
Will Fonterra be forced to cut the milk pay-out to farmers? Photo / Duncan Brown
We deserve to know how they got this so badly wrong. Are we right to suspect there's more pain to come? Is this the end of the write offs? Will the Australia business be written down too? What about the business in Chile?
Will Fonterra be able to reduce debt by a full $800 million by the end of the financial year like it said it would? That deadline is only weeks away. It seems unlikely it can be met.
If it can't meet that deadline, will it be forced to cut the milk pay-out to farmers? If not right now, will it have to in the future?
If Fonterra is too arrogant to front up and answer questions, can it at least answer that last question. Will it be forced to cut the milk pay-out to farmers?
Farmers deserve to know. Because some of them will not make ends meet if that happens. And we have a possible recession around the corner. There could be farmers who face losing their land over Fonterra's actions from here on in.
There might be hope. There's a new guy in charge at Fonterra. And, who knows, Miles Hurrell might change the co-op's attitude. He's already started somewhat better than Spierings, having taken a decent pay cut from what the Dutchman was on.
We'll know the cut of his jib pretty soon when the annual results come out. That'll tell us if he's changing the culture at Fonterra. If he puts his foot down over bonuses and fronts up to answer questions, it'll be a good sign.
